A Non – Governmental Organization (NGO) simply put means an organization that has no affiliation to the government and which exists to help those in need or provide educational, scientific, religious and artistic assistance to members of the public. Under Nigerian law, all charitable foundations are also classified as NGO.
They are not registered with the Corporate Affairs Commission (CAC) solely for the purpose of making profits but rather to better the lives of people and meet specific needs of the society. NGOs may be funded by the United Nations agencies, corporations or any individual donors, and the donations are used to support their costs and humanitarian activities of the organization.
Going by the provisions of the Companies and Allied Matters Act 1990 (CAMA), an NGO or Charitable foundation may be registered as a Company Limited by Guarantee or as an Incorporated Trustee. However, due to uneasy requirements of registering a company limited by guarantee in Nigeria, it is always preferable for any NGO or foundation to be registered as an Incorporated Trustee under the Part C of the CAMA
The procedure for how to register a charitable foundation in Nigeria is complex but surmountable. The steps for how to register an NGO are also the same for how to register an organization or any other charitable foundation in Nigeria.
The requirements for registering an NGO or foundation with the Corporate Affairs Commission (CAC) under PART C of CAMA can be summarized as follows:
Conduct availability check and reservation of name of the proposed NGO or Charitable organization. (Note: The proposed name of the organization can only be reserved for 60days before it reverts back for use by another person).
Obtaining a set of incorporation form from the CAC by the applicant, which shall include a Memorandum for the guidance of application.
Publications of notices of the registration of the proposed NGO or charitable foundation in 3 national newspapers in Nigeria, one of which must be a local paper, which is usually circulated in the area where the NGO will be located.
Submission of the duly completed application form to the CAC. Such application must be accompanied with the following documents or requirements:
REGISTRATION OF A CHARITABLE FOUNDATION BY A COMPANY
By virtue of section 38(2) CAMA, a company incorporated in Nigeria shall not make a donation to a political association or for a political purpose. However, a company is not restricted from making a donation to a charitable foundation. It, therefore, follows that a company, being a separate legal personality, can also form an NGO and make donations to it for only charitable purposes. Where a company has registered an NGO or charitable foundation, such company may include a clause in the constitution of the organization, which would empower the company only to appoint the trustees of the organization.
REGISTRATION OF A CHARITABLE FOUNDATION BY A FOREIGN PERSON OR ENTITY
Unlike a company registration, a foreign person or entity seeking to register a charitable foundation in Nigeria may need to satisfy some vital conditions or requirements to reigster such organization in Nigeria. The chief among the conditions is that every person registering a charitable organization in Nigeria must be resident in the country. Therefore, a foreign individual seeking to register an NGO or charitable foundation in Nigeria must first obtain the Combined Expatriate Residence Permit and Aliens Card (CERPAC) before commencing the registration of an NGO. The CERPAC is the resident permit every foreign individual must possess for being resident in Nigeria. A foreign company registering an NGO in Nigeria may nominate local trustees for such purpose. The company may also reserve the power to appoint additional trustees in future in the constitution of the organization in other to be able to effectively monitor and control the activities of such organization.
In conclusion, it is worthy of note that due to the charitable purpose of NGO or foundation, some incentives are statutorily accrued to such organization.
First, tax incentives are granted to NGOs in form of exemption from most forms of taxes i.e. no tax may be levied on any money paid to an NGO such as donations, aids and grants. NGOs are also exempt from payment of import duty on certain goods meant for charitable or humanitarian purposes as approved by the Minister of Finance.
Second, registration of an NGO or charitable foundation establishes a trust between the public and the organizations, which encourages the public to support the cause of the NGO through donations, foreign aid and grants.
The cost of registering an NGO or charitable foundation in Nigeria will be differed on a case by case basis and the roles of any lawyers assisting to incorporate such organization would take in completing the entire process. A prospective registrant may contact a lawyer for a cost’s advice.
Above all, the process for registration of NGO or charitable foundation is tedious, and engaging the services of an expert for such incorporation is most advised.
Written by Corporate & Commercial Law Department at Resolution Law Firm, Nigeria