Company, shareholder and founding instruments · 03
Non-profit constitution and NPC founding documents
Creates a legal person that exists for its objects rather than for its members, in the form two regulators will accept.
Creates a legal person that exists for its objects rather than for its members, in the form two regulators will accept.
For registration under the Nonprofit Organisations Act: the name; the objects; that the organisation exists in its own right, separate from its members; that income and property are not distributable to members except as reasonable compensation for services; the powers of the governing body; meeting and quorum rules; financial and record-keeping obligations; the amendment procedure; and a dissolution clause transferring remaining assets to a body with similar objects.
An organisation that also wants public benefit organisation approval and section 18A donor-deduction status from SARS needs specific additional clauses — and retrofitting them later means amending the constitution and going back to two regulators. Build for PBO approval at the outset even if the application comes later. Watch also for a governing body of three consisting of the founder, the founder’s spouse and the founder’s accountant: SARS requires three unconnected persons.
The law it sits under
What governs this instrument.
A non-profit company is incorporated under Schedule 1 to the Companies Act 71 of 2008, which restricts the application of its income and property to its stated objects. Registration under the Nonprofit Organisations Act 71 of 1997 is separate and voluntary, and section 18 of that Act sets what the constitution of a registered NPO must contain. Tax exemption under section 30 of the Income Tax Act is a third, distinct step with its own founding document requirements.
Related pages, tools and documents
Where this instrument sits in the wider set, and the engagement that produces it.
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