Registration of a Non-Governmental Organization in Kenya

Non-Governmental Organizations (NGO’s) play a vital role in Kenya's socio-economic and developmental landscape. These organizations, driven by a commitment to social change and community development, carry out a wide range of activities, from education, addressing healthcare disparities to advocating for environmental sustainability.

Introduction

In compliance with Section 12 of the Non-Governmental Organizations Co-ordination Act, the credibility and transparency of NGOs hinge on their formal registration with the relevant regulatory bodies. This article explores the essential phases of NGO registration in Kenya and the significance of the process in fostering transparency, governance, and compliance with local laws.

The importance of registering an NGO in Kenya

A registered NGO is a body corporate with perpetual succession. This isolates the organization's obligations from those of its founders or members. This division ensures that in the event that the organisation incurs debts or faces legal issues, the personal assets of the members shall not be used to recover the organisations debts.

Registration strengthens the organization's legitimacy and credibility and gives it a unique legal identity that makes it possible to own property, sign contracts, and carry out other activities as an acknowledged organization.

Registered NGO’s may be qualified for various tax exemptions and benefits, including exemptions from: -

Income tax - Donations received by NGOs do to qualify as income subject to tax, however where an NGO engages in an income generating activity, such incomes are subject to tax unless they have applied for income tax exemption and have been granted an exemption certificate.
Import duties on specific goods - The VAT Act provides for zero rating of goods and services imported or supplied to donor agencies, international and regional organizations with diplomatic accreditation, bilateral or multi-lateral agreements with Kenya for their official use.
Value-added tax (VAT) - The VAT Act 2013 (VAT Act) provides for VAT exemption on the supply of social welfare services provided by charitable organisations. A VAT exemption application needs to be lodged with Kenya Revenue Authority and it only applies to organisations which are either registered under the NGO Coordination Act or the Societies Act (or exempted from registration under either Act).

Registration also provides opportunities for alliances and joint ventures with other organizations, both domestically and abroad as registration ensures legal compliance and accountability, making government agencies, corporations, and other non-governmental organizations willing to collaborate. This increases the chances of getting government grants, funding from donors, and other resources that can help the organisation carry out its programs successfully.

Moreover, registration ensures that NGOs operate within legal boundaries, thereby promoting transparency, accountability, and ethical conduct.

Registration Procedure for an NGO in Kenya

An NGO can either register as an International NGO meaning incorporation in one or more countries other than Kenya, but operating within Kenya under a certificate of registration, or a National NGO which is registered exclusively in Kenya.

Registering an NGO in Kenya is a structured process that involves several crucial steps. The procedure is overseen by the Non-Governmental Organizations Coordination Board (NGO Board) to ensure transparency and compliance with regulatory requirements. The following is an overview of the typical registration procedure:

Pre-Registration Requirements

Before officially starting the registration process, NGO’s must first conduct a name search. This is to determine if there is NGO in Kenya that has been register with a similar name or if the name is deemed contrary to the law or otherwise objectionable.
Develop a comprehensive constitution for the NGO. These requirements are provided in the Second Schedule of the Non-Governmental Organizations Co-Ordination Regulations, 1992. The constitution should outline the following:
Name of Non-Governmental Organization (name they intend to register)
Object for which the NGO is established and administrative units.
Custody, use and investment of the funds and property of the NGO and the designation of the persons responsible thereof.
Purpose for which the funds may be used, and in particular –
the prohibition of the distribution of funds and assets among members;
prohibition of clauses in the constitution that may constitute loopholes for legitimate reimbursement of expenses incurred in carrying out the objects of the NGO;
rules governing the awarding of contracts to members of officials.
Persons or entities (if necessary) for whom membership is open.
Structure and management of the Organization –
titles of officers, trustees, auditors and their terms of office and methods of election, appointment, admission and suspension.
Composition of committees and their terms of office and method of election, appointment, admission and suspension.
Quorums for and dates of general meetings.
Financial year and periodicity of audit of accounts.
Inspection of books and list of members.
The formation of branches.
The manner of amending the name, constitution or rules of the NGO.
The manner of dissolution of the NGO and disposal of its property upon dissolution.

Submission of Application

Once the pre-registration requirements are met, the NGO can proceed to apply to the NGO Board. An application for registration shall be made by the chief officer of the proposed organization and specify:

other officers of the organization (Mandatory 3 officers);
the head office and postal address of the organization;
the sectors of the proposed operations;
the districts, divisions and locations of the proposed activities;
the proposed average annual budgets;
the duration of the activities;
all sources of funding;
the national and international affiliation and the certificates of incorporation;

The application should be accompanied by the organization's certified copy of the constitution and such other information as the Board may prescribe or other required documentation. It is essential to ensure that the application is complete and accurate to avoid delays in the registration process.

Review and Approval

The NGO Board reviews the application to assess its compliance with the regulatory framework and to verify that the NGO's activities do not contravene Kenyan laws. Once the application is approved, the NGO will be issued a certificate of registration. This certificate is a crucial document that signifies the official recognition of the NGO in Kenya.

Post-Registration Requirements

After successful registration, NGOs are required to comply with various post-registration requirements. These include:

Submission of annual reports to the Board on or before May 31st of each year.
Maintenance of proper accounting and financial management practices to ensure transparency.
Compliance with tax obligations which is essential to maintain the organization's legal standing.
Updating of the registered office or postal address upon change.
In the case of a name change of a registered or exempted organization, the Board will issue a new certificate of registration or exemption upon the surrender of the original certificate or payment of the prescribed fee.
In the event of any change in the officers or their titles within a registered organization, the organization is required to provide notice to the Board. The notice must be signed by three of the organization's officers.

Failure to comply with the notification requirements regarding changes in officers or their titles within a registered organization is considered an offense.

Upon successful registration under the Act, these organizations will cease to operate under any other Kenyan written law or on the basis of agreements with the government, as applicable.

Conclusion

In conclusion, NGO’s serve as integral agents of change in Kenya's socio-economic and developmental landscape. Driven by a steadfast commitment to fostering positive social transformation and community development, NGO’s undertake a diverse array of activities, ranging from addressing healthcare disparities to advocating for environmental sustainability.

However, adherence to the law, transparency, and credibility are paramount in ensuring the effectiveness and impact of NGO’s in Kenya.

Published on Aug. 22, 2024, 1:10 p.m.