Dissolving a non-profit organisation

Legal dissolution

It may be requested by petition to the District Court of Luxembourg or Diekirch either by a member, by the Public Prosecutor (the State) or by a third party with an interest in the association. The grounds for a request for dissolution are as follows: the association

 - would be unable to meet the commitments it has assumed,

 - would use its assets for purposes other than those contained in its object,

 - seriously violate the law, its Articles of Association or public order,

 - fails to file its accounts for two consecutive financial years, or

 - does not include at least two members.

The court may decide either to dissolve the association outright or to annul the offending act. An appeal may be lodged against a ruling that either dissolves the association or annuls one of its acts.

The same applies to a ruling on the decision of the liquidators.

In the event of dissolution by the court, the court shall appoint one or more liquidators who, after payment of the liabilities, shall dispose of the assets in accordance with the purpose set out in the Articles of Association.

If the articles of association do not contain a purpose, the liquidator will convene a general meeting to determine it. In the absence of a meeting, the liquidators will allocate the assets in a way that is as close as possible to the purpose for which the association was created. Members, creditors and the State may take legal action against the liquidators' decision.

Dissolution decided by the General Meeting

The General Meeting may only dissolve the company if 2/3 of the members are present and 3/4 of them have voted in favour of dissolution.

If this condition is not met, a second meeting may be called at which no quorum is required. Notice of this second meeting must be sent at least eight days before the date of the meeting and there must be a period of at least fifteen days between the first and second meetings. Dissolution will only be accepted if it is approved by a majority of 3/4 of the members present.

In the absence of a provision in the Articles of Association, the decision of the General Meeting dissolving the Association shall also determine the use to which the assets are to be put. Failing this, the liquidators will allocate the assets in a manner that is closest to the purpose for which the association was created.

 The liquidator is appointed either in accordance with the Articles of Association, or by the General Meeting, or by a court decision, which may be requested by any interested party or by the Public Prosecutor.

Publications

Decisions to dissolve the company (by the courts or by the general meeting), decisions relating to the conditions of liquidation and the appointment of liquidators will be published in extracts in the Annexes to the Mémorial, together with details of the liquidator and the allocation of assets (after discharge of liabilities).

The allocation of liabilities must not prejudice the rights of third parties, who will continue to be able to assert their rights before the court.

Any action by creditors shall be barred after five years from the publication of the decision to dissolve the company.