Udruga or union is a group of individuals who enter into an agreement, usually as volunteers, to form a body (or organization) to accomplish a non-profit purpose. Common examples include trade associations, trade unions, professional associations, schools (outside the public system) and environmental groups.
How to Open an Udruga in Croatia
A union must be founded by at least 3 founders (members).
First, you have to choose the name of the union. When selecting a name, it’s necessary to check if there is an union with the same name. You may browse existing businesses on the portal Uprava.hr.
Once the name of the union is selected, the next step is to create a statute. The Statute represents the basic general act of the union.
After drafting of the statute, the founding assembly is organized, followed by the registration of the union with the State Administration.
Required documentation for registration of an udruga includes:
- Record of work and decisions of the founding assembly
- Decision to initiate the procedure for registration in the register of unions
- Statute (2 copies)
- List of founders
- Extract from the court register for the founder of the union
- Approval of the competent state administration body for carrying out certain activities
- Copy of personal ID
- 70 kn of tax stamps.
All documentation must be verified by the representing person, most often the president of the organization. The prepared documentation must be submitted to the booth at the State Administration Office at the regional self-government unit in your area for registration in the union register.
Within 30 days, you will receive a decision on registering the union in the registry. If there is an error with the application or a particular document is missing, the person responsible for your application will contact you. You can pick up your certified copy of the statute and an OIB number with the enrollment documents at the State Administration Office.
Make multiple copies of the enrollment document once received. You should always have one safe filed away and at least one copy to submit with your ID number request. To create a stamp, a copy of the document on registration in the union register and a copy of the statutory page where the description of the stamp will be needed.
Once the stamp is created, submit a request to the National Bureau of Statistics. Within 15 days of receiving the decision on entry into the register, each person must apply to the Central Bureau of Statistics for the purpose of determining the registration number according to the National Classification of Activities. An ID number request is accompanied by a copy of the registration decision and a copy of the receipt of the fee in the amount of 55 kn.
Once the ID number is obtained from the Bureau of Statistics, you can open a bank account. If you plan to have a lot of transactions over the month, it is recommended to use Internet banking as it will save time and cost.
All newly founded unions, regardless of the amount of revenue, are obliged to conduct double-entry bookkeeping and submit financial reports to the State Audit Office for at least the first 3 years of operation. Therefore, it is recommended to have an accounting service or a person who can manage your accounting.
Note: Private companies often send scam emails to young entrepreneurs and currently open businesses, so be aware. Read received e-mails carefully and pay only the fees that must be paid to the state.
How to Close an Udruga in Croatia
An udruga may be closed in a few different ways. If certain criteria are met, you may qualify to close the udruga using the shortened procedure.
The shortened procedure for the termination of an udruga can be carried out in three cases:
- When the union board decides on the termination of its existence
- When a regular session of the board was not held for twice as long as the time foreseen to do it
- When the number of members of the union falls below the number of founders needed to establish the union.
In the shortened procedure, no liquidation proceedings are conducted, and the members of the administrative (executive) body are jointly accountable for the possible obligations of the union in five years following the date of deletion from the register. This is based on a statement issued by the majority of members to the public notary that all obligations of the union are met and that the assets of the association are distributed according to the law.
The person authorized to represent the union must apply to the competent state administration office for the termination of the union. Changes in the register of unions are made after the application has been approved.
The union is removed from the register of unions, but the register keeps the personal names, residence, OIB numbers of the body of the association who have signed the declaration, with the indication of their responsibility for any subsequent obligations of the union.
Please note: Information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. Croatian laws and bureaucratic rules often change, and each personal case is individual, so different rules may apply. For legal advice, contact us to consult with a licensed Croatian lawyer. For financial advice, contact us to consult with a licensed Croatian tax advisor or accountant.