Liability and legal forms for associations

Questioner

Hello, we are a neighborhood association and are wondering about liability for activities and other matters. Are the board members personally liable? Does it make sense to become a foundation?

Lawyer

If an association is not established by notarial deed, the directors are jointly and severally liable for the association's debts. To prevent this, you can convert the association into an association with full legal capacity (notarial deed), or (indeed) become a foundation.

Questioner

What is the best choice . For the financial part It is said that a foundation cannot make a profit on paper

Lawyer

A foundation may not have members and may not be for-profit, that's true. If you want to stay connected with your members, an association is the only option. If you prefer to operate independently and are not for-profit, a foundation is better. I would consult a tax specialist to determine whether there are any tax advantages.