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Not-for-profit organisation (NPO) structure
Quares is convinced of the need to extend an organisational structure in order to give shape to park management. The organisational structure is needed to structure decision-making processes, to simplify operations and to guarantee continuity. Quares already has the experience needed to set up such organisational structures for park management. Quares has set up NPOs including the following, for example:
- NPO Kamp-Oost Brasschaat together with the municipality of Brasschaat and the companies already present.
- NPO Het Nest together with the private developer Ghent Industrial Investment (G2i)
- NPO Cargovil together with the Provincial Development Company (POM) Vlaams-Brabant.
Quares is also currently working together with BECO on writing two manuals on sustainable business park management. The first manual concerns the establishment of a not-for-profit association in the context of sustainable business site management. The second is about how to generate income with the NPO in order to guarantee continuity in the future.
Quares has made a conscious choice for the NPO structure because in practice sustainable business park management initiatives often fail owing to a lack of legal foundation. This organisational structure gives the companies the clarity and certainty they need. After all, structuring sustainable business park management based on an NPO carries various advantages.
Regarding the organisation itself, the NPO offers the benefit of:
- Legal personality. This means that as members of the NPO the companies are no longer liable for the NPO’s activities. This limitation of liability applies provided that the NPO is properly managed and no fraud is committed. As a legal person the NPO is able to conclude contracts, own property, recruit personnel, etc.
- The NPO’s capital is separate from that of the members. It follows from the legal personality aspect that creditors cannot call on the capital of the NPO’s members if the NPO is no longer able to meet its commitments.
- Fast decisions and implementation. Bodies such as the general meeting of shareholders and the supervisory board with the respective authorisation mean that the NPO is able to quickly take and implement decisions. As park manager Quares will formulate proposals but the final decision is made by the NPO, i.e. by the companies it comprises.
- Budget set in advance. The NPO has to draw up a budget prior to the commencement of the year of operation. This budget covers costs and income. The budget requires the approval of the NPO’s general meeting. The budget thus determines the park manager’s operational framework, thus removing the possibility of unpleasant surprises.
- VAT deductibility. As a legal person the NPO is able to apply for a VAT number. That makes it possible for the NPO to deduct the VAT for a number of activities.
Regarding the company structure, the NPO offers the benefit of:
- No capital contribution. Unlike the law governing companies, an NPO does not have a minimum fully subscribed capital requirement.
- Fast entry and exit. The companies in the NPO are not bound to a capital contribution or shareholder structure. This makes it easy for companies to join the NPO. For the same reason the company is also able to quickly leave the NPO.
- Equal voting rights: in a company structure share ratios, multiple voting rights and capital rights can create unequal relationships between various shareholders. In the NPO, however, there are usually equal voting rights for all members of the general meeting.
- No capital rights for the members. The absence of capital rights in the NPO implies that companies are unable to lay claim to its assets. Reserves can only be used for the non-profit purpose for which the NPO was established. Neither are companies able to claim the NPOs assets upon its dissolution/liquidation. Unlike the case with a company, the assets of an NPO can never flow back to its members.
- Legal entity tax rather than corporation tax. The NPO generally comes under legal entity tax. That means that the NPO is only taxed on immoveable and moveable property and miscellaneous income, but not on its results as is the case with a company. Despite that the NPO will have to take care to ensure that commercial activities remain subordinate to the NPOs social purpose. Otherwise the VAT authorities may rule after all that corporate tax is payable.