Dissolution of association

Find out information on deletion from the registers as well as on bankruptcy and liquidation

Dissolution

Reasons for the dissolution of an association are the following:
  • decision of the assembly on the dissolution of the association
  • acquisition of another association, merger with another association, division of the association by separation
  • the fact that twice as much time has elapsed than is foreseen for holding regular meetings of the assembly without a meeting being held
  • a final court decision on the dissolution of the association
  • initiation of bankruptcy proceedings
  • at the request of a member, the fact that the number of members of the association has fallen below the number of founders required for the establishment of an association without a decision to admit new members being made by the competent body of the association within one year from the occurrence of this fact.
 
A person authorised to represent the association must submit an application to the competent administrative authority for the entry of changes in the Register of Associations related to the dissolution of the association.

To register changes, the following is necessary:
  • application for the entry of changes in the Register of Associations of the Republic of Croatia
  • decision on the change
  • record of the work of the body of the association responsible under the statute for making the decision on the basis of which the association seeks to enter a change in the Register of Associations
  • paying HRK 35 for administrative fee in the form of state stamps under Tariff No 2 of the Regulation on the Tariff of Administrative Fees (OG 08/17).

Application for the entry of changes in the Register of Associations of the Republic of Croatia can be found on the website of the Ministry of Justice and Public Administration.

An application for entry in the Register of Associations or an application for the entry of changes in the Register of Associations must be submitted in two identical copies.

The application can also be submitted by filling in an electronic form available on the website of the Ministry of Justice and Public Administration

Entering changes in the Register of Associations.

A decision is issued on the entry of changes in the Register of Associations.
 

Bankruptcy proceedings

The provisions of the Bankruptcy Act (OG 71/15 and 104/17) apply to associations in the same way as to other legal persons.  Pursuant to the Act on Associations (OG 74/14 and 70/17), bankruptcy is one of the reasons for the dissolution of an association. Bankruptcy proceedings are initiated when the claims of the association’s creditors cannot be settled from its assets or when the performance of the activities of the association is prohibited by a court decision. Bankruptcy proceedings are conducted in accordance with the provisions of the Bankruptcy Act.
 

Summary bankruptcy proceedings

Summary bankruptcy proceedings can also be conducted against an association if the legal person in question (the association) has no employees, and in the event that the Register of the Order of Payment Bases contains records of unexecuted payment bases for a continuous period of 120 days. 

Pursuant to the provision of Article 428 of the Bankruptcy Act, regardless of the association’s activity or inactivity, and regardless of the financial amount of outstanding liabilities, within eight days after the expiration of the period of 120 days of insolvency of the association, the Financial Agency (FINA) submits ex officio to the commercial court a request for the application of summary bankruptcy proceedings, and is not required to inform the legal person (the association) about the submission of this request. After consulting the Register of Associations, the commercial court will publish a notice on the e-Court Notice Board website containing data for the identification of the debtor, data on the total amount of debt recorded and attributed to unexecuted payment bases, an invitation to persons authorised by law to represent debtors to submit to the court a notarised inventory of assets and liabilities on the prescribed form within 15 days of publication of the notice, an invitation to creditors to propose the opening of bankruptcy proceedings no later than 45 days from the publication of the notice, and a warning about the legal consequences of not submitting a proposal to open bankruptcy proceedings.

If the persons authorised to represent the debtor (the association) do not submit an inventory of assets and liabilities of the debtor within 15 days, or if it is evident from the inventory that the debtor’s assets are insufficient to cover the foreseeable costs of bankruptcy proceedings, and if no creditor proposes the opening of bankruptcy proceedings within 45 days and advances funds to cover the costs of the proceedings, the debtor will be considered insolvent and the commercial court will ex officio issue a decision on opening and concluding summary bankruptcy proceedings on that same day. After the conclusion of the bankruptcy proceedings, the commercial court delivers ex officio a final decision and forwards it to the competent administrative authority, which is required, on the basis of that decision, to delete the association from the Register of Associations, without making a separate decision on the deletion. Upon its deletion from the Register of Associations, the association ceases to exist.

 

Liquidation proceedings

If an association has sufficient assets to settle the claims of its creditors, and the decision on the dissolution of the association was made by the competent body of the association, liquidation proceedings are carried out in accordance with the provisions of Articles 29 and 30 of the Act on Associations.
Liquidation proceedings are carried out in some cases of dissolution of an association.

The competent administrative authority as the registration authority issues a decision on dissolution of the association and initiation of liquidation proceedings ex officio or at the proposal of a person authorised to represent the association, the competent body of the association, members of the association or other interested natural and legal persons.

Liquidation proceedings are carried out in the following cases: in case twice as much time has elapsed than is foreseen for holding regular meetings of the assembly without a meeting being held, when a member of the association submits an application to dissolve the association, if the number of members of the association has fallen below the number of founders required for the establishment of an association without a decision to admit new members being made by the competent body of the association within one year from the occurrence of this fact, as well as on the basis of a final court decision on the dissolution of the association.

On the basis of the received report on the conducted liquidation proceedings, the competent administrative authority issues a decision on the deletion of the association from the Register of Associations, unless the debts of the association have been established and bankruptcy proceedings have been initiated.
 
The liquidator submits to the competent administrative authority an application for the entry of dissolution of the association within eight days from the date of the decision of the assembly on the dissolution of the association, conducts liquidation proceedings within 60 days from the date of receipt of the decision of the competent administrative authority on opening the liquidation proceedings, establishes the balance of the business account of the association as well as the book value of debts and receivables, invites creditors to lodge claims and debtors to pay debts, distributes the remaining assets of the association in accordance with the Act, and notifies the competent court in order to initiate bankruptcy proceedings in case the assets of the association are not sufficient to meet its liabilities. After the distribution of the remaining assets, the liquidator is required to submit the final statement of accounts and the report on the conducted liquidation proceedings to the competent administrative authority within eight days from the day of the conclusion of the liquidation proceedings.
 

Liquidator responsible for the association

A liquidator is a natural or legal person appointed by the competent body of the association, who is then entered in the Register of Associations as a liquidator.

The liquidator does not have to be a member of the association.

The liquidator represents the association in the liquidation proceedings, and upon opening the liquidation proceedings, he or she is entered in the Register of Associations as a person authorised to represent the association until the conclusion of the liquidation proceedings and deletion of the association from the Register of Associations.
 

Summary dissolution proceedings

Summary proceedings for the purpose of dissolution of an association can be carried out in the following three cases:
  • when the assembly issues a decision on the dissolution of the association
  • when twice as much time has elapsed than is foreseen for holding regular meetings of the assembly without a meeting being held
  • when the number of members of the association falls below the number of founders required for the establishment of an association.

Liquidation proceedings are not conducted in summary proceedings, and members of the management (executive) body are jointly and severally liable for possible commitments of the association five years from the day of deletion of the association from the Register of Associations, on the basis of a statement made by the majority of members of the management (executive) body to the notary attesting to the fact that the association is no longer operating, that all commitments of the association have been met and that remaining assets have been distributed in accordance with the Act.

The association is then deleted from the Register of Associations, but the personal names, addresses of residence and personal identification numbers (OIB) of the members of the association who signed the statement remain in the Register, indicating their joint and several liability for any subsequently established commitments of the association.
 

Deletion from the Register of Non-Profit Organisations

An association is not required to report its dissolution to the Register of Non-Profit Organisations.
 
Non-profit organisations are deleted from the Register of Non-Profit Organisations by deleting them from the main register, and a notification thereof is submitted to the Ministry of Finance by the head of the relevant register ex officio no later than 30 days after the change took place.