Posted on 28 September 2023 in News > Corporate & M&A
On 23 September 2023, the law of 21 April 1928 on non-profit associations and foundations was repealed and replaced by the brand-new law of 7 August 2023.
1. Legal innovations
This new law notably includes certain changes for Luxembourg non-profit associations (ASBLs), the major ones being the following:
It is no longer necessary to annually file changes to the ASBL’s members list with the registry of the civil court. It suffices to keep this list up-to-date at the ASBL’s registered office.
Benefactors and honorary members have now a legal foundation with a new title of “membres adhérents”. Their rights and obligations are freely fixed by the articles.
Board meetings may be held by phone or video conference. In addition, the articles of association may authorise unanimous written resolutions taken by all the directors.
The articles of association may also authorise the attendance of general meetings by phone or video conference.
The threshold above which a donation to an ASBL requires administrative authorisation has been raised to EUR 30,000. If the donation is made inter vivos by means of a bank transfer from a credit institution authorised to operate in an EU or EEA country, then no authorisation is required, regardless of the amount.
Ownership of real estate not strictly necessary to achieve the ASBL’s purpose is now allowed.
There will be a classification of ASBLs into 3 categories in order to determine the accounting regime applicable to them:
Small ASBLs (less than 3 employees, max. EUR 50,000 annual revenue, max. EUR 100,000 in assets) can continue to prepare simplified accounts, showing all revenue and expenditure.
Medium-sized ASBLs (max. 15 employees, max. EUR 1,000,000 annual revenue, max. EUR 3,000,000 in assets) must keep double-entry accounts, just like most commercial companies.
Large ASBLs (more than 15 employees, more than EUR 1,000,000 annual revenue, more than EUR 3,000,000 in assets) and all ASBLs recognised as being of public interest must not only keep double-entry accounts, but they must also have their annual accounts audited by an independent auditor.
In order to establish in which category a given ASBL fits, it depends on whether, at the end of two consecutive financial years, it exceeds the numerical limits of at least two of the three criteria mentioned above (i.e. number of full-time employees, level of total annual revenue, and total assets at the end of the fiscal year).
2. Transition period
ASBLs formed before the new law came into force have until 23 September 2025 to adapt their articles of association to the new legal provisions. In the meantime, an ASBL which does not adapt its articles will until the said deadline continue to be governed by the former law of 21 April 1928, which means that the application of the new accounting rules may thus be postponed to the financial year 2026, but in such case the flexible meeting rules will also not apply before the deadline.
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