Definition and legal classification of clubs
A club refers to an association of several persons pursuing a specific common purpose within a fixed membership circle. Without a precise designation, a club is generally not an open association, but a closed society with limited membership and individual admission conditions. The legal structure of a club may vary depending on its purpose, organization, and practical form.
Legal forms and resemblance to associations
The club as an unincorporated association
In legal terms, a club is often classified as a non-legal (unincorporated) association in accordance with §§ 54 of the German Civil Code (BGB). Characteristic of this structure is that the club is not entered in the association register and does not possess its own legal personality. The objectives of a club are usually of a non-material nature (e.g., sporting, cultural, social, or socializing goals). Liability in such structures generally rests with the acting individuals or members, unless otherwise regulated in the articles of association or in the internal relationship with third parties.
Distinction from a registered association
A club can fundamentally also be managed as a registered association (e.V.) under § 21 BGB, provided it is intended to be permanent, has its own board, and pursues a non-commercial purpose. Registration in the association register grants the club its own legal personality, allowing it to hold rights and obligations. As a rule, members are not personally liable for the club’s obligations.
Other possible legal forms
Alternatively, clubs can be organized as a civil law partnership (GbR, §§ 705 ff. BGB), as a limited partnership, or as an economic association if they pursue primarily commercial interests. The choice of legal form depends on the type of purpose pursued as well as the desired structure for liability and representation.
Member rights and obligations
Admission and termination of membership
The conditions for joining a club and the cessation of membership are usually regulated in the articles of association. Typical prerequisites include submitting an application for membership, approval by the existing members or a board, and payment of any admission or membership fees. Withdrawal takes place according to the statutory deadlines or immediately for serious reasons, such as gross breaches of statutory duties.
Membership fees and levies
The financing of a club is regularly achieved through membership fees, donations, and internal assessments. The amount and due date of these contributions are agreed internally and stipulated in the articles of association. In case of payment default, statutory sanctions can apply up to and including exclusion of the member.
Representation, bodies, and internal organization
Board and power of representation
The majority of clubs provide for the election of a board or spokesperson group, which represents the organization both externally and internally. The powers of representation are determined by the club’s articles of association and, where applicable, by the statutory provisions of the German Civil Code. In unregistered clubs, the board is generally personally liable for obligations towards third parties.
General meetings and adoption of resolutions
Clubs are organized through regular general meetings. Central resolutions are made here, such as amendments to the articles of association, election of the board, or questions about the use of funds. Adoption of resolutions usually requires a specific majority of present members; the precise structure is governed by the club’s bylaws.
Liability and external relations
Liability of members and officers
In principle, in an unregistered club, each natural person who acts on behalf of the club is liable with their personal assets for any obligations. In registered clubs, only the association’s assets are liable, while members are largely exempt from personal liability unless intentional harmful acts are involved.
Tortious and contractual liability
If a club or its members violate statutory provisions or contractual obligations towards third parties, this may result in claims for damages. It is important to note in particular that tortious liability can always apply personally, regardless of legal status—for example, in case of breach of traffic safety duties or other unauthorized actions.
Tax aspects of the club
Non-profit status and tax benefits
Clubs that exclusively and directly pursue non-profit, charitable, or religious purposes may be tax-privileged (§§ 51 ff. AO). Recognition requires appropriate articles of association and actual management in accordance with tax requirements. Typical benefits include exemption from corporation tax and VAT, or the ability to issue donation receipts.
Taxation of non-charitable clubs
Clubs with primarily commercial orientation are subject to regular taxation, especially corporation tax, trade tax, and VAT if relevant income is generated. The decisive factor for tax treatment is the club’s actual activity and the use of funds in accordance with tax law provisions.
Special forms and special provisions
Private and exclusive clubs
Private clubs, such as golf clubs, gentlemen’s clubs, or exclusive societies, are often subject to stricter admission rules and statutes. Here too, the articles of association, internal regulations, and the members’ autonomy determine rights, obligations, and possible exclusion procedures.
Clubs in connection with discotheques and nightlife
The term “club” in nightlife (for example, music clubs or discotheques) generally refers to a commercial establishment. In this case, regulations regarding the hospitality business, trade law, and, where applicable, other public law requirements apply. Operating such a club requires the respective official permits.
References and case law
For the legal classification of clubs, §§ 21 ff., §§ 54 ff., and §§ 705 ff. of the German Civil Code, as well as the Fiscal Code of Germany (§§ 51 ff. AO) and the Associations Act, must be consulted. Relevant court decisions concern the distinction from other types of companies, questions of liability, association law, and tax matters.
This article provides a comprehensive overview of the legal aspects of the term club and its various forms and legal consequences. The precise legal assessment always requires a case-by-case evaluation based on the individual structure and objectives of a club.
Frequently asked questions
What legal requirements must be met to establish a club?
To establish a club in Germany, certain legal requirements must be fulfilled, which are essentially governed by the German Civil Code (BGB). First, it must be clarified whether the club is to be set up as an unincorporated association or as a registered association (e.V.). An unincorporated association is established simply by the association of several persons pursuing a common purpose by means of an organized structure, without the need for registration in the association register. In contrast, a registered association must be founded by a founding meeting with at least seven members. This requires the drafting and adoption of statutes, which must contain mandatory formalities (e.g., name, registered office, purpose, and rules for admission/withdrawal). The club’s board must be elected and the entry into the association register at the competent district court must take place. Additionally, tax obligations must be observed, such as registration with the tax office and compliance with non-profit regulations if sought. If applicable, commercial or assembly law regulations must be observed, especially if regular events or club premises are operated. Compliance with youth protection laws and neighborhood rights, and sometimes noise protection regulations, may be required depending on the club’s orientation.
How is the board of a club liable towards third parties?
The liability of a club’s board, especially in the case of a registered association, is based on the general rules of the German Civil Code (§§ 26 ff. BGB). The board represents the club in and out of court and is generally not personally liable for the association’s obligations, provided it acts within its statutory authority and the articles of association. Personal liability may arise, however, if the board intentionally or due to gross negligence breaches its duties, for example, in the event of a failure to exercise proper management (§ 31a BGB). If the board acts outside its representative authority or enters into transactions without the necessary resolution, it may also be personally liable. Internally, the association may also hold the board liable if it can be proven that it breached its duties and this caused damage to the club. A limitation of liability may be stipulated in the articles of association, but it is only effective to a limited extent against third parties.
Under what circumstances does a club require official approval for events?
Clubs planning public events are subject to numerous legal requirements. As a general rule, every public event must be reported to the regulatory authority or, in certain cases, require approval, especially for larger events. Relevant legal areas include assembly law, building law (use of premises), hospitality law (in case of sale of alcohol or food), as well as noise protection and youth protection law. Commercial regulations may apply if the events pursue economic interests and, where applicable, further safety requirements (e.g. fire protection, hygiene regulations) must be fulfilled. Whether explicit approval is required often depends on the type and size of the event as well as the public nature of access. Private, internal club events are subject to fewer requirements than publicly advertised events. Violations may result in fines and, if necessary, prohibition of the event.
What tax obligations does a club have?
A club is generally subject to taxation, whereby it must be differentiated whether it has been recognized as non-profit or not. Non-profit status must be applied for at the competent tax office and requires in particular the pursuit of a tax-privileged purpose and compliance with the principle of selflessness (§§ 51 ff. AO). A non-profit club enjoys tax benefits (e.g., with respect to corporate income tax and trade tax) and can issue donation confirmations. Regardless of non-profit status, clubs are required to properly record their income and expenses and submit an annual tax return. Value added tax may arise if income exceeds the exemption limit, for example, from the sale of beverages or admission fees. If employees are hired, payroll tax filings and social security contributions must be made. Non-charitable clubs are subject to the general tax rules for legal entities.
How is membership in a club legally regulated?
Membership in a club is primarily governed by the articles of association. These must include regulations on acquisition, rights and obligations, as well as on withdrawal or exclusion of members (§ 58 No. 3 BGB). Membership is typically acquired through a written application and resolution to admit by the board or general meeting. Rights arise from the articles and generally include participation in meetings, voting rights, and possibly other privileges. Obligations typically consist of paying fees and complying with club rules. Withdrawal is possible at any time unless otherwise regulated in the articles, while expulsion is permitted only for good cause and is subject to special statutory requirements and proper expulsion procedure. If formal procedures are not observed, exclusions are often contestable.
What data protection requirements apply to clubs?
Clubs regularly process personal data of their members (e.g., name, address, account details, date of birth). They are subject to the requirements of the General Data Protection Regulation (GDPR) and the Federal Data Protection Act (BDSG). This includes the obligation to inform data subjects about the processing of their data (transparency obligations), the need for a legal basis for data processing (e.g., fulfillment of the membership contract), the data protection-compliant storage and deletion of data, as well as the implementation of technical and organizational measures for data security. Members have extensive rights, such as access, correction, deletion, and objection to processing. If the club regularly handles particularly sensitive data or more than 20 people are entrusted with data processing, a data protection officer must be appointed. Violations can result in significant fines.
To what extent may clubs exercise domiciliary rights and issue bans?
Clubs, as the owners of their premises, generally have domiciliary rights and can determine who is allowed entry and remain on the premises. This right includes the ability to deny entry or expel members, guests, or third parties. The exercise of these rights must nevertheless comply with general laws, particularly the General Equal Treatment Act (AGG). Discriminatory bans on entry based on ethnicity, gender, religion, or other prohibited characteristics are not permitted and may trigger civil claims. With respect to bans on members, club-internal rules must also be observed. This usually requires a legitimate reason and compliance with the statutory procedure; otherwise, the ban may be contested. Bans against non-members are generally less formal but should always be documented.
