info@amlawkenya.com
0721124 900

How to Start a Non-profit organization in Kenya

Have you ever thought of how to start a Not-for-profit organization in Kenya? This is a term that covers independent organizations whose reason for existence is something other than to make private profit for its owners or members.

The most common types include Non-Governmental Organizations, Companies Limited by Guarantee, Societies, and Trusts.

Non-Governmental Organizations (NGOs)

An NGO is a group of individuals or associations with voluntary membership, is non-partisan, and does not generate profit in the commercial sense of the word. NGOs can be local or international, and must have a specific charitable object that it engages in. It can be economic, environmental, sociocultural, political rights or other public interest areas, as long as there is no direct benefit to its members. Registration is a prerequisite for operating in Kenya.

NGOs can apply for income tax exemption on income received from membership subscriptions and any donations or grants; preferential treatment for value-added tax (VAT) and an exemption on customs duties in relation to imported goods or services that are used to further their public benefit purposes.

Companies Limited by Guarantee (CLGs)

Companies limited by guarantee are similar to LLCs, but they are registered without a share capital. Instead, its members’ liability is limited to an amount specified in its articles. This amount represents what each member guarantees to contribute to the assets of a company in the even of winding up in order to settle its debts.

There is a prescribed return that such companies have to make every year to the Registrar of Companies. Any person can be a director whether or not they are a Kenyan citizen. However, the company must have at least one director who is a natural person or a corporation sole.

Trusts

A trust is a legal entity registered under the Trustees (Perpetual Succession) Act. They are usually established for purposes such as: religious, educational, literary, scientific, social services or charitable purpose.

The process of registration of an incorporated trust involves the trustees entering into a trust deed which is registered under the Registry of Documents. The Trust Deed together with other relevant documents are then presented to the Cabinet Secretary for Lands together with the prescribed forms for incorporation under the Ministry of Lands. This allows the Trust to be able to hold land in its own name.

Societies

Societies are also not-for-profit organizations. A society is “any club, company, partnership or other association of ten or more persons, whatever its nature or object, established in Kenya or having its headquarters or chief place of business in Kenya.” Societies are registered with the Registrar of Societies by presenting a Constitution in the required form; and signed by all the members. Societies have to make annual returns to the Registrar in the prescribed form. They also can apply for tax exemption by presenting the required documents to the Kenya Revenue Authority.

-End-

For more information, reach us at alice@amlawkenya.com or call us on 0721/0782 124 900.

Comments are closed.