New provisions in Associations Act from 1 September 2010

The Associations Act has been amended to better respond to the needs of different kinds of associations and to the requirements of modern civic and organizational activities. In particular, small associations will be taken into account more than before.

Distance participation in meetings possible

With the amended provisions, members of associations will be able to more easily partake in meetings, as distance participation at association meetings and meetings of delegates is now allowed. Current auditing by lay auditors is replaced by an inspection of operation. In addition, the duty of the Executive Board to attend to the operation of the association is further specified.

Distance participation requires amendment of rules

If an association wishes to implement distance participation, this must be provided for in the rules of the association. Therefore implementation requires a rule amendment. The association must be able to ensure that each member’s right to participate and the correctness of vote count can be established in a way that is comparable to that used in ordinary meetings.

In minor associations, inspection of operation replaces lay audit

An association need not amend its rules even though inspection of operation replaces lay audit. After the law amendment, the auditor and deputy auditor mentioned in the association’s rules are understood as operation inspectors, unless at least two of the following conditions are applicable for the association:

• the balance sheet total is in excess of 100,000 euros;
• turnover or comparable net sales are in excess of 200,000 euros; or
• the association has more than three employees on average.

If the association fulfils two of the conditions mentioned above, it must engage a KHT auditor or an HTM auditor. If the association does not have an authorised auditor referred to in the Auditing Act, it must engage an operation inspector, who must be a private individual. As to its contents, the inspection of operation corresponds with good lay auditing practice. The number of operation inspectors and their deputies, and their term of office, must be stated in the rules.

The Executive Board is responsible for the legality of accounts and the credibility of financial administration

In section 35 of the Associations Act, a new provision is added on the duty of the Executive Board to supervise that the association’s bookkeeping conforms to the law and that its asset management has been organized in a reliable way.
This new clarification does not cause any changes to the Executive Board’s present operation and accountability.

Further details:

• Legal advisor: tel +358 9 6939 5861
• Email: neuvonta.yhdistysasiat(at)prh.fi