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HOW TO SERIES: HOW TO REGISTER a NOT FOR PROFIT ORGANIZATION (NIGERIA), JULY 2020

HOW TO REGISTER A NOT FOR PROFIT ORGANIZATION IN NIGERIA

DEALHQ PARTNERS: HOW TO SERIES NIGERIA

HOW TO REGISTER A NOT FOR PROFIT ORGANIZATION IN NIGERIA

  1. A. What is a not for profit organization?
    Simply, a not for profit organization (NFP) is one that is set up to promote a charitable or other
    non – profit cause. It could be a social, cultural, educational, religious or other cause underlined
    primarily by impact.
  2. B. What are the possible options for registration of an NFP under Nigerian Law?
    Under Nigerian laws, a Not for profit organization can be registered as either of the following:

    1. Incorporated Trusteeship under Section 590 of CAMA (Companies and Allied Matters
      Act): This involves the selection of Trustees as legal representatives of a body or
      community of people bound together by religion, custom, kinship or nationality or a
      body of people established to achieve religious, educational, scientific, social,
      development, cultural or charitable purpose. The Trustees are given the status of a
      legal corporation and granted legal personality making them custodians of the rights,
      duties and responsibilities of the body, community or association (which could be a
      church, a social club or an educational institution). The trustees have fiduciary powers
      and duties of trustees under common law. The name of the NFP will typically read like
      “Incorporated Trustees of the Daily Progressive Association”
    2. Company Limited by Guarantee: Section 26 of CAMA provides for the registration of a
      category of companies referred to as limited by guarantee. This category of
      registration is suitable for a company set up to promote science, beauty, religion
      culture, education, research or charity. The income and property of such company can
      only be used towards the promotion of its objects, it is restricted from utilizing any
      part of its income or property for personal use of its members or stakeholders, it is also
      restricted from distributing profit. Like a typical Company, the Limited by Guarantee
      has its affairs led by its Board of Directors whilst the Company is owned by its
      shareholders whose liability are limited to the extent they have determined at
      inception (this means that the shareholders are responsible for the future debts or
      liabilities of the Company to the extent they pledged at the time of registration – this
      is usually quantified as a monetary limit )The name of the NFP will typically read like
      “Excel Educational Resources LTD.GTE”.
  3. C. Should I register my Not for Profit as an Incorporated Trusteeship or as a Company Limited by Guarantee?
    Either of the 2 processes will suffice. However entities who intend to be involved in some form
    of business seem to generally have a preference for being registered as a Company Limited by
    Guarantee as this is a more familiar arrangement in the business world – the company will be
    a legal entity, with a Board of Directors and can contract, sue or be sued in its name. The
    Incorporated Trusteeship on the other hand has its legal personality vested in its Trustees – it
    can only contract, sue and be sued in the joint name of its trustees.In the case of the Company Limited by guarantee there is a requirement to procure the prior
    consent of the Attorney General of the Federation (AGF), this makes the registration process
    slow and often cumbersome. Where time is of the essence, an incorporated Trusteeship is
    often a preferred choice.
  4. D. Is a Not for Profit Organization prohibited from doing business?
    It is an erroneous assumption that a not for profit must be an association or a social club that
    primarily does no business. An NFP can do business provided that the intent is to utilize any
    profit generated from its operations toward promoting its cause without distribution of such
    profit to members or stakeholders.
  5. E. What matters do I need to consider before commencing registration?
    Typically, the registration of an entity is undertaken by the Promoter(s). The promoter is any
    one or more individuals that have conceived the idea of setting up the organization. They will
    have to answer a number of preliminary questions which will help determine the structure and
    approach to registering the entity.
    i. What are the objectives, beliefs, mission, and purpose of the organization?
    ii. How the organization will be funded?
    iii. What will the organization be called? (it is advised that a minimum of 2 possible names be
    selected as approval of names is usually subject to availability the name will only be
    approved where it is not statutorily restricted or close enough to the name of an existing
    entity such that it may confuse the public)
    iv. Who will run the affairs of the organization?
    v. To what extent do the promoters or the organization’s leaders desire to be liable for the
    actions of the organization?
    vi. Does the organization intend to do business or distribute profit to its stakeholders?
  6. F. What documents are required for registering an Incorporated Trusteeship?
    i. Two printed copies of the Constitution;
    ii. Duly signed copies of the Minutes of the Meeting appointing the Trustees and authorizing the
    application;
    iii. Identity Cards and Passport Photographs of each Trustee;
    iv. Duly completed Form CAC/IT/1 (Application Form);
    (https://www.cac.gov.ng/wp-content/uploads/2019/12/cac_it_form_001-1.pdf)
    v. Duly completed CAC1.1 (Registration Form);
    (https://www.cac.gov.ng/wp-content/uploads/2019/12/CACform1.1.pdf)
  7. G. What documents are required for registering a Company Limited by Guarantee?
    i. Application Letter to the Registrar General of the Corporate Affairs Commission.
    ii. Memorandum and Articles of Association
    iii. Letter of Consent of Attorney General of the Federation (this can be procured by submission
    of an application letter and approval by the AGF)
    iv. Evidence of Payment of Stamp Duty Fee to the Federal Board of Inland Revenue.
    v. Evidence of Payment of Filing Fee, Consent Fee and the Name Search and Reservation Fees at
    the Corporate Affairs Commission
    vi. Notice of address of the registered office of the Company;
    vii. Identity Cards and Passport Photograph of the Directors;
    viii. Duly Completed Form CAC 1.1 (Registration Form)
    (https://www.cac.gov.ng/wp-content/uploads/2019/12/CACform1.1.pdf)
  8. H. What is the process of registering an incorporated trusteeship?
    1. Step 1: Name Selection, Availability Check and Reservation:
      The promoters of the Incorporated Trusteeship would choose a preferred name of and
      conduct an availability check on the CAC website. Where available same will be
      approved and reserved for the applicant for 60 days upon payment of the prescribed
      fees.
    2. Step 2: Collation of Application documents and information
      The Promoters will collate, fill and execute application documents for submission to
      the Corporate Affairs Commission.
    3. Step 3: Application and Submission to the CAC.
      The prescribed application fees will be paid to the Bank and the applica
    4. Step4: Publication of Notice of Intention to register
      Where the CAC is satisfied that the application requirements have been met, it shall
      advise the applicants to publish a notice of intention to register an Incorporated
      trusteeship in two daily newspapers. The purpose of this publication is to invite for
      objections from the members of the public on the registration of the body.
    5. Step 5: Transmission of File and Issuance of Certificate
      The application documents are transmitted to the office of the Registrar General of
      the CAC for Consent and approval. Upon approval, CAC will issue a Certificate of
      Incorporation.
  9. I. What is the process of registering a Company Limited by Guarantee?
    1. Step 1: Name Selection, Availability Check and Reservation:
      The Promoters of the Company would choose a preferred name and conduct an
      availability check on the CAC website (https://www.cac.gov.ng/) Where available same
      will be approved and reserved for the applicant for 60 days upon payment of the
      prescribed fees.2
    2. Step 2: Collation of Application documents and information
      The Promoters will collate, fill and execute application documents for submission to
      the Corporate Affairs Commission
    3. Step 3: Payment of Stamp Duties and Application Fees
      The payment of Stamp Duties is made to the Federal Board of Internal Revenue Service
      while the payment of application fees (which covers Consent, Name Search and
      Reservation and Filing fees) would be paid to the Bank.
    4. Step 4: Application and Submission to the CAC.
      The application documents together with evidence of payments will be submitted to
      the CAC.
    5. Step 5: Approval and Issuance of Certificate
      The application documents are transmitted to the office of the Attorney General of the
      Federation for Consent and approval. Upon approval, CAC will issue a Certificate of
      Incorporation.

HOW TO GET STARTED

Are you interested in setting up a not for profit organization in Nigeria? Our corporate services team
is available to provide registration and start up support to you. You may contact our team on:
Email: info@dealhqpartners.com Telephone: +234 1 4536427 or +234 9087107575

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