The Public Benefits Organizations Act, 2013 now operational (and NGO Coordination Act repealed)
A new law for non-profit organizations in Kenya just kicked in on May 14th, 2024. The new law (Public Benefit Organisations Act, 2013) replaces the older 1990 law (NGO Coordination Act) that dealt with how NGOs register and operate in the country.
Understanding the New Act for Public Benefit Organisations (PBOs) in Kenya
The new Act is designed to create a clear framework for setting up and running Public Benefit Organisations (PBOs) in Kenya.
But what exactly is a PBO?
Defining a PBO
A PBO is a group of individuals or organisations that:
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- Is independent and makes its own decisions
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- Is not aligned with any political party
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- Does not aim to make a profit
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- Operates locally, nationally, or internationally
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- Focuses on activities that benefit the public in areas specified by the Act
- Is officially registered with the Public Benefit Organisations Regulatory Authority (the “Authority”)
A New Era for NGOs
With the commencement of the new Act, the old Non-Governmental Organisations Co-ordination Act, 1990, which previously governed the registration and coordination of NGOs in Kenya, is repealed. This marks a significant shift in the way PBOs are regulated and operated in the country.
NGOs: Don’t Miss the Deadline to Register as PBOs
If you’re an NGO registered under the NGO Coordination Act, you’re in luck. You’re automatically considered registered as a Public Benefit Organization (PBO) under the Act. However, you still need to take action to formalize your PBO status.
The Clock is Ticking
You have up to one year from the Commencement Date (14th May 2024) to seek registration as a PBO. This is a crucial step to maintain your PBO status and continue enjoying the benefits that come with it.
Exempted NGOs: Don’t Wait
If your NGO was exempt from registration under the NGO Coordination Act, you have a shorter window of three months from the Commencement Date to apply for registration as a PBO. Don’t delay, as failure to register within this timeframe will result in the loss of your PBO status.
Don’t Lose Your PBO Status
Remember, registration as a PBO is not automatic, even if you’re already registered as an NGO. You must take proactive steps to register within the specified periods to avoid losing your PBO status. Mark your calendars and take action today to ensure your NGO continues to thrive as a PBO.
The Importance of Registration for Public Benefit Organisations (PBOs) in Kenya
To enjoy the benefits of being a Public Benefit Organisation (PBO) in Kenya, registration is a must. No organisation registered under any other law in Kenya can simultaneously be registered as a PBO. In fact, if an organisation is already registered under another law, its registration as a PBO will supersede the previous registration, making the old one invalid.
How to Register
To register, you’ll need to submit, among others, your organisation’s constitution, founders’ details, physical and postal addresses, information on public benefit activities, and the required fee. The Authority will then review your application and either approve it, issue a registration certificate, or reject it with written reasons.
A lawyer conversant with the procedure can help you.
Exclusive Benefits for Registered PBOs
Registration is crucial for PBOs to enjoy associated benefits and operate legally in Kenya. Only registered PBOs can claim PBO status. Registered PBOs can enjoy benefits like tax exemptions, direct government financing, and preferential treatment in public procurement procedures.
International Organisations: Special Requirements
International organisations intending to operate in Kenya must apply to the Authority for a certificate to operate in the country. They must ensure that at least one-third of their directors are Kenyan citizens residing in Kenya and maintain an office in Kenya.
The Authority may exempt an international organisation from registration and instead issue a permit to operate in Kenya, provided it doesn’t intend to engage in direct implementation of activities or programs in Kenya.
Your PBO Registration Certificate: What It Means
Once your public benefit organization (PBO) is registered, the Authority will issue a certificate of registration in the prescribed form. This certificate serves as conclusive proof that your PBO is authorized to operate throughout Kenya, as outlined in your constitution or the certificate itself.
A certificate of registration is conclusive proof that your PBO has met all registration requirements, is duly registered under the Act, is a body corporate, and is authorised to operate throughout Kenya as specified in its constitution or certificate.
Perpetual Existence
Your registered PBO will retain its registration until it’s cancelled, deregistered, or wound up. As a registered PBO, you’ll have a separate legal identity, known as a body corporate, which means you’ll have perpetual succession. This allows your PBO to:
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- Sue and be sued in its own name
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- Acquire, hold, and dispose of movable and immovable property
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- Enter into contracts
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- Perform all necessary actions to fulfill its functions
In essence, your PBO will have the legal capacity to operate independently and make decisions on its own behalf.
Regulations Under the Public Benefit Organisations Act
The Cabinet Secretary, in consultation with the Authority, has the power to make regulations to facilitate the implementation of the Act. These regulations will cover important aspects such as the classification of PBOs, the regulation of organisations issued with a permit to operate in Kenya, and the procedure for tracing and safeguarding assets upon cancellation of a certificate of registration, or deregistration or winding up of a PBO.
However, as of the date of this article, the regulations under the Act are yet to be published. Such regulations will provide clarity on the registration process.
Should you be interested in more details, feel free to reach out to MMTK Law.
Remember: The above is not specific legal advice for you. Always consult a lawyer to determine the best option for your specific situation
info@mmtklaw.com | +254 700 720011