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Non-Profit Association: What it is and How to Create It

The non-profit association is a non-profit organization. Let’s see what it is, what its characteristics are, what types exist and how to make it up.

What is a non-profit association?

The non-profit association, no profit in English, is a non-commercial body made up of 3 or more people who organize themselves to achieve goals of an ideal, solidarity, or social utility (cultural, recreational, social, environmental, welfare, sports, etc.). Associations are also circles or clubs, political parties, trade unions, and some religious bodies.

The association has the following characteristics :

  • ideal purpose in accordance with public order and morality
  • non-profit
  • equal rights and duties of the members
  • freedom of membership for new members
  • free eligibility of administrative bodies
  • prohibition on distributing profits or operating surpluses
  • obligation to donate the assets to another entity for similar purposes in the event of the dissolution of the entity
  • annual reporting obligation.


What does “non-profit” mean

One of the main characteristics of the associations is the absence of profit. This means that its main activity must consist of activity of a non-commercial nature to avoid the application of the tax and accounting regime of companies.

This does not mean that the entity cannot carry out commercial activities (for example, the production or sale of goods or services). However, this activity must not be exclusive and prevalent with respect to the institutional one but must be instrumental in finding the funds necessary to achieve the association’s purposes. For example, the charity for the homeless will be able to sell T-shirts and gadgets to raise funds. If the commercial activity is carried out habitually it will be necessary to open a p. VAT. Conversely, if this activity is purely occasional (eg the only annual event with a small sale of gadgets) it will not be necessary to open it.

Types of associations

First of all, there are two broad categories :

  • recognized associations: are those that must be established by the notary to obtain the recognition of a legal person. This means that creditors can only claim against the assets of the entity and not those of the associates. A notary is required for their constitution and the minimum capital must be at least € 15,000 (a higher amount may be requested depending on the type of association and the region they belong to)
  • unrecognized associations: those that have not requested or had the recognition of legal persons. This means that the directors are liable for their personal assets if that of the institution is insufficient. A notary is not required for their constitution, but it is sufficient to sign the deed of incorporation and the statute. No minimum capital is required.

Then, depending on the area of ​​operation, non-profit organizations are divided into different types :

  • Cultural Association: aims to promote cultural activities, such as, for example, education, research, conservation, protection, enhancement of artistic, historical, linguistic, food and wine, naturalistic, etc.
  • Voluntary Association (called ODV): aims to prevent situations of marginalization, hardship, and socio-economic need. The activity is carried out by volunteers mainly in favor of third parties in a state of need and not towards their own members
  • Social Promotion Association (called APS): aims to raise the well-being and quality of life of its members, their families, or third parties. The activity is carried out mainly towards its members.
  • Non-Profit Organization of Social Utility (called  ONLUS ): pursues solidarity interests, such as charity, social assistance, health care, training, scientific research, the promotion of culture and art, etc.
  • Amateur Sports Association (called ASD): promotes  amateur sports activities, including educational activities, within the disciplines regulated by CONI
  • Third Sector Entity ( ETS ): introduced by the recent  Third Sector Reform. All the types examined above can become ETS by registering with the Single National Third Sector Register (RUNTS). Even if the ETS regulation is already in force it is only partially applicable.

Deed of incorporation and statute

The statute and the deed of incorporation of the association are the necessary documents to be able to establish the non-profit body and regulate its organization and its functioning. Particularly:

  • the Deed of Incorporation is the document that contains the mandatory information required by law (eg the name, the data of the founding members, the data of the administrators, etc.);
  • the Statute, on the other hand, governs the functioning of its bodies (the rules of the administrative body, of the assembly, etc.), of the admission of new members, the destination of assets, etc.

How to set up a non-profit

To establish the association, first of all, the statute and the deed of incorporation must be generated, which must be signed by the founding members. Once established, you will need to request the tax code from the Revenue Agency. The tax code is necessary to carry out the most important operations (eg opening a current account, purchasing goods, entering into contracts).

Furthermore, to obtain public grants and take advantage of sector tax breaks, the association must be registered with the Revenue Agency within 20 days of its constitution.

If you usually carry out commercial activities, remember that you will also need the p. VAT for the association to always be requested from the Revenue Agency.

Finally, non-profit organizations wishing to take advantage of tax breaks will have to submit the EAS model. This model contains the data and information relevant for tax purposes and must be sent to the Revenue Agency within 60 days of its establishment.