What is a Non-profit company?
A non-Profit Company is a company that is incorporated for a public benefit or other object as required by Item 1(1) of Schedule 1 of the Companies Act. Its income and property are not distributable to its incorporators, members, directors, officers or persons related to any of them, except as reasonable compensation for service rendered. Three (3) persons and 3 directors may form an NPC.
- They are incorporated for a “public benefit purpose”.
- Income and property may not be distributed to the incorporators, members, directors or officers of a non-profit company, except for reasonable compensation for services rendered by them.
- The name of a non-profit company will end with “NPC”.
- A minimum of three persons, called incorporators, must complete and sign the MOI.
- A minimum of three directors must be appointed.
- All of a non-profit company’s assets and income must be used to advance its stated objectives, as set out in its MOI.
- Non-profit companies are subject to a varied application of the Act, as set out in section 10.
- A special set out fundamental rules for non-profit companies is set out in Schedule 1 of the Companies Act, 2008.
- According to these rules, the objects of non-profit companies remain subject to the current principles. Furthermore, on their dissolution, non-profit companies are restricted in terms of the distribution of any residual assets. These special rules also include various other matters unique to non-profit companies.