What is an association agreement and when to use it

An association agreement is a contract where two or more persons agree to work together toward a common goal by sharing their resources (money, work, property), without creating a company or legal entity.

Common use cases:

• joint project between freelancers

• building a house together

• launching a pop-up event or shared e-shop

• short-term cooperation without registration

Legal framework

Regulated by Sections 2716–2746 of the Czech Civil Code.
No legal entity is created – all rights and obligations remain between the parties.

Key elements of the agreement

• Identification of parties

• Defined common purpose

• Contributions and roles

• Rules of decision-making

• Profit/loss sharing

• Duration and termination

• Exit rules

• Signatures

Common mistakes

• No clear goal or scope

• No leadership or rules for decision-making

• No clarity about asset ownership after termination

• Tax and liability risks from disguised business

• Acting on behalf of others without agreement

Recommendations

• Be specific about what you do and why

• Define decision-making and responsibilities

• Prepare a plan for ending the cooperation

• Avoid using this form for long-term business

Practice tip

The association form is great for short-term cooperation, but unsuitable for running a business in the long term.
It’s not a substitute for a company.

Association contract template – available for a symbolic fee

I offer a Czech-English association agreement template.

Suitable for freelancers, entrepreneurs or creative teams.

Reach out via e-mail or form – quick and practical solution.

FINAL THOUGHTS – WHAT NOW?

An association agreement isn’t just a formality – it’s a legal shield, if drafted properly. And a trap, if not.

Do you want to be sure your contract will hold up even in a crisis? Get in touch and let’s schedule a meeting. I am a specialist on contract law – more information here.