Society

Difference between Association and Foundation

When an entrepreneur is going to establish any organization, the first thing to think about and take into account is its legal form. This form will depend on the number of partners, the purpose, the capital and the patrimonial responsibility that he will have. Now, non-profit organizations are formed to obtain a benefit above the economic one, which favors society, therefore, the income obtained will be destined for the entity itself. This is done so that it can continue carrying out its activities and thus achieve the proposed objectives.

Thus, among the most common non-profit organizations we have associations and foundations, whose purpose is to group people with a common social objective and since both legal forms have some similarities, it is important to know some specifications of each. one of them to be able to differentiate them.

Association

An association is the union of a group of at least three people who have a common goal and come together to achieve it, being totally independent of any political entity, company or organization. In addition, an initial patrimony is not required for its formation and the document for its constitution can be public or private.

On the other hand, there are several types of associations:

  • Those whose objective is to satisfy spiritual, intellectual and moral needs.
  • Those whose objective is material ends.
  • Partnerships in participation : where a person joins with another who contributes to the estate in exchange for profits or losses from a specific activity.
  • The union association : its objective is to protect the professional activities of all its associates.
  • The neighborhood association : its premise is to ensure coexistence and protection of the neighborhood.

Foundation

It is a type of non-profit legal form and as its name indicates, it has founders who provide it with assets. Thus, the members of the foundation can oscillate between one or more and must guarantee that the social objective is fulfilled and, in turn, watch over the assets so that said objective can be achieved.

On the other hand, the document for its creation must be public and its directors, as it is a non-profit entity, must not show any economic benefit and, generally, the surplus of the social work carried out is reinvested. However, the legal entity that manages the foundation can carry out activities that enrich its assets.

Once these legal figures have been defined, we present below a comparative table that shows some differences between the Association and the Foundation:

Association Foundation
It is made up of a minimum of three people. It is made up of one or more founders.
The document can be made public or private. The document is purely public.
The positions are elected by Assembly. The positions are chosen by the Founder.
Managerial positions can be free or rewarded. Management positions are completely free.
No initial equity is required. An initial capital is necessary.

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