In a recent decision, the Federal Administrative Court (BVerwG) established important guidelines for enforcing bans on associations in Germany. Of particular importance is the Court’s clarification as to which authority has the power to determine whether a particular asset actually forms part of the assets of a banned association. The decision provides greater legal certainty while also clarifying which legal remedies remain available to affected parties.
German association law and liability in association bans
The proceedings arose from a ban imposed on a motorcycle club. During a house search, authorities found EUR 20,000 in cash at the home of an association officer. The authorities assumed that the money was intended to serve the purposes of the association and ordered that it be secured. The question later arose as to whether the enforcement authority could make a binding determination that the money formed part of the association’s assets.
The affected individual argued that the money did not constitute association assets. He also maintained that the funds were intended to pay for legal representation for incarcerated members. After the lower courts reached differing conclusions, the Federal Administrative Court was required to clarify the allocation of jurisdiction between the prohibiting authority and the enforcement authority.
Although the decision does not directly concern nonprofit law, it is relevant to board members, managing directors, and other individuals responsible for nonprofit organizations. It illustrates the importance of clearly identifying ownership of assets and maintaining proper actual management of the organization. Particularly in associations and foundations, unclear ownership arrangements can give rise to significant legal risks in Germany.
Corporate governance: Why jurisdiction matters
The Federal Administrative Court clarified that securing an asset constitutes merely a provisional measure. Once the ban on the association and the forfeiture order become final and binding, the securing measure loses its independent legal effect. The Court expressly stated: “Once the association ban and the forfeiture order become final and binding, the securing measure, as a provisional enforcement measure, loses its legal effect.”
The Court’s second key holding is even more significant. According to the Court, the enforcement authority may secure assets and, in doing so, assess whether it appears likely that those assets belong to the association. However, final and binding authority to determine whether an asset forms part of the association’s assets rests exclusively with the prohibiting authority. This is intended to prevent conflicting decisions by different authorities. An important principle can be derived from this for nonprofit organizations: responsibilities and the allocation of assets must be clearly documented.
One illustrative example: If a board member holds donations or project funds in a personal bank account or in their personal custody, a dispute may later arise as to whether the funds belong to the association or to the individual. Proper bookkeeping, clear resolutions, and transparent asset management can help prevent such conflicts. These measures are also an essential component of good corporate governance and proper actual management of the organization.
Charitable status and asset management: Practical implications for organizations
The decision makes clear that authorities are bound by statutory limits on their jurisdiction when determining ownership of assets. For associations, foundations, and other nonprofit organizations, this provides greater legal certainty. At the same time, the ruling underscores the importance of carefully drafted articles of association and transparent, traceable asset management.
Would you like to receive news like this in your inbox every month? Subscribe to our newsletter “German Nonprofit Update”.
We recommend that nonprofit organizations regularly review their internal processes. In particular, they should document which assets belong to the association, who is authorized to control or dispose of them, and the basis on which decisions are made. Clear documentation can prove crucial later, particularly with respect to major donations, reserves, or project-specific funds.
Are assets of your association held in the custody of members of its governing bodies? Are responsibilities clearly defined in your articles of association and in the organization’s actual management? Are there risks concerning the distinction between personal assets and association assets or in the way your organization manages its assets?
Our NPO team would be happy to advise you on matters relating to association law, charitable status, the drafting of articles of association, and legally compliant corporate governance.
Federal Administrative Court, Judgment of March 25, 2026, Case No. 6 C 8.24
