Revocation of the corporate status of the association Scientology Neue Bruecke. The Federal Administrative Court has remanded the case to the State Court of Appeal in Mannheim.

The government of Stuttgart had revoked the corporate status of the association Scientology Neue Bruecke of the Church of Scientology in Stuttgart on the grounds that, contrary to the text of the statutes, the association did not pursue solely idealistic purposes but operated as a commercial undertaking.

The suit filed against this decree was dismissed by the Administrative Court in Stuttgart. The State Administrative Court in Mannheim [the Appeals Court] canceled the decree. It basically reasoned that the plaintiff association's involvement in commercial activities did not justify revoking its association status, if the association was a religious community. Following the appeal of the State of Baden-Wuerttemberg and the representative of the Federal State Attorney's Office, the Federal Administrative Court remanded the case to the State Administrative Court.

Pursuant to the regulations of the Civil Code, the legal form of Registered Association is available only to associations which do not pursue exclusively commercial purposes (Idealistic Associations). Associations engaged in business are obliged to use the corporate forms of the trade law (such as Limited Liability Company, Shareholder Company) , or may be recognized by the state, provided they fulfill certain strict requirements. In the interests of legal and commercial interrelations -- especially to protect the customer -- these regulations are intended to prevent associations engaged in business from escaping the trade laws on minimum share capital, balance sheet and accounting requirements and accountability. Pursuant to Art. 43.2 of the Civil Code, if a Registered Association is, indeed, acting as an employer, the competent administrative authority can revoke the corporate status.

According to the jurisprudence of the Federal Constitutional Court, the activities of an association have to be considered as commercial if they are planned and permanent commercial activities; are directed outside the association (i.e. beyond the internal sphere of the association); and are intended to materially benefit either the association or its members. Provided the activities are aligned with and subsidiary to the idealistic, main purpose and are a means to accomplish it (the so-called "subsidiary-purpose privilege'), an Idealistic Association does not become a business enterprise if it is commercially active in order to accomplish its idealistic purposes. In the instant case, it had to be adjudicated how these principles were to be applied to an association which, according to its statutes, regards itself as a religious community providing, as a basis of operation, services for payment.

The Federal Constitutional Court has ruled that an association does not become a business by offering services which accomplish the purpose of membership and which, in the absence of such membership, cannot be provided by others. Because in such a case one is not dealing with a business enterprise. And this is the case here because auditing, per the statutes, is understood as "spiritual counseling', and the seminars and courses intended "to achieve a higher level of existence" are based on the commonly held convictions of members, without which they would have no value for the recipients. The law does not mandate that the convictions which form the members into a community and give the association its special character have to be religious in nature.

Given such circumstances, it is of no importance whether the plaintiff competes with others in an "ideological market". Furthermore, it is irrelevant that the plaintiff's main sources of income are not membership contributions but payments for specific services. Even if, as the defendant claims, members are personally and financially endangered due to their membership of the plaintiff, the association status cannot then be revoked on the grounds that the association is in fact a business enterprise. Whether the alleged dangers can be dealt with using other means available to the state is not an issue in this case.

The Federal Administrative Court did not determine whether the requirements needed for such measures are fulfilled with regard to the disputed decree, as the Court has a different understanding of the law [to the defendant's].

Selling publications and, inter alia, offering introductory courses for a fee to non-members may be regarded as a business enterprise of the plaintiff, provided such activities do not fall under the subsidiary-purpose privilege. In this respect, however, no pertinent facts exist so far to determine whether the activities of its members and other organizations of the Church of Scientology are attributable to the plaintiff.

For further clarification of the merits the Federal Administrative Court has remanded the case to the State Administrative Court.

Federal Administrative Court I C 18.95 - Judgment of November 6, 1997