Even if an association in Germany no longer has any assets, the call to creditors remains mandatory. This is confirmed by a recent ruling by the Higher Regional Court of Karlsruhe, which makes it clear that the dissolution of an association without a prior call to creditors is inadmissible if assets were still available at the time of the dissolution resolution.
This is important information for nonprofit organizations in order to avoid delays in the liquidation process, costs, and personal liability risks.
Financial situation counts, not application for deletion
In our consulting practice, we repeatedly see that charitable associations underestimate the importance of the call to creditors. It is often assumed that the announcement can be omitted if there are no assets left anyway and therefore no one would be disadvantaged. However, case law takes a different view: the decisive factor is not the date of the application for deletion, but the financial situation at the time of the dissolution resolution.
Association applies for dissolution
The case underlying this decision illustrates the problem particularly clearly: at the time of the dissolution decision in September 2024, the association in question still had an account balance of 1,254.56 euros. These assets were then used up in full to pay various bills. The association’s liquidator then reported the dissolution of the association, stating that liquidation was not necessary due to a lack of assets and creditors. However, the registry court rejected the application because the dissolution had not been publicly announced and creditors had not been invited to register their claims. The Higher Regional Court of Karlsruhe concurred with this view.
Why the call to creditors remains so important
The court clarifies that the financial situation at the time of the dissolution resolution is decisive for the question of whether a call to creditors is necessary. If assets were still available at that time, the legally prescribed procedure of calling creditors must be followed, even if the assets were subsequently (after the resolution but before the application for deletion was filed with the registry court) completely depleted.
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Otherwise, liquidators could determine for themselves which creditors are still to be paid by making selective or time-controlled payments, thereby circumventing the purpose of Section 50 of the German Civil Code (BGB). The purpose of this provision is precisely to give unknown creditors the opportunity to register their claims and thus protect the legitimate interests of all creditors. The legislature wants to prevent the transparency and regularity of the liquidation proceedings from being undermined by deliberately induced insolvency.
If, in addition, the assets are used up entirely to pay individual bills before the application for dissolution of the association is filed, the liquidator consciously accepts that he will have to bear the costs of the announcement from his own funds if he still wishes to achieve dissolution. For board members and liquidators of charitable associations, this means that anyone who shortens or ignores the legal steps not only risks rejection by the registry court, but also, in extreme cases, personal liability.
(No) analogue application of Section 394 FamFG to associations
The court left open the question of whether deletion should be possible if the association is already effectively insolvent at the time of the dissolution decision. An analogous application of the exceptions expressly provided for in Section 394 of the German Act on Court Procedure in Family Matters and Non-litigious Matters (FamFG) to associations was discussed. This provision allows for dissolution without liquidation for, among others, insolvent general partnerships and civil law partnerships. However, in view of the deliberately differentiated selection of the legal forms included and the lack of reference to associations, there is little to suggest that this constitutes an unintended regulatory gap.
It can therefore still be assumed that liquidators of charitable associations remain obliged to comply fully with the legally prescribed steps of liquidation, even if there are no assets or outstanding claims at the time of the application for deletion.
Careful preparation for the dissolution of an association in Germany
Associations should therefore check at an early stage what costs will be incurred after dissolution and whether the available assets are sufficient for publicity, calling creditors, and any necessary liquidation measures. Careful preparation protects against delays, increased costs, and possible liability risks for the acting bodies.
Have you considered the following?
- Has it been checked whether assets were actually available at the time of the dissolution decision?
- Have you calculated the budget for the call to creditors and liquidation costs realistically?
- Are your articles of association adapted to current requirements in German association and nonprofit law?
Our NPO team will be happy to assist you with legally compliant liquidation and all questions relating to association law, charitable status, and the drafting of articles of association.
