Corporate law

Published on Feb 9, 2024 by Fiduciaire LPG

Non-Profit Organization (ASBL) are required to keep accounts and draw up financial statements whose scope and structure are strictly defined by law, depending in particular on the size of the association (or of its special status).

Small associations

Small associations are those which do not exceed (for at least two successive years) at least two of the following three criteria:

  • Workforce : less than 3 people (full time);
  • Income: less than €50,000;
  • Assets: less than €100,000.

Example: an organization that owns the building which serves as its head office (estimated at €500,000), which employs 4 people part-time and which generates annual revenues of €40,000 belongs to the category of “small associations” because even if the asset criterion (€500,000) is exceeded, but both the criteria linked to the workforce (4 part-time people = 2 full-time people) and that linked to income (€40,000) are not.

Small associations must at least:

  • Establish a forecast budget for their expenses;
  • Keep “simplified” accounts detailing all of their revenues and expenses (it is of course possible to implement a complete double-entry accrual accounting system instead). However, it is not obligatory to use the Standardized Accounting Plan (PCN) and associations can use the accounting plan of their choice (subject, however, to sectoral specifications such as the “standardized accounting plan for the social sector”).
  • Establish a financial statement according to the “revenue-expense” principle supplemented by an annex which specifies the total cash and bank assets as well as the number of members and the percentage of fund transfers to the EU, the EEA and outside the EU.
  • File financial  “revenue-expense” financial statement and the annex to the Luxembourg Business Register (within 7 months of the end of the financial year).

Medium-sized associations

Medium-sized associations are the ones that exceed the size of a small association, but do not exceed (for at least two successive years) at least two of the following three criteria:

  • Workforce: less than 16 people (full time);
  • Income: less than €1,000,000;
  • Assets: less than €3,000,000.

Medium-sized associations must at least:

  • Establish a forecast budget for their expenses;
  • Keep their accounts according to the accrual accounting method without necessarily implementing the standardized accounting plan (PCN);
  • Establish a financial statement with a balance sheet and an income statement supplemented by an annex which specifies the number of members, the volume of financing from other entities, the percentage of activities in the EU, the EEA and outside the EU and the percentage transfers of funds to the EU, the EEA and outside the EU.
  • File the financial statement and the annex with the Luxembourg Business Register (within 7 months of the end of the financial year).

Large associations

Large associations are those which exceed (for at least two successive years) the criteria to be qualified as small or medium.

Large associations must at least:

  • Establish a forecast budget for their expenses;
  • Keep their accounts according to the accrual accounting method without necessarily implementing the standardized accounting plan (PCN);     
  • Establish a financial statement with a balance sheet and an income statement in accordance with the business model. These documents must be supplemented by an annex which specifies the number of members, the volume of financing from other entities, the percentage of activities in the EU, the EEA and one outside the EU and the percentage of remittances to the EU, EEA and outside the EU;
  • Appoint an auditor and submit the financial statement;
  • File the financial statement and the auditor's report with the Luxembourg Business Register (within 7 months of the end of the financial year).

Associations recognized as being of public utility

Whatever their size, associations recognized as being of public utility fall into the category of “large associations” and are subject to all of their obligations.

Associations recognized as being of public utility must also, in addition, send to the Minister of Justice all documents filed with Luxembourg Business Register.

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