Since 31st October 2018 when the Ministry of Health, Community Development, Gender, Elderly and Children issued a public statement calling among other things the Non-Governmental Organizations(NGOs) registered by other authorities such as BRELA, RITA to apply for a certificate of compliance to the registrar of NGOs there have been controversial opinions from various stake holders.
Among the prevailing issues were the following
(a) What would be the status of first registration prior to obtaining certificate of compliance?
(b) The definition of an NGO was narrow
(c) The Definition of a company was narrow
THE PROPOSED AMENDMENT
The Government has come with the bill (The Written Laws (Miscellaneous Amendment ) Act No.3/2019) aiming at amending various provisions of the Companies Act, NGOs Act, Trustees Incorporation Act, the Societies Act and other relevant laws to address the aforesaid legal challenges.
Section 2 of Companies Act has been amended and the definition of Company has been well elaborated to mean the company formed under the Companies Act for the purpose of investment, trade and commercial activities.From the wording of that definition it means that a company limited by guarantee carrying out NGOs activities is no longer a company within the meaning of Companies Act.
Furthermore the NGOs Act has been amended by section 2 by strictly excluding all entities registered under other laws such as companies(company limited by guarantee), trust, societies, trade unions, political parties e.t.c
COMPANIES THAT OBTAINED CERTIFICATE OF COMPLIANCE TO BE STRUCK OFF THE REGISTER:
The proposed amendments provide that, all companies, companies limited by guarantee which have obtained the certificate of compliance under section 11 of NGOs Act, shall be struck off the Register of Companies after two months since the coming into force of the proposed law.
POWER TO STRIKE OFF A COMPANY
The proposed amendments have empowered the Registrar of Companies under section 400A of the Companies Act, to strike off any company conducting business contrary to the law. We are of the opinion that through this section most of the companies limited by guarantee conducting NGOs activities without obtaining a Certificate of Compliance under NGOs Act, may be contravening the Companies Act and NGOs Act hence liable to be struck off from the Register of Registrar of Companies.
REGISTRAR OF NGOs AND LAW ENFORCEMENT
The Registrar of NGOs has been empowered to inspect and asses any entity operating as an NGOs. The Registrar has been afforded escort by law enforcement agencies in discharging his duties.
RENEWAL OF CERTIFICATE
The proposed amendments of the NGOs Act direct that the certificate of registration under the Act shall be valid for 10 years subject to renewal. The application for renewal shall be made six months before expiry of the same.
Victory Attorneys International NGOs and Good Governance Unit handles all matters relating to NGOs. For more clarification, contact us at [email protected]