Dissolving an association or foundation: agreement, liquidation and destination of assets

Ley Orgánica 1/2002 (LODA) provides 3 routes in its article 17: the cause provided in the statutes themselves, the will of the members expressed in a General Assembly convened for this purpose (in practice, an Extraordinary General Assembly) and the causes of article 39 of the Código Civil (Civil Code) or a final court judgment.

If the route is the assembly agreement, the law requires a qualified majority unless the statutes state otherwise: affirmative votes must exceed half of those present or represented (article 12 LODA). You should review the statutes beforehand, because many set reinforced quorums or majorities and the registry checks them.

Dissolution does not extinguish the entity immediately: it opens the liquidation period and the association retains its legal personality until this ends (article 18 LODA). The members of the board of directors become liquidators, unless the statutes or the assembly designate other people.

The application to register the dissolution must be submitted within 1 month from the agreement or from when the cause occurs (articles 61 and 62 of RD 949/2015). It is submitted to the National Registry of Associations if the association is national, or to the corresponding regional registry if its scope is regional. In the national registry this procedure is exempt from a tasa (official fee).

The foundation is extinguished for the reasons in article 31 of Ley 50/2002: expiration of the term for which it was constituted, full realisation of the foundational purpose, impossibility of realising it, merger, cause provided in the constitutive act or in the statutes, or any other cause established in the laws.

The form depends on the cause (article 32). If the term expires, the extinction is by operation of law. If the purpose has been fulfilled, is impossible or a statutory cause occurs, an agreement of the Board of Trustees ratified by the Protectorate is required. If there is no agreement or the Protectorate does not ratify it, a reasoned court resolution is needed.

The Protectorate resolves the ratification within 3 months. If it does not resolve within that period, the extinction agreement can be understood as ratified (positive silence, according to the Ministry of Justice headquarters).

The liquidation is carried out by the Board of Trustees itself under the control of the Protectorate (article 33.1). Both the extinction and the liquidation must be recorded in a public deed (or court resolution) to be registered in the Registry of Foundations, and the state headquarters allows concentrating extinction and liquidation in a single act, proving before the notario (Spanish notary) the destination given to the assets. Once the liquidation is registered, the registry cancels the foundation's entries ex officio.

In the association, the destination of the remaining assets is set by the statutes and must respect the non-profit nature of the entity (article 17.2 LODA). If the statutes say nothing, article 39 of the Código Civil (Civil Code) orders applying it to analogous purposes. The profits obtained from economic activities can never be distributed among the members (article 13.2 LODA).

If the association is declared of public utility or subject to the tax regime of Ley 49/2002, the rule is strict: all assets must go to entities benefiting from patronage or to public entities with general interest purposes. Outside these cases, any transfer of assets to the members requires a prior legal and tax analysis: this is the point that stalls the most files in the registry.

In the foundation, article 33 of Ley 50/2002 imposes a mandatory destination: the assets resulting from the liquidation go to the foundations or private non-profit entities of general interest designated in the statutes or in the foundational business; failing that, the Board of Trustees decides (if the founder gave it that power) and, failing that, the Protectorate. The statutes can also provide for public entities as recipients. The foundational assets cannot end up with the founder, the trustees or their families.

The registration of the liquidation in the Registry of Foundations expressly states which entities receive the assets and who designated them, so the documentation of the destination (agreement with the receiving entity, delivery receipts) is part of the file and Managora prepares it with you.

In the association, the members are not personally liable for the debts (article 15 LODA): the association responds with all its assets. However, the members of the board of directors and the liquidators are liable to the entity, the members and third parties for damages and debts derived from intentional, culpable or negligent acts: for example, distributing assets without having paid the creditors first.

If the association is insolvent, the liquidators must immediately promote the bankruptcy proceedings (article 18.4 LODA). Closing de facto, without liquidating or requesting deregistration, does not extinguish the tax or registry obligations: the entity continues to exist and remains obligated, with its directors in charge.

In the foundation, the trustees are jointly and severally liable to the foundation for the damages they cause by acts contrary to the law or the statutes, or carried out without the required diligence (article 17.2 of Ley 50/2002). Furthermore, if the Board of Trustees does not liquidate, the Protectorate requires it to do so and, if it does not comply, it can urge the liquidation itself (article 33.1). Skipping the Protectorate's ratification or giving the remainder an improper destination blocks the registry cancellation and exposes the trustees.

Registry deregistration does not close the tax front. You must submit form 036 checking box 150 (deregistration in the Census of Entrepreneurs, Professionals and Retainers) and the cause in box 151, within 1 month from the effective cancellation of the registry entries, according to the guide for the form itself at the headquarters of Hacienda (the Spanish Tax Agency, also known as AEAT).

If the entity was obliged to declare Corporate Tax, it must submit the last declaration for the tax period that ends with its extinction. If it had workers, it is necessary to process their deregistrations and that of the contribution account code with the Seguridad Social (the Spanish social security system), and it is advisable to cancel the electronic certificate and bank accounts once the liquidation is finished.

In the case of the foundation, the Ministry of Justice headquarters includes among the registration documentation the proof of liquidation of the Property Transfer and Documented Legal Acts Tax corresponding to the deed, in addition to the Protectorate's report and the entity's NIF (tax identification number).

Managora handles the complete file: we validate the cause and majorities, draft the minutes and certificates, coordinate the notarial deed when necessary, submit the registration in the competent registry and process the tax deregistration. You can start the closure from the association dissolution procedure page or the foundation extinction page, where you will see the updated cost of the service.