A non-profit association is always open to new members who share the aims of the association. These new members do not need to make any capital contribution. On the other hand, payment of a membership fee is commonplace.

What is a non-profit association?

A non-profit motive may be to promote the rights or interests of members, or a public interest, like combating poverty. Examples include sports clubs and trade unions.

Formed by at least three people

A non-profit association must be formed by at least three persons determining its aims and name. If you want to register an association, you must write its Articles of Association and appoint a Board. You must also register your association with the Swedish Tax Agency (Skatteverket).

Non-profit associations at the Swedish Tax Agency

Associations that want to operate a business

A rule of thumb is that a non-profit association cannot operate a business from which its members profit financially. But the association can operate a business if the money, for example, goes back to sports activities that is available to young people in the city or town.

Non-profit associations that own companies

In some cases, it might be more appropriate for a non-profit association to run part of its activities in the form of a company, to separate its non-profit-making activities from its commercial activities. This is quite common in elite sports. But it might also be appropriate for a rural community association that wants to operate a tourist activity/business hotel/shops or some similar kind of enterprise to support the development of the local village.

Public utility non-profit organisations

Public utility non-profit associations are not, unlike other associations, taxed for a portion of their income if they fulfil the requirements in the tax regulations concerning their:

• aims
• open membership
• use of funds in their public utility activities.

This also applies to income from business activities (operating income) which:

• primarily comes from an activity that is integral to furthering the organisation’s public utility activities
• has some other natural connection to the association’s public utility activities
• through long-established practice, has been utilised as a source of funding for non-profit-making (public utility) activities.

What is a public utility activity?

A public utility activity means an activity that the community at large perceives as something worth supporting. Examples can include charities, cultural activities, sport, courses and youth activities.

Public utility non-profit associations at the Swedish Tax Agency