Details

Parent Category: News Archives

Created on Tuesday, 06 April 2010 16:57

Last Updated on Friday, 23 October 2015 09:51

Club's President Liable in Spite of Exoneration?

As usual during an annual general assembly of any association the board is audited and exonerated from any mistakes. But is this still true when afterwards inconsistencies are discovered that might deprive the organization of its charitable status? The Brandenburg OLG made a decision in this issue on May 28, 2008 (re 7 U 178/07).

[PPD_PAYTOREADMORE]

As the club was audited by its tax office for the years 2001 - 2005, significant discrepancies were exposed. Receipts and records for over € 14,500 were missing. This association then sued the former president and treasurer to be reimbursed for the missing € 14,500, to have the accounting records be handed over, and to have it ascertained that the former president and treasurer be held responsible for the case that the charitable status be disenfranchised.

Generally, the club is entitled to damages pursuant §280 I BGB i.c.w. §§26, 27 III BGB because the board acted contrary to its duties. The Federal Court of Justice has laid down that the same principles for a Geschäftsführer (managing director) of a GmbH also apply to associations. The club has to prove that damage occurred and it's the board's fault. However, liability might be excluded because the board has been audited and found to have done everything right. Generally, the board is then really exempt from any liability except for such wrong-doings that were or could have been known based on the statement of accounts of the cash auditor. In the original case, the former president was held liable.