What Are Charities And Non-Governmental Organisations

posted by LawStrive

September 22, 2017

A charity or a charitable organization is a non-profit organization (NPO) with the sole objective of improving the social well-being of a particular area e.g. the prevention or relief of poverty; the advancement of education; the advancement of religion; the advancement of health or the saving of lives; the prevention or relief of sickness, disease or human suffering; the advancement of citizenship or community development; the advancement of amateur sport; the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity; the advancement of environmental protection or improvement etc.

A Non-Governmental Organization (NGO) is any non-profit voluntary organisation which is organized by people with a common interest independent of governments and international governmental organizations, although often funded by governments established to improve the lives of other people through humanitarian, educational, healthcare, public policy, social, human rights, environmental, and other activism and services.

In Nigeria, Charities and NGOs may be registered as a company limited by guarantee, as such if you intend to start a non-profit organisation or a non-governmental organisation you can register your organisation as a company limited by guarantee.

WHAT IS A COMPANY LIMITED BY GUARANTEE (GTE)?

A company limited by guarantee is a company formed to promote commerce, art, science, religion, sports, culture, education, research, charity or other similar objects.

A Company Limited by Guarantee has no share capital which means there are no shareholders, instead, you have members referred to as guarantors this means that the liability of the company’s members is limited to the amount the members undertake to contribute to the property of the company if it is wound up and under Company and allied matters act the amount shall not be less than ten thousand Naira. This way, members of the company are protected from any personal liability for the company's debts. Therefore, if a company is wound up and funding is needed to pay its debts, the members liable to the extent of their guarantee.

Also under a company limited by guarantee income and properties of the company are to be applied solely towards the promotion of its objects and no portion thereof is to be paid or transferred directly or indirectly to the members of the company.

STEPS TO REGISTER A COMPANY LIMITED BY GUARANTEE?

PRE-INCORPORATION STEPS

  1. Get a legal practitioner to advise you on proposed objectives of your organization
  2. Provide the necessary information on the objectives of the organization, and full particulars of the trustees or members
  1. The legal practioner should draft the Memorandum and Articles of A
  2. The legal practitioner is equally expected to prepare some forms e.g. CAC1.1, CAC 2.1 etc.
  3. Documents that will be required are; The notice of the address of the registered office of the company and the head office if different from the registered office; A statement in the prescribed form containing the list and particulars together with the consent of the persons who are to be the first directors of the company; A statement of the authorised share capital signed by at least one director; and Any other document required by the Commission to satisfy the requirements of any law relating to the formation of a company

INCORPORATION STEPS

  1. A formal letter of application.
  2. The original newspaper publications.
  3. 2 copies of applicant's constitution.
  4. Minutes of the meeting whereat the trustees were appointed and absent and showing the voting pattern, signed by Chairman and Secretary of the board
  5. Minutes of the meeting where special clause rules were adopted into the constitution of the organisation; signed by secretary and chairman.
  6. Trustees (Applicants) have to attach 2 passport sized photographs
  7. Trustees have to sign against their names on the application form (Encl. D) and furnish permanent residential addresses.
  8. Draft of 20,000 Naira in favour of CAC and made payable in Abuja.
  9. Two photocopies of the application form.
  10. Application form duly signed by secretary and chairman of the board.
  11. Trustees declaration forms duly signed by each trustee and deposed to at a high court of Justice in Nigeria.

Once all the steps have been duly complied with, a certificate of incorporation will be issued.

POST-INCORPORATION STATUTORY REGISTRATIONS

After compliance with CAC registration, the NGO may need to comply with other regulatory agencies that regulate the activities of such company, depending on the objectives of the company.

It should also be noted at this point that all these steps have various fees attached to them, to be paid both to the lawyer and to the commission. If you will like to register a company limited by guarantee, Contact LawStrive today.