Regulatory Requirements For Forming And Operating A Nonprofit
Chapter 1- Incorporated Trustees
Clause 824:Incorporation of Trustees of Certain
Communities, Bodies and Associations.
- Where two or more trustees are appointed
by any community of persons bound together
by custom, religion, kinship or nationality or by
anybody or association of persons established
for any religious, educational, literary, scientific,
social, development, cultural, sporting or
charitable purpose, they may, if so authorized
by the community, body or association (in this
Act referred to as “the association”) apply to the
Commission in the manner hereafter provided
for registration under this Bill as a corporate
body.
- Upon being so registered by the Commission,
the trustees shall become a corporate body in
accordance with the provisions of section 831 of
this Part of this Bill.
NNNGO’S RATIONALE
Nonprofits are set up to fulfil charitable purposes
and objectives. In setting up, trustees have the legal
role to lead the organisation in fulfilling this purpose
within legal bounds. Clause 824 therefore gives the
legal oversight for nonprofits to its board. The Board
(Incorporated trustees) of a nonprofit are a group of
individuals who together are ultimately responsible
for overseeing the operations of the organisation
and making sure it is working towards its objectives
(charitable purpose). Trustees therefore are the
“owner” of the nonprofit in trust for the general
public/beneficiaries/stakeholders. Hence under the
law they are the ones that ultimately bear the legal
responsibility for the organisation.
KEY OUTCOMES FOR NONPROFIT
Board members or trustees have a deep
understanding and commitment to the organisations
objectives and are willing to bear legal responsibility
1.2.0 Clearly articulate the objects (charitable
purpose) of the organisation through your
organisation’s constitution. See https://
bit.ly/32k2yNu for standard clauses in a
constitution.
1.2.1 Set out clearly the role of your board in the
organisation’s constitution.
1.2.2 Ensure prospective Board (Trustees)
have read the constitution and accepts
responsibility (through a signed document)
for leading the governance of the
organisation and ensuring its effectiveness.
1.2.3 Before applying formally to the Corporate
Affairs Commission (CAC); ensure the
board meets either physically or online to
discuss the constitution and agree to its
adoption. Minutes of this meeting has to be
documented.
1.2.4 The following minimum requirements
will be helpful when setting up your
trustees(board):
- There is no specific number of trustees
stated by law, we recommend at least 7.
- our nonprofit board must have officers
including a board chair/president and
secretary and be different persons.
- Ensure members of your board have the
necessary skills to lead the organisation.
Avoid the mistake of selecting your board
members for the sake of their status in
the society; your board members must be
well informed and attend board meetings
regularly.
1.2.5 If the organisation will have an executive
director, the board must make sure that:
- The office of the executive director is
separate from that of the founder and
that there are proper arrangements for
their appointment, supervision, support,
appraisal and remuneration.
- The role of the founder should be
clearly articulated in the organisation’s
constitution or other governance
documents. The founder may sit on the
board or serve as the interim executive
director; whatever is decided, his/her
role should be well defined and agreed
through a documented board resolution.
Clause 825: Classification of Associations.
The Commission shall determine the classification
of associations to be registered under this Part
in accordance with the aims and objects of the
associations.
NNNGO’S RATIONALE
To be registered as a nonprofit, your organisation
must have an aim and objective defining what it has
been set up to achieve. It can also be referred to
as your organisation’s mission or purpose. When
you apply to register your organisation with CAC
you need to demonstrate through your aims and
objectives that you are a nonprofit organisation.
Generally, CAC will decide what your aims/
objectives are by looking at your constitution as
this usually sets out your objectives (purpose).
Other types of evidence used to determine your
objectives(purpose) are your organisation’s activities,
annual reports, financial statements and other
corporate documents such as policies. The law
empowers CAC to register your organisation under
a classification(subtype) of association, which reflects
your purpose or purposes (for example either as
NGO, association, trade union, church, mosque,
social enterprise) etc.
KEY OUTCOMES FOR NONPROFIT
2.1.0 Nonprofit’s objects are clearly articulated.
2.1.1 Ensure your organisation’s objects are
clearly thought through and spelt out in your
constitution.
2.1.2 Work with your board and other critical
stakeholder (s) to develop an aim/object
(purpose) that is specific, measurable,
achievable, realistic and time bound.
Clause 826: Method of Application
- Application under section 824 of this Bill shall be
in the form prescribed by the Commission and
shall state
- the name of the proposed corporate body
which must contain the words “Incorporated
Trustees of”;
- the aims and objects of the association
which must be for the advancement of any
religious, educational, literary, scientific, social,
development, cultural, sporting or charitable
purpose, and must be lawful;
- the names, addresses and occupations of the
secretary of the association, if any.
- There shall be attached to the application
- two printed copies of the constitution of the
association; Trustees of”;
- duly signed copies of the minutes of the
meeting appointing the trustees and
authorizing the application, showing the
people present and the votes scored;
- the impression or drawing of the proposed
common seal, if there is one.
- The application shall be signed by the person
making it.
- The Commission may require such declaration or
other evidence in verification of the statements
and particulars in the application, and such other,
information, and evidence, if any, as it may think
fit.
- If any person knowingly makes any false
statement or gives any false information for the
purpose of incorporating trustees under this Part
of this Bill, he shall be guilty of an offence and
liable on conviction to imprisonment for one
year or to a fine as the court deems fit.
How to achieve this
3.2.1. Online application steps to incorporating a
trustee
- Connect to CAC’s registration portal at services.
www.cac.gov.ng or new.cac.gov.ng to register.
- Click on create account on the home page of the
portal
- Complete the forms displayed
Note: Accredited users should select “ARE YOU
AN ACCREDITED CUSTOMER?” and enter their
accreditation number in this format for individual
NBA/IND/12345 or ICAN/IND/12345 or ICSAN/
IND/12345, and for firm NBA/FM/12345, OR ICAN/
FM/12345, or ICSAN/F/12345.
- Accredited users must ensure that they enter
the email address that was used during their
accreditation. Enter the catcher as displayed in
the box
- Click on submit: for general users the system
will display the pre-entered “USERNAME” and
the auto generated “PASSWORD” immediately
while accredited users will be mailed their
“USERNAME” and “PASSWORD” after approval
at the back office.
- Reserve name
- Log in with your profile Select “REGISTRATION”
- Select the classification i.e. “BUSINESS NAME, or
COMPANY or INCORPORATED TRUSTEE”
Enter the availability serial code
- Click on continue
- Enter the details of the “TRUSTEES”
- Click on “ADD AN OBJECT” or “ADD
OBJECTS” and type in the nature of objects for
which the incorporated trustee is registered,
and then click on “ADD” to continue to add the
object until all the objects have been added.
- Select the “DROP OFF and PICK UP STATE”.
Click on continue until payment is made
- Select “GET STAMP” to stamp the document
electronically Make payment for electronic
stamping.
- The system will automatically affix the electronic
stamp duties on the documents (Form CAC1.1,
and Memorandum and Article of Association).
- The already printed documents must be signed
by the directors.
- Visit www.cac.gov.ng at the middle of the page
extreme right, select “DOCUMENT UPLOAD”.
Enter the incorporated trustee “AVAILABILITY
CODE”.
- Select the “ORIGINATING OFFICE” (This is
where you will pick up the certificate). Select “I
AM NOT A ROBOT” then follow the instruction
- Click on “BEGIN”.
- Select the type of document to be attached one
after the other and attach each one after properly
identifying same.
- After attaching all the documents, click on submit.
- The commission would rely on the uploaded
documents to treat your application. The
certificate will be generated by the commission
and all relevant documents will be certified.
- To know the status of application; check the
column that reads “STATUS” on your profile, this
will show “NOT SUBMITTED”, or SUBMITTED,
or PENDING APPROVAL, or APPROVED
depending on the stage the application is.
- When the status reads “APPROVED” and
registration number is displayed, then you can
approach the office where you had selected
as the DROP OFF/PICK UP OFFICE or
“ORIGINATING OFFICE” with the original
copy of the documents earlier uploaded, the
original should be submitted in exchange for the
certificate/certify true copy (CTC).
- Automatic Tax Identification Number (TIN):
Immediately a certificate of incorporation is
generated in the registration portal, a TIN will be
issued and sent to the customer’s email address
from the FIRS (Federal Inland Revenue Service)/
JTB (Joint Tax Force) through the Integrated
Stamp Duty System (ISDS) portal.
Please visit
http://new.cac.gov.ng/home/onlineregistrations/ to register.
3.2.2 Note that the use of common seal is
voluntary and no longer mandatory
3.2.3 Ensure all statements made in the application
are truthful and honest.
Clause 827: Qualification of Trustees
- A person shall not be qualified to be appointed
or act as a trustee if:
he is an infant; or
he is a person of unsound mind having been
so found by a court;>/li>
he is an undischarged bankrupt; or
he has been convicted of an offence involving
fraud or dishonesty within five years of his
proposed appointment.
If a person disqualified under paragraph (c) or
(d) of subsection (1) of this section acts as a
trustee, he shall be liable to a penalty for every
day during which he so acts. The penalty shall be
determined in accordance with regulations made
by the commission from time to time.
the documents such as policies. The law empowers
CAC to register your organisation under a
classification(subtype) of association, which reflects
your purpose or purposes (for example either as
NGO, association, tr
NNNGO’S RATIONALE
Since trustees are charged with the mandate
of leading a nonprofit and serving as owners in
trust, they are vital to the governance, health and
sustainability of nonprofits, hence they play an
important role by voluntarily donating their time and
talents to the growth of the nonprofit sector, shaping
a brighter future for communities their organisations
serve.
Given this unique role, careful attention has to
be paid to the selection of nonprofit trustees
via leadership and integrity. Even though board
members are volunteers, they have legal duties
that they must meet to ensure the charity is well
governed.
KEY OUTCOMES FOR NONPROFIT
4.1 Nonprofit has a functioning board that safeguards
and acts in the best interests of the charity and its
beneficiaries.
4.2 Nonprofit board ensures that the organisation is
compliant with laws, voluntary rules and codes
guiding the operation of nonprofits.
How to achieve this
4.3.1 Ensure that individuals you are inviting to
your board have integrity, sound judgement
and demonstrated interest in your objective
(purpose). Do a thorough background check
and findings.
4.3.2 Ensure that individuals proposed as
members of the board can make firm time
commitment to attend all board meetings
and other board functions.
4.3.3 Set clear expectations on what the board
will do for the organisation. Using your
constitution and insights to develop a job
description that describes exactly the role
your board members will play including
number of meetings, length of term, meeting
attendance, level of involvement and
fundraising activities. Please visit https://bit.ly/2MMjhoN for a sample.
4.3.4 Develop a formal process for recruiting your
board. Please visit
https://bit.ly/2GVu9ga for
a sample.
Clause 828: Constitution
The constitution of the association shall in addition to
any other matter:
- state the name or title of the association;
- the aims and objects of the association; and
- make provisions, in respect of the following
- appointment, powers, duties, tenure of office
and replacement of the trustees;
- the use and custody of the common seal;
- the meetings of the association;
- the number of members of the governing
body, if any, the procedure for their
appointment and removal, and their
powers; and where subscriptions and
other contributions are to be collected, the
procedure for disbursement of the funds of
the association, the keeping of accounts and
the auditing of such accounts.
KEY OUTCOMES FOR NONPROFIT
Constitutions help set the rules guiding the operation
of nonprofits. They are important because they give
some certainty about how the organisation is run
and establish the procedures that everyone involved
can rely on. The rules and processes provided in the
constitution binds the board, the organisation and its
members. Your organisation’s constitution is what
CAC would use in most cases to determine your
object and to decide whether you are a nonprofit.
NNNGO’S RATIONALE
5.1 The organisation has in place a constitution that
governs its operations and that safeguards its objects.
How to acheive this
- Ensure that your constitution generally sets out
the following:
- Clauses that prevent the organisation from
providing any private benefit to its members.
- The powers of the board
- How to become a member, rights and obligations
of members.
- How members of the board and any office
bearer such as president or treasurer are elected
or appointed.
- How members of the board and any office
bearer such as president or treasurer are elected
or appointed. How meetings of members and
meetings of the Board are called and held
- How authority is delegated to the board, staff or
volunteers and What will happen if it needs to
be wound up.
- Do not do copy and paste for your constitution.
- Ensure your constitution and governance
documents accurately reflect how your
organisation operates or will operate. You must
be able to follow your own rules as set out in
your constitution or governance documents.
See https://bit.ly/32k2yNu for standard clauses in a
constitution
Clause 829: Advertisement and Objections.
- If the Commission is satisfied that the application
has complied with the provisions of sections
826, 827 and 828 of this Bill, it shall cause the
application to be published in a prescribed form
in two daily newspapers circulating in the area
where the corporation is to be situated and at
least one of the newspaper shall be a national
newspaper.
- The advertisement shall invite objections, if any,
to the registration of the body.
- The objection shall state the grounds on which
it is made and shall be forwarded to reach the
Commission within 28 days of the date of the last
of the publications in the newspapers.
- If any objections are made, the Commission shall
consider them and may require the objections
and applicants to furnish further information
or explanation, and may uphold or reject the
objections as it considers fit and inform the
applicant accordingly.
NNNGO’S RATIONALE
Nonprofits generally are set up for public benefit,
While being formed, it is important for the public
to be alerted to its formation and to encourage
the public to object where they find the activities
or anyone on the board of the organisation not
suitable. It also helps to ascertain if the activities of
the organisation being formed or persons on the
board are unlawful or working against public policy.
This process also helps the organisation to do further
background check on its trustees.
KEY OUTCOMES FOR NONPROFIT
6.2. Organisation’s registration and proposed
activities becoming public knowledge.
How to achieve this
If steps in this guide are followed, there should not
be any objection, however nonprofits should ensure
they have mechanisms in place for responding quickly
to any objection raised.
Clause 830: Registration and Certificate.
- If, after the advertisement, no objection
is received within the period specified
in section 829 of this Bill or, where any
objection is received, and the same is rejected,
the Commission, having regard to all the
circumstances, may assent to the application or
withhold its assent.
- If the Commission assents to the application, it
shall register the trustees and issue a certificate in
the prescribed form.
NNNGO’S RATIONALE
Registration certificate issued by CAC confers legal
identity for a nonprofit and a result of successful
application. With this certificate, the organisation
is recognized as a legal entity that can now operate
based on its objects (purpose) as stated in its
constitution; from time to time the certificate serve as
a proof of registration with the federal government.
KEY OUTCOMES FOR NONPROFIT
7.1 Organisation becomes registered with regulatory
authorities.
How to achieve this
7.2.1 Ensure your organisations registration
number is used on all branding materials like
letterhead and business cards, website and
emails in correspondence with CAC.
7.2.2 Ensure the names of your trustees are
properly listed on the certificate and that
there are no wrong spelling errors.
7.2.3 You can also use the following statement on
your public documents (letterhead, emails
and website) (nonprofit name) (Registration
no) is registered with the Corporate Affairs
Commission.
7.2.4 Keep your certificate of registration secured
and hold both electronic and hard copies in
secured files.
7.2.5 Ensure to maintain your organisations
eligibility to be registered by remaining a
nonprofit pursuing charitable purposes and
complying with the Part F of CAMA.
Clause 831: Effect of Registration and Certificate.
- From the date of registration, the trustees shall
become a body corporate by the name described
in the certificate, and shall have:
- perpetual succession;
- a common seal if they so wish;
- power to sue and be sued in its corporate
name as such trustees; and
- Subject to section 837 of this Part of this
Bill to hold and acquire, and transfer, assign
or otherwise dispose of any property, or
interests therein belonging to, or held for
the benefit of such association, in such
manner and subject to such restrictions and
provisions as the trustees might without
incorporation, hold or acquire, transfer,
assign or otherwise dispose of the same for
the purposes of such community, body or
association of persons.
- The certificate of incorporation shall vest in the
body corporate all property and interests of
whatever nature or tenure belonging to or held
by any person in trust for such community, body
or association of persons.
- A certificate of incorporation when granted shall
be prima facie evidence that all the preliminary
requisitions herein contained and required
in respect of such incorporation have been
complied with, and the date of incorporation
mentioned in such certifiate shall be deemed to
be the date on which incorporation has taken
place.
NNNGO’S RATIONALE
The registration certificate issued by CAC will carry
the date on which the incorporation took place i.e.
the date on which it meets the requirement to be
registered as a nonprofit. The use of common seal is
no longer mandatory however you may want to have
a common seal for the purpose of branding.
KEY OUTCOMES FOR NONPROFIT
8.1 Nonprofit trustees conferred legal entity with
powers to sue or be sued
How to achieve this
8.2.1 Ensure that minimum governance standards
for running nonprofits are adhered to.
8.2.2 Ensure your organisation’s records
(operations and finance) are kept up to date
and accurate.
8.2.3 Ensure you submit an annual returnsinformation about your organisation’s
activities and audited financial statements
every year to CAC.
8.2.4 Notify CAC of any changes to your details,
contacts, board, amendment to constitution
Clause 832: Related Associations.
Without prejudice to the provisions of section 850
of this Bill, the Commission may direct that for all or
any of the purposes of this Bill-
- an association be treated as forming part of an
already registered association; and
- any two or more association having the same
trustees be treated as a single association.
NNNGO’S RATIONALE
Nonprofit organisations need to guard against
duplication of efforts and competition for same
resources and funding. Setting up multiple
organisations for the same purpose or having same
board of trustees for different organisations reduces
efficiency and effectiveness. This however does not
preclude organisations that fall under a larger parent
body/association with multiple separately registered
entities.
The board of a nonprofit should always consider the
best way to fulfill its objectives(purpose) without
establishing or registering multiple entities. It may be
more effective to merge or wind other nonprofits
down and transfer the funds and assets to one for
effectiveness.
KEY OUTCOMES FOR NONPROFIT
9.1 Reduce duplication of effort and competition for
resources.
How to achieve this
9.2.1 Before starting and reporting a new
nonprofit, ensure you check the CAC portal
to see which nonprofits are already operating
for similar purpose.
9.2.2 Ensure your board weighs the option of
registering multiple entities.
CHAPTER 2 - CHANGES IN REGISTERED
PARTICULARS OF INCORPORATED TRUSTEES
Clause 833: Changes of Names or Objects.
- Where the association is desirous of changing
or altering its name or objects or any of them,
the trustees shall apply to the Commission in
the prescribed form setting out the alterations
desired and attaching a copy of the resolution
approving the change and duly certified by the
trustees.
- The Commission on receipt of the application
shall consider it and, if satisfied that the change or
alteration is prima facie lawful shall -
- cause the application to be published in two
daily newspapers in the manner specified in
subsection (1) of section 829 of this Bill; and
- direct the corporation to display for at least
28 days a notice of the proposed change
or alteration conspicuously mounted at the
corporation headquarters, or at any branch
offices, or any such places where a majority
of the members are likely to see it, as the
Commission may require.
- The publication and notices shall call for
objections which, if any, shall state the grounds
of objection and be forwarded to reach the
Commission not later than 28 days after the last
of the publications in the newspapers
- The provisions of section 828 and of subsection
(1) of section 826 of this Part of this Bill
shall apply to this section as they apply to an
application for registration.
- If the Commission assents to the application,
the alterations shall be made and in the case of a
change of name,
Clause 834: Alteration of Provisions of the
Constitution.
Subject to sections 828 and 829 of this Part of this
Bill, an association whose trustees are incorporated
under this Part of this Bill may alter its constitution
by a resolution passed by a simple majority of its
members and approved by the Commission.
Clause 835: Replacement and Appointment of
Additional Trustees.
- Where a body or association intends to replace
some or all its trustees or to appoint additional
trustees, it may by resolution at a general
meeting do so and apply in the prescribed form
for the approval of the Commission.
Upon such application the provision of
subsections (2) to (4) of section 833 of this Bill
shall apply to this section as they apply to the
change of name or object.
- If the Commission assents to the application,
it shall signify its assent in writing to the
corporation and the appointment shall become
valid as from the date of the resolution
appointing the trustees.
Clause 836: Changes in Contravention of Certain
Provisions of this Part of this Bill.
Any change or alterations purported to be made in
contravention of section 833, 834 or 835 of this Part
of this Bill shall be void.
NNNGO’s RATIONALE
Nonprofit have a duty to notify CAC of any
changes to their details including trustees (board),
constitution, name of the nonprofit or objects
(purpose). Once the nonprofit has made a decision
on the changes, it must notify CAC as soon as it
reasonably can.
KEY OUTCOMES FOR NONPROFIT
How to achieve this
13.2.1 Notify CAC within a reasonable period
of time as soon as any changes are made
to your name, constitution or board. We
recommend doing this within 28-60 days (for
medium, small and large organisation) taking
such decision.
13.2.2 Ensure minutes of meeting of the board
where such decision is taken is attached
including copies of constitution etc.
13.2.3 Ensure your organisation complies with
CAC’s requirements for changing yourPage-11
governance documents. Constitutions can
be changed through a resolution passed
by a simple majority of the organisation’s
members and this has to be approved by the
Commission before it becomes valid.
13.2.4 When the term of a board member expires
and he/she is being replaced or a new
member is added to the board. CAC must
be notified through an application, the
process would require an advert in 2 daily
newspapers publicly displayed for 28 days
based on clause 835 and clause 833(2) to
(4).
13.2.5 Ensure all changes follow the prescribed
process by CAC; failure to do so makes the
alteration void.
CHAPTER 3 - COUNCIL, POWERS, INCOME
AND PROPERTY
Clause 837: Council or Governing Body
The association may appoint a council, or governing
body, which shall include the trustees and may,
subject to the provisions of this Part of this Act,
assign to it such administrative and management
functions as it deems expedient.
NNNGO’S RATIONALE
Nonprofits are an integral part of the Nigerian
society reaching every community across the
federation and neighbouring countries. They enrich
our culture, protect our environment, enable us
practice our faith, promote our health and wellbeing,
strengthen our democracy, contribute to better
public policies and advocate on behalf of the
vulnerable and communities. Nonprofits cannot do
all these good works without their board members.
Their members have ultimate responsibility for
running the organisation, managing its finances, its
operations and managing of staff and volunteers.
While clause 837 mentions the formation of council
or governing body, the practice in the nonprofit
sector is that governing body, council, governors or
trustees all refer to the board or governing body of a
nonprofit. Nonprofits are free to choose a term they
feel appropriate. We define a board or governing
body as a group of individuals who together are
ultimately responsible for overseeing the operations
and working towards achieving the purpose
(objects) of a nonprofit.
KEY OUTCOMES FOR NONPROFIT
14.1 Nonprofits are clear about the right
nomenclature for their board
How to achieve this
14.2.1 Ensure the board is clear and consistent from
the outset what name it will bear: council, trustees,
board, governing board, committee, governors and
board of directors or board of trustees.
14.2.2 Create a rule/policy on how to establish
sub committees: It can be hard to organize full
board members to meet on specific issues requiring
expertise, ensure board committees are set up by
the board for such functions they can either be called
sub-committee, standing committees or ad-hoc.
Note that committees make recommendations
to the full board but they generally do not make
decisions for the board.
Clause 838:Exercise of Powers of Trustee.
The powers vested in the trustees by or under this
Bill shall be exercised subject to the directions of
the association, or of the council or governing body
appointed under section 835 of this Part of this Bill,
as the case may be.
NNNGO’S RATIONALE
Board members help nonprofits stay focused on its
objects (purpose) manage its finances effectively
and comply with the legal, operational and ethical
requirements of the organisation. However, these
roles are subject to the rules/policies set by the
board itself.
KEY OUTCOMES FOR NONPROFIT
15.1.2 Non-profits have well-articulated board/
governance policy.
15.1.3 The board is clear about its primary role and
reflects this in the exercise of its duties.
How to achieve thisPage-12
15.2.5 Ensure the board develops a policy on its
way of working including what matters are reserved
for the board and which can be delegated.
15.1.6 Ensure the board understands and
collectively exercises the powers of delegation to
senior managers. These should be described in
a document which gives enough detail and clear
boundaries.
Clause 839: Application of Income and Property.
- The income and property of a body or
association whose trustees are incorporated
under this Part of this Bill shall be applied
solely towards the promotion of the objects
of the body as set forth in its constitution and
no portion thereof shall be paid or transferred
directly or indirectly, by way of dividend, bonus,
or otherwise by way of profit to any of the
members of the association.
- Nothing in subsection (1) of this section shall
prevent the payment, in good faith, of reasonable
and proper remuneration to an officer or servant
of the body in return for any service actually
rendered to the body or association:
Provided that
- with the exception of ex-official members
of the governing council, no member of a
council of management or governing body
shall be appointed to any salaried office of
the body, or any office of the body paid by
fees; and
- no remuneration or other benefit in money
or money’s worth shall be given by the body
to any member of such council or governing
body, except repayment of out-of-pocket
expenses or reasonable and proper rent
for premises demised, or let to the body or
reasonable fee for services rendered.
- If any person knowingly acts or joins in acting in
contravention of this section, he shall be liable to
refund such income or property so misapplied to
the association.
NNNGO’S RATIONALE
Organisations can continue to enjoy their nonprofit
status only if they can keep to their charitable object
which requires that they do not pay or transfer
income, profit or properties of the organisation to
any of its members. The board have the ultimate
responsibility for the income and properties of
nonprofits and assets including its reputation.
How to achieve this
16.2.5 Ensure trustees maintain their independence
and inform the board if they feel beholden
to any interest. Board must have a conflict of
interest policy.
16.2.6 Ensure operational plans and budgets are in
line with the organisation’s objects (purpose)
and agreed strategic goals.
16.2.7 Ensure the board regularly monitors
performance using consistent framework,
checks operational performance against
delivery of the organisation’s objects,
strategic goals, budgets and risks.
16.2.8 Ensure board agrees to a reasonable
remuneration for the organisation’s staff
taking into account prevailing economic
indices. Board must enforce a no pay policy
for members of the board and has a clear
policy on board reimbursements on travels
and meeting attendance costs.
16.2.9 Ensure the board agrees and overseas
an effective process for appointing and
reviewing independent external auditors.
Board should have an audit committee with
a chair that has recent and relevant financial
expertise and should meet with auditors
without the staff of the organisation at least
once a year.
16.2.10 Ensure board audit committee can consider
concerns raised by staff or volunteer about
improprieties including arrangement for
proportionate and independent investigation
and follow-up.
CHAPTER 4 - SUSPENSION OF TRUSTEES,
APPOINTMENT OF INTERIM MANAGERS
Clause 840: Suspension of Trustees, etc.,
Appointment of Interim Manager, etc.
- The Commission may by order suspend the
trustees of an association and appoint an interim
manager or managers to manage the affairs of an
association if it reasonably believes that
- there is or has been any misconduct or
mismanagement in the administration of the
association;
- it is necessary or desirable for the purpose of
- protecting the property of the association.
- securing a proper application for
the properties of the association of
the towards achieving the objects of
the association, the purposes of the
association of that property or of
property or of property coming to the
association,
- public interest; or
c the affairs of the association are being run
fraudulently.
- The trustees shall be suspended by an order of
court upon the petition of the Commission or
members consisting one-fifth of the association.
The petitioners shall present all reasonable
evidence or such evidence as requested by the
court in respect of the petition.
- Upon the hearing of the petition and the
appointment of the interim manager, the court
with the assistance of the Commission may make
provision with respect to the functions to be
discharged by the interim manager or managers
appointed by the order:
- the powers and duties of the interim
manager or managers which may include
the powers and duties of the trustees of the
association concerned.
- any powers or duties specified by virtue
of paragraph (a) to be exercisable or
performed by the interim manager or
managers to the exclusion of the trustees.
- The functions shall be discharged by the interim
manager or managers under the supervision of
the commission.
- The reference in subsection (1) to misconduct
or mismanagement extends to the employment.
a or the remuneration or reward of persons
acting in the affairs of the association, or
a for other administrative purposes, of sums
which are excessive in relation to the
property which is or is likely to be applied
or applicable for the purposes of the
association.
- A court of competent jurisdiction may also
do one or more of the following upon the
petition of the commission or members of the
association.
- by order suspend any person, officer, agent
or employee of the association from office or
employment, provided that such suspension
shall not exceed 12 months from the date
thereof;
- by order appoint such number of additional
trustees as it considers necessary for the
proper administration of the association;
- By order
- vest any property held by or in trust for
the association in the official custodian,
who shall be a person so designated by
the court from time to time.
- require the persons in whom any such
property is vested to transfer it to the
official custodian who be an individual
as the court may, from time to time
designate, or
- appoint any person to transfer any such
property to the official custodian;
(d) order any person who holds any
property on behalf of the association, or
of any trustee for it, not to part with the
property without the approval of the court.
(e) order any debtor of the association
not to make any payment in or towards the
discharge of the debtor’s directly liability to
the association but to make such payment
into an interest yielding account held by
the Commission for the benefit of the
association;
(f) by order restrict (regardless of
anything in the trusts of the association) the
transactions which may be entered into, or
the nature or amount of the payments which
may be made, in the administration of the
association without the approval of the court;
(g) by order appoint an interim manager
to act as receiver and manager in respect of
the property and affairs of the association.
Where, at any time after the commission has
made an enquiry into the affairs of the association, it
is satisfied as to the matters mentioned in subsection
(1) of this section it may do either or both of the
following
- who has been responsible for or privy to
the misconduct or mismanagement, or
- whose conduct contributed to or
facilitated it;
- by order of the court establish a scheme
for the administration of the association.
The court may by order replace a trustee
removed under subsection (7) of this section.
A person who contravenes an order under
subsection (5), (d), (e) and (f) of this section
shall be guilty of an offence and liable on
conviction to fine as the court deems fit or
imprisonment for a term of 6 months or to
both. The Commission may make regulations in
respect of -
- the functions, powers and remuneration of
the interim manager and manner in which the
interim manager shall make reports to the
Commission.
- making reports to the Commission; and
such other things as may be necessary
for the effective administration of the
association during the period of its interim
administration.
The Commission shall only exercise its power
under this section in respect of any Association
with the approval of the Minister.
NNNGO’S RATIONALE
The public’s trust that nonprofits are delivering
public benefits is fundamental to the success of
the sector. Avoiding disputes and issues that
could bring disrepute to the organisation and the
wider nonprofit community is important. Making
transparency and accountability real through open
two-way communications, internal controls, rigorous
monitoring, audit reviews, executive and board
performance reviews. Nonprofits should avoid
situations that would lead to the suspension of its
board and appointment of interim managers.
KEY OUTCOMES FOR NONPROFIT
17.1 Nonprofit organisations ensures the
operations and financial management
activities are guided by the values of
ethics and culture of transparency and
accountability.
How to achieve this
17.2.1 Ensure strong internal controls are in place
to prevent misconduct or mismanagement
of the organisation’s resources. Develop
a financial management policy. Please visit
https://bit.ly/300SWa8 for a sample.
17.2.2 Ensure board agrees and abides by a conflict
of interest policy. Please visit
https://bit.
ly/2H6MwyW for a sample.
17.2.3 Have a whistle blower policy and encourage
staff members to report concerns and
improprieties.
17.2.4 Board ensures that all stakeholders have the
opportunity to hold the board to account.
17.2.5 Ensure the process for setting staff
remuneration is clearly documented including
allowances and reimbursements.
17.2.6 Ensure that board has a transparent process
for making and handling complaints and that
any complaints either internally or externally
received are handled constructively,
impartially and effectively.
17.2.7 The organisation must have a dispute
resolution mechanism capable of
transparently protecting and safeguarding the
organisation’s object.
17.2.8 For organisations whose board are
appointed by its members, a clear policy onPage-15
who is eligible for membership should be
developed.
17.2.9 The organisation must have clear, accurate
and up-to-date membership record.
17.2.10 Keep members informed about the
organisation’s work.
17.2.11 Seek, value and take into account members
view on key issues.
17.2.12 Be clear and open about the ways that
members can participate in the organisation’s
governance.
CHAPTER 5 - COMMON SEAL AND CONTRACT
Clause 841: Common Seal
The common seal of the body corporate (if there
is one) shall have such device as may be specified
in the constitution; and any instrument to which the
common seal of the corporate body has been at
fixed in apparent compliance with the regulations
for the use of the common seal shall be binding
on the corporate body, notwithstanding any defect
or circumstance affecting the execution of such
instrument.
NNNGO’S RATIONALE
Common seals serve as the signature of the
organisation on its documents binding it to all
obligations undertaken in the document. With most
countries now digitalizing documents and branding,
the use of common seals is no longer fashionable.
The act has now made the use of seals voluntary.
KEY OUTCOMES FOR NONPROFIT
18.1 Organisations may either have a seal or not.
How to achieve this
18.2.1 Since seals are meant to bind the
organisation to obligations undertaken in
documents, nonprofits not making use of
seals must ensure that contracts and other
binding documents are signed by senior
management, usually the Executive Director
or a designated staff.
18.2.2 Develop a clear delegation or authority to
sign or approve organisational obligations
both internally and externally.
Clause 842: Contract of Corporate Body.
Subject to the provisions of this Part of this Act and
of the constitution of the association, the corporate
body may contract in the same form and manner as
an individual.
NNNGO’s RATIONALE
In the course of carrying out its activities, nonprofits
can enter into contractual agreements with third
parties in areas such as grants, partnership, service/
vendor agreements, consultancy etc. Registration
with CAC confers the organisation as a legal entity
that can sue and be sued including the ability
to contract in the same form and manner as an
individual.
KEY OUTCOMES FOR NONPROFIT
19.1 Nonprofit ensures that relationships and
agreements with third parties including staff,
board and service providers, donors etc. are
properly contracted.
How to achieve this
19.2.1 Ensure that the organisation’s agreements
with the staff, board, donors, service
providers etc. are properly documented,
contracted and properly assented including
termination and expiration clauses.
19.2.2 Ensure all contractual obligations are properly
filled and key milestones and deliverables
achieved within the set deadlines.
19.2.3 Ensure organisation has sufficient capacity to
manage grants, finances and reporting.
Clause 843: Accounts of Dissolved Incorporated
Trustees.
- Where a bank holds one or more accounts inPage-16
the name of or on behalf of the incorporated
trustees of a particular association, and the
account, or, if it so holds two or more accounts,
each of the accounts is dormant, the bank shall
without delay notify the Commission of these
facts.
- Where the Commission receives a notice
under subsection (1) of this section, the
Commission may request that the association
provide evidence of its activities, and where
the association fails to respond satisfactorily
within 15 days of the request, the Commission
may dissolve the association in accordance
with section 851. Where an association is so
dissolved, the Commission may give a direction
to the bank concerned to transfer:
- the amount, or, as the case may be, the
aggregate amount, standing to the credit
of the relevant association in the account
or accounts in question to such other
association as is specified in the direction
in accordance with subsection (3) of this
section to the bank or;
- to each of two or more associations so
specified in the direction, such part of that
amount or aggregate amount as is there
specified in relation to that association.
- The provisions of subsection (2) of this section
shall also apply where the Commission is unable,
after making reasonable inquiries to locate an
association registered under this Bill or any of its
trustees.
- The Commission may specify in a direction
under subsection (2) of this section such
other association or charities as it considers
appropriate having regard to the purposes
of that association or charity. Provided that
before any association may be so specified
by the Commission, the trustees of such an
association shall, by a written memorandum to
the Commission, indicate its willingness to accept
such amount to be transferred to it.
- Any amount received by an association by virtue
of this section is to be received by the association
on terms that
- it is to be held and applied by association for
the purposes of the association; and
- as property of the association, it is
nevertheless subject to any restrictions
on expenditure to which it was subject as
property of the relevant association.
- the receipt of a trustee for an association
in respect of any amount received from a
relevant bank by virtue of this section is a
complete discharge of the bank in respect of
that amount.
- The Commission shall only exercise its power
under this section in respect of any Association
with the approval of the Minister.
CHAPTER 6 - ACCOUNTS AND ANNUAL
RETURNS
Power to Direct Transfer of Credits in Dormant
Bank
Clause 844: Accounts which Cease to be Dormant
before Transfer.
- Where any bank has given notice to the
Commission under section 843(1) of this
Bill, it shall, subject to any contrary provision
under the relevant banking enactment, not
reactivate the dormant account(s), without
first notifying the Commission.
- If before any transfer is made by the bank
in pursuance of a direction under section
843(2) of this Act, the bank has cause
to believe that the account or accounts
held by It in the name of or on behalf
of an association is no longer dormant,
the bank shall without delay notify the
Commission that the account or accounts
have ceased to be dormant.
- If it appears to the Commission that
the account or accounts in question is
or are no longer dormant, or where
the Commission receives satisfactory
account of account of the activities of the
association pursuant to section 843(2),
it shall revoke any direction made to the
bank under section 843(2) of this Bill
with respect to any such account.
Clause 845: Dormant Bank Accounts:Supplementary.
- No obligation as to secrecy or other restriction
on disclosure, however imposed, shall preclude
a relevant bank from disclosing any information
on the status of dormant bank accounts to the
Commission for the purpose of enabling the
Commission to discharge its functions under
sections 843 and 844 of this Bill.
- For the purposes of sections 843 and 844 of this
Bill and this section, an account is dormant if no
transaction, other than:
- a transaction consisting of a payment into the
account, or
- a transaction which the bank holding the
account has itself caused to be affected,
has been affected in relation to the account
within the period of 5 years immediately
preceding the date when the Commission is
informed as mentioned in section 84(1)(a)
of this Bill.
- For the purposes of sections 843 and 845 of this
Bill, the term, a “bank and this section, a “relevant
bank” means:
- any Central Bank of Nigeria designated
money deposit institution; or
- such other person or organisation who may
lawfully accept deposits as may be prescribed
by the Minister.
- For the purposes of section 841 and 842 of this
Bill, references to the transfer of any amount to
an association are deemed to be references to
any it’s transfer made to:
- the association trustees of the Association,
or any trustee for the association, as the
association trustees may determine, and
any reference to any amount received by an
association is to be read accordingly.
NNNGO’s RATIONALE
Having a bank account is essential for any
organisation. Nonprofits as part of their
accountability processes must have a bank account.
Managing a bank account in a nonprofit can be
simple or complex depending on the size of the
organisation, and amount of money and assets it
possesses. Dormant accounts are evidence of no
activity for a long period of time.
The length of time before a bank account goes
inactive in Nigeria is 12 months for a current account
and is classified dormant if it remains inactive for
another 12 months. Before accounts are reclassified,
your Banking institution will notify you 3 months
prior to the occurence. In safeguarding the funds
in this account, in the case where the organization
has not responded and the money is just sitting
with the bank, the law provides for the money to
be declared/or brought to the attention of CAC
who then sets up processes of transferring the
money to other nonprofits with similar purpose
upon the approval of the minister. A dormant bank
account signals to regulators and the public that the
organisation is no longer in existence. Nonprofits
not operating their bank account for up to 5 years
at a stretch may send a signal to CAC the need for
revocation of registration.
KEY OUTCOMES FOR NONPROFIT
22.1 Nonprofit remains active and maintains
ongoing activities and financial transactions
through the financial institutions.
22.2.1 Ensure all financial transactions of the
organisation goes through a bank account.
22.2.2 Where the organization is having financial
difficulties, ensure that donations as small as
they are; go through your organisational bank
account.
22.2.3 To prevent the organisation from going into
a period of inactivity, the Board may put in
place a policy for operating reserve funds and
investments.
22.2.4 Ensure your banking details are up to date
and that the finance team have a chart of
accounts in order not to lose sight of any of
the organization’s bank accounts.
Clause 846: Bi-annual Statement of Affairs
- The trustees of an association shall submit to the
Commission a bi-annual statement of affairs of
the association.
- If the trustees fail to comply with subsection (1)
of this section, every trustee shall be liable to a
penalty for every day during which the default
continues in such amount as the Commission
shall specify in its regulations.
NNNGO’S RATIONALE
Statement of affairs shows your organisation’s
total assets minus total liabilities or simply put,
what you own minus what you owe (net worth). It
compares transactions at the beginning of a period to
transactions at the end of a period to calculate profit
and loss.
When done, if your assets exceed your liabilities
this shows your organisation has a positive capital
position (profit). Your organization is not financially
viable if your liabilities is greater than your assets i.e.
what you owe is greater them what you own.
This report is required by CAC twice a year (June
& December). This report helps to ascertain
a nonprofits sustainability. It provides smaller
nonprofits with the simplicity of managing their
finances without having to understand principles of
book keeping and it is less expensive to implement
than a double-entry book keeping system.
KEY OUTCOMES FOR NONPROFIT
23.1 Nonprofit’s net worth per time available
for sustainability planning and regulatory
compliance.
23.2.1 Ensure the organisation has a paid staff or
volunteer staff with basic knowledge in
accounting principles and has interest in
playing with numbers. Encourage Board and
staff to develop financial literacy.
23.2.2 Ensure the organisation has an organisational
budget which must include program costs
and overhead. Budgets help provide financial
information to support all planning.
Please visit https://bit.ly/2yVQNRc for a sample.
23.2.3 Ensure the organization keeps proper
records of money received and spent. Keep
the records in any format you choose; what
is important is that it must be easy to find.
We recommend keeping it in both electronic
and hard copies.
23.2.4 Ensure organisation has in place and
implements a financial management policy
and that the organisation’s annual accounts
are inspected and audited by an audit firm.
Smaller organizations may keep and submit a
profit and loss account to CAC. Larger nonprofits are encouraged to have proper audits
by an audit firm.
Please visit https://bit.ly/300SWa8 for a sample.
23.2.5 Ensure Board regularly reviews the
organization’s income statement, balance
sheet (asset and liabilities) and budget
quarterly or bi-annually and the annual
financial report and audit once a year.
23.2.6 Ensure statement of affairs is accurately
prepared and sent to CAC. Note that no
one size fits all financial report exists hence
you must design your report in a way that
communicates information specific to your
organization’s current circumstances in a
format that matches knowledge level and
board members’ roles.
Clause 847: Accounting Records and Statement of
Accounts.
- The trustees of an association shall ensure that
accounting records are kept in respect of the
association and such accounting records shall be
sufficient to show and explain the transactions
of the association and shall explain all the
association’s transactions and:
- disclose at any time, with reasonable
accuracy, at any time, the financial position of
the association at that time; and
- enable the trustees to ensure that statements
of accounts prepared by them comply with
subsection (3) sa of 4 this section.
- The accounting records shall, in particular
contain:
- entries showing from day to day all sums
of money received and expended by the
association, and the matters in respect of
which the receipt and expenditure takes
place; and
- a record of the assets and liabilities of the
association.
- The Commission may make regulations generally
for the purpose of this Part of this
- Bill and, in particular, without prejudice to the
generality of the foregoing provisions, make
regulations:
- prescribing the forms and returns and other
information required under this Part of this
Bill: prescribing the procedure for obtaining
any information required under this Part of
this Bill;
- requiring returns to be made within the
period specified therein by anybody
corporate to which this Part of this Bill
applies; and
- prescribing relevant accounting principles/
standards to be adopted by the association.
- Regulations under subsection (3) of this section
may in particular make provision:
a for any such statement to be prepared in
accordance with such methods and principles
as are specified or referred to in the
regulations; and
a as to any information to be provided by way
of notes to the accounts.
- The financial year of an association shall be
determined by the Commission through
Regulations issued in pursuance of subsection
(3) of this section. The Commission may also
make provision for determining the financial
years of an association for the purpose of this Bill
and any regulations made under it.
Clause 848: Preservation of Accounting Records.
- The accounting records of an association shall be
preserved by it for a period of six years from the
date on which they were made.
- Communicate and prepare reports of your
activities to meet your reporting obligations
to CAC, other government regulators,
stakeholders, donors, funder and the public.
- Though the process might be delegated, it is the
responsibility of the Board to ensure account
records are kept and that they are prepared
according to relevant accounting principles
adopted by the organization. The law requires
this records be kept for 6 years.
NNNGO’S RATIONALE
Whether reporting to CAC or not, nonprofits must
keep records of their finances and operations as this
aids their transparency and accountability. Under this
law, nonprofits have an obligation to CAC to keep
records on how they receive and spend money.
When nonprofits show records of how they are run,
systems are strengthened:
Demonstrate to regulators that the organiasation in
question continuies to be run as a nonprofit and is
working towards its objectives, hence, should remain
eligible as a registered nonprofit.
Shows whether or not the organisation is in good
financial health and is being run efficiently.
KEY OUTCOMES FOR NONPROFIT
25.2.1 Ensure your financial records are properly
documented and explain how the
organisation spends and receives its money
or other assets (transactions).
25.2.2 Ensure your organisation correctly records
and explains your organisation’s financial
position and performance.
25.2.3 Allow for true and fair statements be
prepared and audited by an auditor firm.
Smaller nonprofits can prepare a profit or
loss account (Statement of Affairs).
25.2.4 Ensure operational records are kept in ways
that show your organisation is operating as a
nonprofit and is meeting its obligations under
the part F of CAMA and other regulations
such as FIRS act, AML/CFT act.
25.2.5 Records are to be kept for 6years following
which it can be destroyed. We encourage
you to check that your organisation has
no record keeping obligations to donors/
founders beyond 6 years before records are
destroyed.
Clause 849: Annual Returns.
- The trustees of the corporation shall not
earlier than 30 June or later than 31 December
each year (other than the year in which it is
incorporated), submit to the Commission a
return showing, among other things, the namePage-20
of the corporation, the names, addresses and
occupations of the trustees, and members of
the council or governing body, particulars of
any land held by the corporate body during the
year, and of any changes which have taken place
in the constitution of the association during the
preceding year.
- The return referred to in subsection (1) of this
section shall be accompanied by the audited
statement of accounts the corporate for the year
of return.
- If default is made in complying with this section,
the corporate body shall be liable to a penalty
as may be prescribed by regulation from time to
time.
NNNGO’S RATIONALE
Nonprofits have an ongoing obligation to report to
CAC by submitting their annual returns and annual
financial report (audited) by 30th June or later
than 31st December every year. i.e. the report is
due within six months to the end of your reporting
period if your organisation operates on a January December financial year. The submission of annual
returns helps the CAC to ascertain that you are still
in operations and that your activities are still in line
with your object.
KEY OUTCOMES FOR NONPROFIT
26.1 The nonprofit makes sure its activities are
reported to CAC and that it stays registered
as a nonprofit.
How to achieve this
26.2.1 Ensure the organization has systems and
processes in place for reporting and filling its
annual returns or information with CAC.
Please visit https://bit.ly/2TvrIWG for a sample.
CHAPTER 7 - MERGER AND DISSOLUTION
Clause 850: Merger of Associations.
- Two or more associations with similar aims
and objects may merge under such terms
and conditions as may be prescribed by the
Commission from time to time.
NNNGO’S RATIONALE
Nonprofit mergers are becoming a common trend
in developed countries and are now a topic of
discussion among nonprofit leaders, boards and
funders. Mergers provide an avenue to preserve and
strengthen needed services provided by nonprofits
to communities. The part F of CAMA recognizes
mergers, paving the way for nonprofits with similar
objects and aims to merge under terms and
conditions prescribed by CAC.
Lessons from studies/research have shown that
mergers improve the image, reputation and public
support for nonprofits, increases financial stability
and efficiency of operations. Mergers might also help
address issues of duplication of efforts and avoiding
solvency.
With the difficult economic climate, the funding
terrain for nonprofits is adversely affected,
we anticipate an increase in the consideration
for mergers by nonprofits to develop greater
organisational efficiencies relating to programming,
administrative capacity and financial sustainability.
KEY OUTCOMES FOR NONPROFIT
27.1 Nonprofits considering mergers now have a
legal framework for merging.
27.2.1 Ensure mergers are championed by the
founder with buy-in from both the executive
leadership and board of both organisations.
27.2.2 Ensure organisations considering a merger
have shared similar vision and mission.
27.2.3 Identify potential mutual gains that could be
realised in the merger.
27.2.4 Make use of experts in the merger process
as they bring specialized knowledge on what
the structure of the emerging organisation,
function and legal aspect of the merger might
look like.
27.2.5 Ensure your funders are involved throughout
the merger process, giving them the
opportunity to give input into the plan and
process of merger.
Clause 851: Dissolution of a Corporate Body
Formed under this Bill.
- A body corporate formed under this Part of this
Bill may be dissolved by the court on a petition
brought for that purpose by:
- the governing body or council; or
- one or more trustees; or
- members of the association constituting
not less than 50 per cent of the total
membership; or
- the Commission.
- The grounds on which the body corporate may
be dissolved are:
- that the aims and objects for which it was
established have been fully realised and no
useful purpose would be served by keeping
the corporation alive;
- that the body corporate is formed to exist
for a specified period and that period has
expired and it is not necessary for it to
continue to exist;
- that all the aims and objects of the association
have become illegal or otherwise contrary to
public policy;
- that it is just and equitable in all the
circumstances that the body corporate
dissolved; and
- that the certificate of registration of the
association has been withdrawn or cancelled
or revoked by the Commission.
- At the hearing of the petition, all persons whose
interest or rights may, in the opinion of the court,
be affected by the dissolution shall be put on
notice.
- If in the event of a winding up or dissolution
of the corporate body there remains after the
satisfaction of all its debts and liabilities, any
property whatsoever, the same shall not be paid
to or distributed among the members of the
association, but shall be given or transferred to
some other institutions having objects similar to
the objects of the association, such institutions
to be determined by the members of the
association at or before the time of dissolution.
- If effect cannot be given to the provisions of
subsection (4) of this section, the remaining
property shall be transferred to some charitable
object.
NNNGO’S RATIONALE
The law provides information on how nonprofits
can be dissolved, helping to guard against abusive
or excessive use of laws on nonprofits thereby
ensuring the sectors right to freedom of association
and assembly. The law further provides ground on
which nonprofits can be dissolved. This aspect of the
law safeguards the nonprofit sector and especially
nonprofits working on rights related issues who are
to susceptible possible donors.
KEY OUTCOMES FOR NONPROFIT
28.1 Nonprofits can only be dissolved by the
court through a petition by its Board,
members of association (50%) or the CAC.
28.2.1 In cases of unlawful shut down by
government be sure each Board members
and staff understands the process and
grounds for dissolving a nonprofit.
28.2.2 In case the organization wants to wind down,
because it has met its objectives, the board
must take lead in winding the organization
down.