Suspension and expulsion of an association member
With more than 140,000 associations registered with the Chamber of Commerce, the Netherlands is a country of partnerships. The sports association, the broadcasting association or the neighbourhood association are just a few examples of such partnerships. There are nationwide associations with a large number of paying members and broad objectives (e.g. the Royal Netherlands Football Association KNVB), but also small associations that focus on limited objectives, for example the preservation of a monument.
Prohibition on profit appropriation
According to the law, an association is a legal entity with members that focuses on a certain objective. The association is not allowed to have a commercial objective, but can make a profit. However, the association is not allowed to distribute this profit among its members. The profit will have to be used for the objective of the association.
Informal or formal association
The law makes a distinction between informal and formal associations. A formal association is formed by notarial deed; an informal association is not. An informal association has limited legal capacity, and the board is jointly and severally liable for the debts of the association. This is different for a formal association, which is also called an association with full legal capacity.
General Meeting of Members
An association does not have any shareholders – it has members. Persons are members of an association by means of a membership. Membership is subject to conditions that often are described in the articles of association. In return for the (material or other) benefits of membership, the members are usually obliged to pay a membership fee. The members are represented in one body, called the General Meeting of Members (GMM). The GMM decides on appointment of the board, amendments to the articles of association, and approval of the annual balance sheet. Every member has one vote
Board and decision-making
The board represents the association. Unless otherwise determined in the articles of association, the board of the association is appointed from among its members by the GMM. The GMM also has the power to dismiss and suspend board members. In any case, the board has a chair, a secretary, and a treasurer.
End of membership
Membership of an association is personal. This is why a membership cannot be transferred to someone else. A membership ends in the following situations. In the first place, the membership will end on the death of the member. In addition, the membership may be terminated by the member or the association. A member may terminate at any time, but will usually have to observe a notice period. The association can only terminate in cases that have been described in the articles of association or if a member no longer meets the requirements of the association. The association may also terminate a membership if it cannot reasonably be required to continue that membership. This rather vague rule regularly is the subject of litigation.
Expulsion of a member of an association
The board can suspend or remove (expel) members. A member can only be expelled in case of unfair prejudicing of the association itself. An expelled member has to be given written notice by the association of the grounds for the expulsion. If a member does not agree with the decision, he can use the appeal procedure of the association itself. If the decision is upheld, the member can go to court via a lawyer.
If the decision has been made contrary to the law or the articles of association, it may be null and void. The decision may be voidable if it was taken contrary to the principles of reasonableness and fairness.
Suspension of a member of an association
During the expulsion procedure, the member is suspend by operation of law. Suspension as an independent disciplinary measure is not provided for at law, but large associations often have included the possibility of suspending members, temporarily or otherwise, in their articles of association. The same possibilities of appeal as described above under expulsion are available in case of a decision to suspend.