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This article explains how non-profit organizations can register as incorporated trustees in Nigeria. Not all legal corporations or organizations are business oriented and exist to make profits. Some non-profit-oriented organizations exist to serve public purposes instead of personal interests or gains. Such organizations are usually classified and registered as companies limited by guarantee or as incorporated trustees.
What are Incorporated Trustees?
Incorporated Trustees are non-business or non-profit organizations formed by a community of persons or an association. A community of persons are people bound by similar custom, religion, kinship, or nationality while an association is any organization established for any religious, educational, literary, scientific, social, development, cultural, sporting, or charitable purpose1.
The organization appoints two or more persons as trustees who hold and administers the organization’s property in trust on behalf of the organization. The organization is usually registered upon the authorization of its members. Where registration is done, it is not the organization that becomes a corporate body, but the appointed trustees of the organization.
Non-profit organizations or non-governmental organizations like charities, foundations, research institutes, etc. which seek to serve a social, political, or humanitarian cause focus their activities on improving the welfare of a selected group, based on the specific group targeted by the organization. Since non-profit organizations or non-governmental organizations are formed for humanitarian or charitable purposes, they qualify to be registered as incorporated trustees.
How to Register as Incorporated Trustees in Nigeria
Corporate Affairs Commission (CAC) is the regulatory body responsible for registering Incorporated Trustees. CAC is empowered by the Companies and Allied Matters ACT 2020.
Any organization seeking to be registered as Incorporated Trustee will apply to the Corporate Affairs Commission (CAC).2 The Commission prescribes-
- A form for registration that states the following:
- the name of the proposed corporate body, which must contain the words “Incorporated Trustees of xxx”
- the aims and objectives of the association/organization.
- the names, addresses, and occupations of the secretary of the association/organization (if any).
- Attachment of the following to the form:
- two printed copies of the constitution of the association/organization. The constitution of an association is a document showing how the affairs of the association will be managed.
- signed copies of the minutes of the meeting appointing the trustees and authorizing the application showing the people present and votes scored.
- the impression or drawing of the proposed common seal, if there is one. A common seal is an official seal of a company used to prove that executed legal documents are authentic.
- Signature of the application by the person applying.
- A declaration or other evidence verifying the statement and particulars in the application (this requirement is not compulsory, but is subject to CAC’s request).
- Where the application process listed above is duly complied with, the application will be published in two daily newspapers circulating in the area of the association. One is usually a local newspaper and the second a national newspaper.
This advertisement in the newspaper aims to create public awareness and invite objections to the registration of the association/organization by members of the public. Any objection to the registration of the association/organization must be made within 28 days of the date of the last publication in the newspaper. Where there is an objection made and information provided to that effect, the Commission has the right to accept or reject the objection after considering all the information. Where there is no objection or the Commission rejects the objection, the Commission shall approve the application, register the trustees as a corporate body and issue a certificate in the prescribed form.
Who is responsible for the newspaper publication during the registration process of incorporated trustees?
The responsibility to publish the application in the newspapers rests with the intending trustees or the applicant(s). However, the Registrar-General of the Corporate Affairs Commission, Alhaji Garba Abubakar has stated CAC’s intention to take over the newspaper publication in order to promote transparency in the registration process.3
Effect of Registration as Incorporated Trustees in Nigeria4
When an organization is registered as an incorporated trustee, it becomes a corporate body with its own legal identity and right and shall have:
- perpetual succession – this means that the organization continues for life and can outlive its founders. The existence of the organization is not threatened by death, bankruptcy, insanity, etc. it can only be legally dissolved.
- a common seal if they wish to.
- the power to sue and be sued in its corporate name.
- they have the power to hold, acquire, transfer, assign and dispose of any property or interests belonging to or held for the benefit of such organization.
Disqualification of Trustees in Nigeria5:
Not everyone is qualified to be appointed as a trustee of a non-profit organization. Anyone who falls within the category listed below is disqualified from being appointed:
- an infant – an infant is anyone below the age of 18.
- a person acknowledged by the court to be of unsound mind.
- an undischarged bankrupt.
- a person convicted of an offence involving fraud or dishonesty within five years of his proposed appointment.
Can Foreigners be Incorporated as Trustees in Nigeria?
Foreigners are not prevented from becoming trustees as CAMA makes no provision that limits trusteeship to only Nigerians. The categories of people prevented from being appointed as trustees are those disqualified in line with the provisions of CAMA as listed above.
However, Incorporated Trustee falls under the category of corporate organizations and any foreign participation must be in line with the regulatory requirements necessary for a successful application and registration. In line with The Nigeria Immigration Service, a foreigner who seeks to be incorporated as a trustee in Nigeria must:
- obtain a visa – this grants foreigners entry and exit permission into Nigeria. The most suitable type of visa is the Subject to Regularization (STR) Visa,6 as it allows foreigners to take up employment in Nigeria in line with Section 8(1) of the Immigration Act 2015.
- obtain a Combined Expatriate Residence Permit and Aliens Card (CERPAC) – this is a valid residence permit given to foreigners which allows them to live and work in Nigeria for up to two years and is subject to renewal.7
The registration of non-business or non-profit organizations like charity foundations, churches, clubs, etc. as incorporated trustees is not compulsory. However, registration renders legal benefits to such organizations, gives the organization public credibility, and aids the smooth operation of its aims and objectives.
1 Section 823(1) Companies and Allied Matters Act 2020
2 Section 825 Companies and Allied Matters Act 2020
3 Section 830 Companies and Allied Matters Act 2020
4 Section 826 Companies and Allied Matters Act 2020