Overview of Non-profit Organization Registration
A non-profit organization (NPO) is an organization that operates for a social, educational, charitable, religious, or other purposes that is not intended to generate profits for its members or shareholders. Non-profit organizations are sometimes called not-for-profit organizations, non-governmental organizations (NGOs), or charities.
Non-profit organizations are typically structured as corporations or trusts and are required to register with the Corporate Affairs Commission (CAC). They are governed by a board of directors or trustees who are responsible for overseeing the organization's operations and ensuring that it remains true to its mission.
Many non-profit organizations rely on donations and grants to fund their activities and may be eligible for tax-exempt status, which allows them to receive tax-deductible donations.
SplashDict is equipped with accredited experts and the necessary resources to assist you to complete the Incorporation of a Private Company Limited By Guarantee (Ltd/Gte) and Incorporated Trustees in Nigeria.
Benefits of Registering a Non-Profit Organization
Registering a non-profit organization in Nigeria can provide several benefits. Here are some of the key benefits:
1
Legal status
Registering a non-profit organization with the Corporate Affairs Commission (CAC) provides the organization with legal status, making it easier to enter into contracts, own property, and carry out other legal activities.
2
Tax exemption
Non-profit organizations that are registered and approved in Nigeria may be eligible for tax-exempt status. This can result in significant savings on taxes and may make it easier to attract donations and funding.
3
Access to funding
Registered non-profit organizations in Nigeria may be eligible for grants and funding opportunities that are not available to unregistered organizations. This can help to support the organization's mission and programs.
4
Protection from Personal Liability.
You can buy, acquire and register your financial stakes and assets in the name of your NGO. This is a very smart way to protect yourself from unlimited liability for bankruptcy, foreclosure, judgment debt recovery, or divorce proceedings in the future.
5
Credibility
Being registered as a non-profit organization can enhance an organization's credibility and reputation, making it more attractive to donors, volunteers, and partners.
6
Own Properties in its Name
The NGO becomes entitled to buy land, own fixed assets, and incur liabilities under its common seal. It is illegal for an unregistered organization including an unregistered NGO to buy, hold or sell land anywhere in Nigeria.
7
Perpetual Succession
This means your NGO has an unlimited life span and will continue to exist even if the founder or trustees die or leave the NGO. An NGO's existence will only cease if it is formally wound up by the Order of the Court. Amongst other benefits, this allows your organization to outlive you and even generations to come.
8
Enhanced Corporate Image
The public will perceive your NGO as being more stable than an unregistered NGO. Political parties, government, donor agencies, financial institutions, charity organizations, and other NGOs will only want to partner with your NGO to further common objectives if your NGO is registered.
9
Access to credit
You can use a loan facility to finance a mortgage, purchase land or fixed assets, promote the activities of your NGO, or fund the NGO's operations. Banks will want to see proof that your NGO is registered with the CAC as a condition precedent to giving a loan.
10
Protect your Name
Once your NGO is registered, the name is protected. Nobody can use the same name or even a name that is similar to that of your NGO throughout Nigeria. This has the benefit of legally protecting your image and NGO name from unauthorized use.
11
Open a Business Bank account
Operating an NGO bank account is an important asset to your NGO because it is one of the clearest signs that you are transparent. You need to provide proof that your NGO is registered with the Corporate Affairs Commission to open a corporate bank account.
12
Improved governance
Registering a non-profit organization requires the establishment of a board of directors or trustees, which can help to improve governance and ensure that the organization is run in a transparent and accountable manner.
Choosing a Type of Nonprofit Organization
There are two types of non–profit organizations registrable in Nigeria: Incorporated Trustees and Company Limited by Guarantee. The choice of which type of organization to register depends on the goals and needs of the organization, as well as its structure and governance.
This is the most common type of non-profit organization in Nigeria. It is a legal entity that is created by a group of people who share a common goal or purpose. Incorporated Trustees are registered with the Corporate Affairs Commission (CAC) and must have a board of trustees who are responsible for governing the organization.
They include trade unions, community-based organizations, social clubs, religious organizations, cultural associations, women’s groups, youth clubs, professional associations, political parties, cooperative societies, specialized professionally run NGOs, and friendly societies.
Our service covers the entire process; this includes drafting all the relevant documentation, official filing fees, newspaper advertisements, and official seal.
This type of company is a non-profit organization, similar to an incorporated trustee, but it is registered as a company with the CAC.
Guarantee company entity is often used by charities, but not all companies limited by guarantee are charitable in nature. Other common uses for this type of company are membership organizations and clubs, including sports associations.
It has members instead of shareholders, and its activities are restricted to those that are set out in its memorandum and articles of association. The members of a company limited by guarantee are not liable for the company's debts, but they may be required to contribute to the company's assets if it is wound up.
Non-profit Organization Registration Packages
Upon completing the order, you’ll be redirected to submit your information to process your registration.
An incorporated trustee is a type of legal structure for non-profit organizations in Nigeria, where the trustees are registered as a separate legal entity from the organization.
A private company Limited by Guarantee is an alternative type of limited company used mainly for non-profit organizations such as Societies, associations, community projects, charities, etc.
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Frequently Asked Questions (FAQs)
You can find some of our most frequently asked questions below;
Incorporated trustee and private company limited by guarantee are two different legal structures that are commonly used by non-profit organizations. Here are some of the main differences between the two:
- Legal Structure: An incorporated trustee is a legal structure where the trustees are registered as a separate legal entity from the non-profit organization, while a private company limited by guarantee is a separate legal entity from its members.
- Members: An incorporated trustee may have only one member, while a private company limited by guarantee must have at least one member.
- Liability: In an incorporated trustee structure, the trustees are personally liable for the debts and liabilities of the organization, while in a private company limited by guarantee, the liability of the members is limited to the amount they have agreed to contribute to the organization in the event of its winding up.
- Governance: An incorporated trustee is governed by a board of trustees, while a private company limited by guarantee is governed by a board of directors.
- Purpose: An incorporated trustee is typically used for charitable purposes, while a private company limited by guarantee can be used for a wide range of non-profit purposes.
Overall, the choice between an incorporated trustee and a private company limited by guarantee depends on the specific needs and objectives of the non-profit organization.
A non-profit organization (NPO) is a legal entity that operates with the goal of serving the public good, rather than earning profits for owners or shareholders.
Registering your non-profit organization gives it legal recognition, which is important for credibility, funding, and tax-exempt status.
Yes, a non-profit organization can make a profit. However, the profit must be used to further the organization's charitable purpose, rather than distributed to owners or shareholders.
An incorporated trustee is a type of legal structure for non-profit organizations in Nigeria, where the trustees are registered as a separate legal entity from the organization.
- Only one person can register as an incorporated trustee. This is clear from the language of section 590(1) of CAMA as follows: “where one or more persons are appointed by….”
- The trustees are the only persons who obtain legal personality and not all the members.
- The name starts with the words “Incorporated Trustees of….”
- It does not do business and does not distribute profits.
- It receives income as grants, levies, etc
- The income must be applied solely towards the promotion of its objects
- The income not distributable but (out of pocket) expenses can be paid to members; especially for a member going to promote the organization.
- It may be dissolved by the Federal High Court upon Petition by the Governing Council; or one or more members of the body of trustee; or not less than 50% of total members of the association; or the CAC.
Again, Incorporated Trustees are usually Clubs, Associations of persons related by custom, tribe etc., Churches, Mosques, and Non-Governmental Organisations (NGOs).
To register an Incorporated Trustees in Nigeria, the following requirements must be met:
- Two proposed Names of the Association, Organisation, or body.
- The name, physical address, email address, phone number, and valid means of identification and passport photographs of each of the trustees.
- The address of the Organisation.
- The aims and objectives of the Organisation.
- Publication of Notices in three national dailies - To notify the public of the intention to register an Organisation; the name of the NGO, Trustees, aims and objectives, and calls for objections to its registration within 28 days of publication. (we'll provide this).
- Constitution of the Organization - Contains the rules that will guide the Organisation's internal affairs and operations. (we can provide this).
- Extract the minutes of the general meeting appointing trustees and adopting the special clause rules into the constitution (we can provide this).
- Extract of Minutes of Meeting for the adoption of the special clause into the constitution (we can provide this).
- The common seal - The impression of the common seal will be needed on the minutes, the application form, and some other documents. (we can provide this).
Where the above requirements have been complied with, the CAC shall within 5-8 weeks of the submission of the application register the Trustee and issue a digital certificate of incorporation stating the name, date, and registration number of the Incorporated Trustee.
Registration for Incorporated Trustee can only commence after twenty-eight (28) days from the date of newspaper publication. Afterward, registration will take about 5 – 10 days.
The first step is the name search which takes approximately 24 hours or less. The second step is newspaper publication. After the newspaper publication, trustees must wait for 28 days before taking any further steps.
At the expiration of the 28 days, we'll file all documents, and the application if not queried would be approved within a week or two.
This leads us to conclude that the total period to register a non-profit in Nigeria is approximately 5-8 weeks.
The following classifications shall apply to incorporated trustees;
1) Religious
2) Educational
3) Literary
4) Scientific
5) Social
6) Developmental
7) Cultural
8) Sporting
9) Charitable
10) Others.
Anyone can be appointed a trustee in so far as the person is not an infant or a person of unsound mind.
Also, an undischarged bankrupt can neither be a trustee nor can a person who has been convicted of fraud or dishonesty within the last five years before his proposed appointment.
Anyone who is appointed a trustee must give his consent otherwise his appointment would be invalid.
After the name and availability are conducted and a name has been approved and reserved, the trustees would then publicize their intention to register the NGO in two newspapers. One of the newspapers must be a newspaper that circulates nationwide while the other could be a local newspaper.
The reason for the newspaper publication is for public awareness of the intention to register the trustee and also for anyone who has an objection to notifying the CAC of such objections.
The newspaper publication would usually last for 28 days.
After the expiration of 28 days and if there are no objections, the organization can now be submitted for registration.
A company limited by guarantee is a type of legal structure for non-profit organizations in Nigeria, where the liability of members is limited to the amount they have agreed to contribute in the event of the company being wound up.
The profits earned by this sort of organization are reinvested for different purposes in the organization. This type of company has a different lawful identity; it is responsible for hiring human resources, borrowing credit, purchasing and selling property, and defending a lawsuit. This type of organization drafts a memorandum of association.
A company limited by guarantee is a type of legal structure that is commonly used by non-profit organizations. It is a separate legal entity from its members, with limited liability for members in the event of the company being wound up.
This type of company does not have share capital or shareholders but has members who act as guarantors and contribute a fixed amount to the company. Companies limited by guarantee are typically set up for non-profit purposes and must have at least one member who can also be the director.
They are required to have a memorandum and articles of association, which outline the objectives of the company and its internal rules and regulations.
Overall, a company limited by guarantee is a flexible and popular legal structure for non-profit organizations, providing limited liability to members and allowing the company to enter into contracts, own property, and conduct business in its own name.
To register a Company Limited by Guarantee in Nigeria, the following requirements must be met:
- Two proposed Names of the Guarantee company.
- The general nature of the business of the Guarantee company.
- The address of the Organisation.
- The name, physical address, email address, phone number, and valid means of identification and passport photographs of each of the members, directors, and secretary (if any).
- Constitution (Memorandum & Articles of Association) setting out the objects and by-laws. (We can provide this)
Where the above requirements have been complied with, the CAC shall within 40 days of the submission of the application register the Guarantee company and issue a digital certificate of incorporation stating the name, date, and registration number of the Ltd/Gte.
It usually takes 30-40 business days for the Company Limited by Guarantee (Ltd/Gte) Registration in Nigeria.
Name Search: 6 - 24 hours from submission.
Attorney General's consent: Within 30 days. Else, 3 Newspaper publications with no objection in 28 days.
Grant of Certificate of Registration: 15 - 50 Days from filing.
Total time: Approximately 20 - 60 days.
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