When several individuals or companies agree on a joint project that has no single owner, two forms with open membership usually come under consideration: a cooperative and a civic association. Both allow members to join and leave without amending the founding document, and both are legal entities. There the similarity ends. They differ in the purpose for which the law intends them, in how demanding formation is, in capital and in what the members are entitled to. The wrong choice shows up later, when the project starts to earn money or when the first member leaves.
The decisive question: is the project to benefit its members?
A cooperative is intended for carrying on business or meeting the needs of its own members:
A cooperative is an association of an open number of persons established for the purpose of carrying on business or of meeting the economic, social or other needs of its members.
— Section 221(1) of Act No. 513/1991 Coll. (unofficial English translation)
A civic association starts from the opposite premise. The Act on Association of Citizens does not apply to association for the purpose of gainful activity (Section 1(3)(b) of Act No. 83/1990 Coll.), and if such a purpose is apparent from the statutes submitted, the registration authority will refuse registration (Section 8(1)(a)). If the project is therefore to bring the members profit, savings or another economic advantage from business activity, the natural form is a cooperative. If it concerns joint activity in sport, culture, education or the community, where profit is not the aim, a civic association is the better fit.
The main points compared
| Cooperative | Civic association | |
|---|---|---|
| Who forms it | at least five members, or at least two legal entities (Section 221(3) of the Commercial Code) | a preparatory committee of at least three citizens, one of them over 18 (Section 6(2) of Act No. 83/1990 Coll.) |
| Capital | registered capital of at least EUR 1,250 (Section 223(3) of the Commercial Code) | not required by law |
| Formation | a constituent meeting, the proceedings of which are certified in a notarial deed (Section 224 of the Commercial Code) | an application for registration with the statutes (Section 6 of Act No. 83/1990 Coll.) |
| Coming into existence | on entry in the Commercial Register (Section 225 of the Commercial Code) | on registration with the district office in the regional capital (Sections 6(1) and 7(1)) |
| Voting | one vote per member, unless the statutes provide otherwise (Section 240(1) of the Commercial Code) | as provided by the statutes (Sections 3(3) and 6(2)(d)) |
| Assets for members | share in the profit (Section 236 of the Commercial Code), settlement share on departure (Section 233 of the Commercial Code) | not regulated by law; the statutes decide |
| Records | the Commercial Register | the register of non-governmental non-profit organisations |
Capital and the cost of formation
A cooperative is more demanding. The statutes must set the registered capital at no less than the statutory amount, and at least half of it must be paid up before the application for registration is filed (Section 225 of the Commercial Code). On formation, the cooperative must create an indivisible fund of at least 10% of its registered capital (Section 235(1)). To that must be added the notary at the constituent meeting and the entry in the Commercial Register. We examine the procedure in the article on the constituent meeting of a cooperative.
A civic association needs no capital, and the law does not require a notary on formation. The decisive work lies in the statutes, which must state the name, registered office, objective of the association’s activities, its bodies, who acts on its behalf and the principles of its financial management (Section 6(2)). We describe the course of registration in the article on registering a civic association.
Decision-making and a member’s departure
In a cooperative the principle of equal votes applies, and the statutes may depart from it, though not in decisions on amalgamation, merger, division, other dissolution of the cooperative or a change of legal form, or on dissolution with liquidation (Section 240(1)). If members contribute markedly different sums and want that reflected in voting, it must be deliberately addressed in the statutes. A departing member’s entitlement to a settlement share arises directly from the Act (Section 233(1)); the statutes may regulate how it is calculated and when it falls due (Section 233(5)). On withdrawal, membership ends at the latest on the expiry of six months from written notice to the board of directors (Section 231(2)). More in our answer on the settlement share when a member leaves.
In a civic association anyone may freely withdraw (Section 3(1) of Act No. 83/1990 Coll.). The Act on Association of Citizens does not regulate the property settlement of a departing member, and everything depends on the statutes and the principles of financial management. The association’s assets belong to the association as a legal entity (Section 2(3)).
Liability and access to public funds
Members of a cooperative are not liable for its obligations, and the statutes may impose on them only a payment obligation towards the cooperative up to a specified amount (Section 222(2) of the Commercial Code); we set out the details in our answer on whether members of a cooperative are liable for its debts. The Act on Association of Citizens does not regulate members’ liability; the association acts as a separate legal entity.
Civic associations are entered in the register of non-governmental non-profit organisations (Section 2(2) of Act No. 346/2018 Coll.) and a public administration body may not provide them with public funds if the register lacks the basic particulars, including the statutory body (Section 6(1) of that Act). For a cooperative, the basic particulars, the statutory body and the ultimate beneficial owner are entered in the Commercial Register (Section 14 of Act No. 29/2026 Coll.).
How to decide
Four questions help. Do the members derive an economic benefit from the project? How many individuals or companies are forming it? Are they able to raise the registered capital? Do they expect to receive, on departure, a share of the value they created together? If the answer to the first and last questions is yes, the project points towards a cooperative. If it concerns non-profit joint activity without capital, a civic association will usually suffice. Where two entrepreneurs do not wish to create a new entity, a contract of association is also an option, which we discuss in our answer on two sole traders doing business together.
We will compare the options for your particular project as part of our choice of legal form service and prepare the chosen form on a turnkey basis, whether that means forming a cooperative or forming a civic association.
This article provides general legal information as at 12 September 2026. It does not constitute legal services or advice on your specific matter. Laws change and the details of your situation may differ. Check the appropriate course of action or contact us before making a decision.
