Your financial rights and obligations as an association
Before you know how to manage your budget, you need to know the rules. You shouldn't think that opening an association under the 1901 law gives you all the rights, and that every aspect is simplified. There are, after all, a few things you need to respect, especially when it comes to finance. As we have already stated, an association is not supposed to generate profits and must be non-profit-making, just as its president is not supposed to receive a salary (only part of the SMIC, and subject to certain conditions).
Nevertheless, yes, a not-for-profit association can run a commercial business, whether on a regular or occasional basis. But this can have tax consequences. We'd like to make this point clear, because you're likely to have income from different sources within the same activity. So it's important to be aware of what you can and can't do... Remember, we only want you to be happy... and to stay out of trouble!
Action lucrative
As the French government specifies on its official website, the work of an association must be
disinterested and not profit-driven. As a result, an association governed by the French law of 1901 is not, in principle, subject to the taxes payable by persons carrying on a commercial activity (notably VAT, corporation tax and the territorial economic contribution, as you will be if you have chosen this legal identity)".
If, as an association, you wish to carry out a profit-making activity, you may still be exempt from so-called commercial taxes if you meet all the following conditions:
- Disinterested management
- Commercial activities without private-sector competition
- This profit-making activity represents a marginal share of the association's budget, and its non-profit-making activity remains the mainstay.
Certain organizations, particularly in the cultural or sporting sectors, can organize up to six events (concerts, shows, exhibitions, tombolas, sporting events, etc.) in support of their activities, and therefore not for profit. This means that the proceeds from these events are not subject to commercial taxes, whatever the amount.
However, if income from profit-making activities (with the exception of
charity events) represents a significant proportion of the association's resources, it is subject to declaration and taxation from the first euro. The good news, however, is that if income from profit-making activities is marginal in the association's budget, it is subject to declaration and taxation in excess of €72,000.
However, if the association's revenue from the sale of goods or services exceeds this amount per year, it must notify the tax office responsible for its head office. And it must file the same declarations as companies (with the same accounting requirements).
Think of all the legal details
In addition, an association that receives more than €153,000 in donations or subsidies per year must appoint a statutory auditor. It must also publish its accounts in the "Associations" section of the "journal-officiel.gouv.fr" website. This publication is free of charge and can be done online. We advise you to contact the SIE to which you are affiliated.
We therefore advise and remind you to include all the activities you plan to develop in your articles of association. Failure to do so could result in the association being subject to criminal sanctions for para-commercialism or abuse of a dominant position (prices too high). So don't play with fire! Whether you're a company or an association, we advise you to draw up a provisional budget in order to foresee and visualize the expenses you'll need to cover through your activity.
And consequently, know how much revenue you'll need to achieve the perfect balance. On the plus side, you'll be in no doubt when it comes to applying for subsidies (great!). For the company, draw up a business plan in which you can forecast your expenses (both fixed and tax-based) as well as your desired profits. Be sure to check with your accountant or SIE when your VAT will be deducted, so as not to get into trouble. Note: your VAT in this sector of activity will be 20%.
You can find a wealth of information on Associathèque.fr, or contact Viviarto , a specialist in the management of associations and cultural societies, a real resource for you.
The different ways to manage your budget
As you'll see, there are a number of ways you can raise revenue within your structure, to bring your school - in part - to life. Here's how:
Student memberships
You can simply rely on your students' memberships as a source of income. It's up to you to decide how high you want to set the membership fee, which is usually annual. Don't hesitate to define the dates of validity in your by-laws.
Selling your courses
Beforehand, you'll need to draw up a price list based on the packages you'd like to offer. Viviarto can offer you many solutions in this respect.
Renting your premises
Secondly, you can expand your field of activity to better manage your budget while remaining true to your line of business, in particular by renting out your premises if you own them or if your lease allows you to sublet them. In this way, you can allow other artists to come and rehearse, create or give classes, and why not offer them a preferential rate. In this way, you can optimize your premises and develop your network... essential in this not-so-big business! You can also rent out your studios for children's birthday dances, or for training...
Collecting donations
Donations are another option. As an association, it is perfectly possible to collect donations. Donations must be made free of charge, with no direct or indirect benefit to the donor. So don't hesitate to find out how to obtain a tax receipt for donations made by companies or individuals (impots.gouv).
End-of-year show
Of course, you've been waiting for it: the organization of your end-of-year show is an important part of the revenue you'll be able to collect. We advise you to draw up a special back-plan for the show (to plan the rental of the venue, the truck, meetings with your team, etc.) and a provisional budget to manage your expenses and therefore your budget (rental, sacem, technicians, etc.) and your income (refreshment bar, DVD sales, etc.).
To help you manage your association's schedule, take advantage of a free trial of our scheduling software.
Offering internships
As part of your ongoing efforts to promote and disseminate your activity, you can organize training courses. These courses also enable your members to meet other professionals in the field. You can also broaden your membership base by opening these courses to the public. A great business card for you, a dynamic school!
Thinking of the municipality
Alternatively, you may want to reach out to new audiences outside your structure. We advise you to get in touch with your municipality and the schools close to your structure. In this way, you may be able to promote an artistic practice to young children and raise the profile of your school, while at the same time raising revenue through the subsidy you'll receive for this. You can also use and optimize your time during the day, if your classes are in the evening. This is just an example, but there are plenty of other possibilities, depending on your affinities (hospitals, nursing homes, works councils...). Spreading the word about art, well-being or sport is essential, and you're the best ambassador you can be.
Derivative products
The sale of by-products or services is entirely possible, but even if it's a bit of a hassle, be careful not to exceed certain limits, so you can manage your budget and avoid unnecessary expenses. You could end up paying taxes. Calculate your costs carefully!
Training courses
We'll finish with the training activity. In fact, training can be part of your business. However, it is not aimed at amateurs, but at people wishing to become more professional. The training activity can be exempt from VAT if you so request. However, you'll need to apply to LA DIRECCTE in your region for a trainer's number. The training business is highly regulated - find out more!
Tools to manage your revenue collection
We've given you a lot of information and we hope you don't have too much of a headache
! Cheer up, it's almost over for today. Collecting recipes is great! But how do you store, analyze and manage the information?
Once again, there are many tools available to help you in different ways. There are free tables on the Internet for managing association income/expenses/managing the budget via Excel. They can help you keep track of your association's accounts. Obligatory follow-up! You'll need to keep a record of all financial inflows and outflows, month by month, to keep track of all movements. This will produce a monthly cash balance, which must correspond to the bank account balance (association bank account mandatory). Movements noted on the income/expense table must be justified and correspond to an accounting document (an invoice, proof of cash deposit, etc.). In the event of an audit, it must be easy to trace the origin of the movement.
You can also count on Viviarto. This platform will help you with various aspects
concerning revenue collection and budget management in your association. First and foremost, it will enable you to collect them dematerialized, with different payment options online or on site for your members: SEPA direct debits, CB, cheques, ANCV cheques. This magical tool not only enables you to sell your courses year-round, but also supports you in your development. In fact, it will help you set up individual courses, workshops and festivals. They'll support you in all your projects, and above all from a single tool: a real time-saver! Finally, Viviarto lets you see at a glance all the money you've earned through member registrations. You'll have access to a real tracking table with options for payments, timeframes and packages.
Find out how Viviarto can help you manage your association's budget.
