What is a Non Profit Organisation?
The Non Profit Organisations Act 71 of 1997 states that a Non profit Organisation is ‘a trust, company or other association of persons –
- established for a public purpose; and
- the income and property of which are not distributable to its members or office-bearers except as reasonable compensation for services rendered.
Non Profit Organisations include trusts, companies or other associations of persons established for a public purpose.
Forms of Non profit Organisations
Non-Governmental Organisations (NGO)
Non-governmental organizations (NGOs) are corporations that are legally constituted by natural or legal ‘people’ (such as an incorporated company). An NGO runs independently from any form of government, even if funded by a government.
NGO are not customarily for-profit businesses. The organisation’s goals are to address social and political dynamics that affect the society negatively.
Community Based Organisations
It is an organising aimed at making desired improvements to a community’s social health, well-being, and overall functioning. For example, neighbourhood associations and sports club.
Faith Based Organisations.
It is an organisation whose values are based on faith and/or beliefs, which has a mission based on social values of the particular faith, and which most often draws its activists (leaders, staff, volunteers) from a particular faith group.
How do you register an Non profit Organisations?
Submit the completed application form at your nearest provincial social development office, together with two copies of the organisation’s founding documents:
- Trust – Deeds of trust and letter of authorisation from the courts
- Non Profit Company (NPC) is established and incorporated in terms of the Companies Act No. 71 of 2008.It is registered with the Companies and Intellectual Property Commission (CIPC) and requires memorandum of incorporation.
- Voluntary Association (It is an organisation established in terms of Common Law) – It requires an agreement in the form of written or unwritten constitution between three or more people.
- The founding documents of the NPO must meet the provisions of Section 12 (A-O) of the Nonprofit Organisations Act, 1997 (Act 71 of 1997).
- Organisational name
- Organisations type – Voluntary Association, Trust or Non Profit Company
- Contact personal details and of the 3 office bearers directors of the non profit organisation
Benefits of registering an Non Profit Organisation?
- improves your credibility and funding opportunities.
- allows your organisation to open a bank account
- helps your organisation with tax incentive.
Once your application has been received, the department will send you an acknowledgement letter. A registration certificate will be issued if your application meets the requirements of the Non-profit Organisations Act, 1997.
Once it is registered, you must submit the organisation’s annual report nine months after its financial year-end. The annual report should consist of a narrative report and a financial report.
How long does it take to be processed?
It may take approximately two months to process the entire registration.
Best practice will be to incorporate a non profit company and then register non profit organisation to give the charitable organisation the best possible credibility, which will result in more donations and ultimately furthering the charitable objectives of the organisation.