Liability

The activity report (also called reporting) helps a higher-level body to assess the financial situation of an association and to prepare for the future. The committee gives an account of its activities in the past year to the general meeting. For this purpose, it prepares the annual report and the annual financial statements. The administrative office or the working groups report regularly to the committee. The activity report always has a content-related and a financial component. Together with the controlling reports, it forms the basis for the superior body to assume its responsibilities. The executive committee, for instance, reports to the general meeting on its activities in the past year (annual report and annual financial statements). The administrative office reports regularly to the committee. Activity reports are submitted orally or in writing.

Question

Is it right that the audit report isn't to be voted on? Is it true that following the approval of the annual report a vote is to be held on the audit report and then the annual financial statements?

Answer

The audit report is prepared by an independent person or body. It recommends whether the financial statements should be accepted or rejected and may also contain further recommendations.

A vote is not held on the audit report; it serves as an opinion-forming aid for members with respect to the annual financial statements. If the members are not satisfied with the work of the auditor, they can vote the auditor out and propose somebody else.

The activity report (also called reporting) helps a higher-level body to assess the financial situation of an association and to prepare for the future. The committee gives an account of its activities in the past year to the general meeting. For this purpose, it prepares the annual report and the annual financial statements. The administrative office or the working groups report regularly to the committee. The activity report always has a content-related and a financial component. Together with the controlling reports, it forms the basis for the superior body to assume its responsibilities. The executive committee, for instance, reports to the general meeting on its activities in the past year (annual report and annual financial statements). The administrative office reports regularly to the committee. Activity reports are submitted orally or in writing.

Question

Is it right that the audit report isn't to be voted on? Is it true that following the approval of the annual report a vote is to be held on the audit report and then the annual financial statements?

Answer

The audit report is prepared by an independent person or body. It recommends whether the financial statements should be accepted or rejected and may also contain further recommendations.

A vote is not held on the audit report; it serves as an opinion-forming aid for members with respect to the annual financial statements. If the members are not satisfied with the work of the auditor, they can vote the auditor out and propose somebody else.

Discharge refers to a discharge from liability. By approving the annual report and the annual accounts, the general assembly grants discharge from liability for the administration of the association to the executive committee or the individual members of the executive committee. From this moment on, the executive committee is no longer liable to the association for its actions; however, this applies only to facts of which the members are aware; it does not apply to third-party liability claims, for which the association or the executive committee can be held accountable if need be.

Question

Can a new committee be elected if the old committee has not yet been discharged?

Answer

Following the approval of the annual financial statements, the general meeting grants discharge to the current committee. This means that from this point onwards the discharged committee is no longer liable for any debt. Instead, liability is assumed by the association in accordance with the provisions of the articles of association. Although a discharge resolution is not required by law, it is generally customary within the framework of the general meeting's supervisory duty in accordance with Article 65(2) of the Swiss Civil Code (ZGB) and is provided for in most associations' articles of association.

If the association's articles of association do not contain any provisions to contrary, it is also possible to elect a new committee without discharging the previous committee members who have stepped down. The former committee is no longer in office. Under civil law, however, any claims for damages can also be asserted against a committee that has already stepped down.
In the interest of ensuring the reasonable continuation of the association's activities, it is advisable for any claims for damages against the former committee members to be asserted in a quick and timely manner so that the issue of liability is clarified.

The executive committee is liable to the association for diligent and correct management. Once the general meeting has granted the discharge (relief of the committee), the committee is relieved from its liability for the past year. However, this only applies to those activities that have been disclosed to the general meeting. By granting the discharge, the general meeting declares to waive any liability claims against the entire committee or individual committee members. If committee members intentionally or negligently harm the association (culpable violation of their due diligence), they are personally liable for the damage. There are two special cases: liability for OASI contributions and VAT. If an association has employees, it is liable for the payment of the contributions according to article 52, OASI law. If it is subject to VAT, it is liable for the taxes due. The committee members are also personally liable if they cannot relieve themselves, which is difficult in this particular case.

Accountability means taking responsibility and standing up for what you do or do not do, and the way you do it. To a specific extent, responsibility for certain tasks can be delegated to someone else.

A compensation is payable if damage has been caused by wrongful, illegal conduct.

The committee manages the business of the association. It is responsible for the association and must conduct matters with due diligence and in the interest of the association. If it culpably violates its due diligence (deliberately or through gross negligence) and this causes damage to the association or a third party, the committee (as well as the association itself) may be liable for damages. The same applies to each single member of the committee.

If a document of legally significant content is altered or misrepresented, this may be criminal forgery or false certification. Changing the minutes without the consent of the parties involved may constitute falsification of a document.

The term liability is used in connection with the performance of a contract as well as the obligation to pay damages for harmful conduct. The association is liable for the legal transactions of its bodies, and also for harmful conduct on their side, provided it is culpable and unlawful and leads to a material, monetary damage or intangible injury. In these cases, the association is responsible and must stand up for the financial consequences. The association is exclusively liable with its assets, unless otherwise stipulated in the articles of association. A distinction must be made with regard to the liability of the bodies towards the association. The liability of the bodies of an association arises from the legal relationship between the person in a certain function, e.g. a committee member, and the association.

The executive committee is liable to the association for diligent and correct management. Once the general meeting has granted the discharge (relief of the committee), the committee is relieved from its liability for the past year. However, this only applies to those activities that have been disclosed to the general meeting. By granting the discharge, the general meeting declares to waive any liability claims against the entire committee or individual committee members. If committee members intentionally or negligently harm the association (culpable violation of their due diligence), they are personally liable for the damage. There are two special cases: liability for OASI contributions and VAT. If an association has employees, it is liable for the payment of the contributions according to article 52, OASI law. If it is subject to VAT, it is liable for the taxes due. The committee members are also personally liable if they cannot relieve themselves, which is difficult in this particular case.

Misappropriation is unlawful conduct and will be punished. Misappropriation is the act of finding and keeping a thing or an asset without being entitled to keeping it. Embezzlement, which is also punishable, is something else: Anyone who appropriates an asset entrusted to him commits embezzlement. This includes the act of taking cash from the cash register without authorisation.

It is important to determine which of the following insurance policies should be taken out for which associations: liability, property, event, accident and social insurances. If third parties could be harmed by the association, a liability insurance is highly recommended. The insurance also fends off unjustified claims towards an association.

In order to avoid the unwelcome payment of damages, the association should take out liability insurance in accordance with the association’s field of activity and the risk implied. Some insurance companies offer special conditions for associations.

Ancillary staff in the sense of the law (Article 55 CO) are persons who carry out activities for the association and provide support, e.g. for the association’s events. Ancillary staff is neither active as a body of the association (committee, auditors, commissions) nor are they employees of the association. In the event of a damages claim, the association is not liable for their misconduct if it can prove that it has exercised the necessary care in selecting, guiding and controlling the ancillary staff.

A compensation is payable if damage has been caused by wrongful, illegal conduct.

Those who act in their capacity as members of a governing body, e.g. as committee members, create a commitment for the association through their actions. The association is responsible or liable for the legal transactions, which its governing bodies enter into, and for their conduct in general. It is also liable for any culpable conduct of its governing bodies towards an injured person. However, if a member of a governing body causes damage, he/she is personally responsible for his/her culpable conduct, too.

The term liability is used in connection with the performance of a contract as well as the obligation to pay damages for harmful conduct. The association is liable for the legal transactions of its bodies, and also for harmful conduct on their side, provided it is culpable and unlawful and leads to a material, monetary damage or intangible injury. In these cases, the association is responsible and must stand up for the financial consequences. The association is exclusively liable with its assets, unless otherwise stipulated in the articles of association. A distinction must be made with regard to the liability of the bodies towards the association. The liability of the bodies of an association arises from the legal relationship between the person in a certain function, e.g. a committee member, and the association.

Misappropriation is unlawful conduct and will be punished. Misappropriation is the act of finding and keeping a thing or an asset without being entitled to keeping it. Embezzlement, which is also punishable, is something else: Anyone who appropriates an asset entrusted to him commits embezzlement. This includes the act of taking cash from the cash register without authorisation.

Accountability means taking responsibility and standing up for what you do or do not do, and the way you do it. To a specific extent, responsibility for certain tasks can be delegated to someone else.

A compensation is payable if damage has been caused by wrongful, illegal conduct.

If a document of legally significant content is altered or misrepresented, this may be criminal forgery or false certification. Changing the minutes without the consent of the parties involved may constitute falsification of a document.

Question

Who is king/queen of the association?

Answer

There is neither a king nor a queen in the association. The committee as an overall body assumes responsibility for the association's business. It has the right and the obligation to take care of the association's affairs and to represent it externally. That's what the law says.

Unless the articles of association provide more specific requirements, the committee can organise itself and the distribution of its tasks as it sees fit. It can, for example, introduce a departmental system. However, it is always true that the committee is a collegial body that assumes joint liability for the association. It must be ensured that all committee members can have their say. The chairperson cannot issue commands alone.

Those who act in their capacity as members of a governing body, e.g. as committee members, create a commitment for the association through their actions. The association is responsible or liable for the legal transactions, which its governing bodies enter into, and for their conduct in general. It is also liable for any culpable conduct of its governing bodies towards an injured person. However, if a member of a governing body causes damage, he/she is personally responsible for his/her culpable conduct, too.

The executive committee is liable to the association for diligent and correct management. Once the general meeting has granted the discharge (relief of the committee), the committee is relieved from its liability for the past year. However, this only applies to those activities that have been disclosed to the general meeting. By granting the discharge, the general meeting declares to waive any liability claims against the entire committee or individual committee members. If committee members intentionally or negligently harm the association (culpable violation of their due diligence), they are personally liable for the damage. There are two special cases: liability for OASI contributions and VAT. If an association has employees, it is liable for the payment of the contributions according to article 52, OASI law. If it is subject to VAT, it is liable for the taxes due. The committee members are also personally liable if they cannot relieve themselves, which is difficult in this particular case.

Misappropriation is unlawful conduct and will be punished. Misappropriation is the act of finding and keeping a thing or an asset without being entitled to keeping it. Embezzlement, which is also punishable, is something else: Anyone who appropriates an asset entrusted to him commits embezzlement. This includes the act of taking cash from the cash register without authorisation.