Question

currently do we have registration of foundations allowed in kenya?

Answer 1

Non-profit organizations are registered either under the Company Act, 2015 through the Business Registration Service (BRS) and is overseen by the Company Act and other governing laws or under the Public Benefits Organisations Act and is overseen by the NGO Coordination Board.

To register under the Company Act through the BRS as a company limited by guarantee is the most preferred way as it is efficient, less costly and has less requirements in terms of process and procedure.

A. Procedure for Registration under Company Limited by Guarantee.

1. 1. Name and Reservation.
      • Identify name of the foundation, the BRS requires one to propose 3 names of the foundation in order of preference.
      • Conduct a Name Search on the BRS to Ensure the proposed name for the non-profit is unique and not already registered by another entity.
      • Do a Name Reservation, which the name is reserved for less than 30 days
      • The name is letter approved and after which one should proceed with the registration process.
   2. Draft the Memorandum and Articles of Association
      • It’s important to have MEMATs which clearly state that that the company is limited by guarantee.
      • It should also outline the objectives of the non-profit, which should be charitable, educational, scientific, or related to other non-profit purposes.
      • Specify the individuals or entities who guarantee to contribute a nominal amount towards the assets of the company in the event of its winding up.
      • The Articles of Association which are the rules governing the internal management of the company, including the appointment of directors, the holding of meetings, and the distribution of assets upon dissolution.
      • Special Clauses, include clauses that prohibit the distribution of profits to members and specify that all assets and income are to be applied solely towards the promotion of the company’s objectives.
   3. Incorporation Documents
      • Form CR1 Application for Registration), the primary application form for registering the company. Includes the company’s name, registered office, objectives, and details of the directors and guarantors.
      • Form CR2(Memorandum of Guarantee), to formally declare the guarantee by the members, specifying the amount they will contribute in the event of winding up.
      • Form CR8(Notice of Registered Office), declares the physical address of the company’s registered office, which must be within Kenya.
      • Form CR7(Notice of Appointment of Directors and Company Secretary), Provides details of the initial directors and the company secretary.

Directors to provide;

1. 1. • ID Number/ Passport Number
      • KRA PIN;
      • recent colour photo;
      • Residential address – must include road, estate, and house number;
      • Phone number;
      • email address; and
      • Postal address.

 

1. The forms in 3 above will be filled and signed and uploaded together with the Articles of Association
2. Vetting of the documents submitted and the director details by National Intelligence Service- this takes place within 21 days.
3. If vetting is successful, the BRS system will provide a CR3 signed by NIS, and thereafter we shall provide the statement of guarantee.
4. Once we provide the statement of guarantee, BRS will complete the process and issue the certificate of incorporation

B. Certificate of Incorporation
Certificate is Issued within 45-60 days, indicating that the non-profit is officially registered as a Company Limited by Guarantee together with the registration number.

C. Post-Incorporation Compliance -We Can Assist The Company To;

• Register for a PIN, for tax purposes, then subsequently apply for tax-exempt status later.
• Apply for Tax Exemption(if applicable):
• Open a Bank Account
• Annual Returns
• Financial Audits

Answer 2

HOW TO REGISTER A CHARITABLE TRUST OR FOUNDATION IN KENYA.

A foundation is a type of non-profit organization that is usually established to provide funding and support for charitable, educational, religious, or other philanthropic purposes. Foundations are often endowed with a significant amount of financial resources, and they use the income generated from their endowments to fund projects and initiatives aligned with their mission.

Private charitable foundations in Kenya are mainly incorporated as companies limited by guarantee because the owners enjoy the benefit of limited financial liability. Such foundations are also granted income tax and other tax exemptions on application.

A charitable foundation under Kenyan laws can be established either as:(a) a company limited by guarantee; or (b) a charitable trust.

1.  Incorporation of company limited by guarantee

 A company limited by guarantee under the Kenyan Companies Act can be incorporated either with or without share capital. However, in most cases companies limited by guarantees are incorporated without share capital. A company limited by guarantee maybe a private company or a public company. A private company must have a minimum of 2 and a maximum of 50 members. On the other hand, a public company must have a minimum of 7 members but there is no statutorily prescribed maximum number of persons.

Private companies enjoy a number of privileges including an exemption from the requirement to file annual accounts at the Companies Registry. Although incorporation of a company limited by shares in Kenya is a relatively straight-forward process, incorporation of charitable companies is a lengthy process due to security verifications that are conducted against the promoters of such a company before incorporation.

Procedure of incorporation

 A summary of the information required for the purposes of incorporation are set out below;

1. An application is made to reserve the proposed name with the Registrar. The Registrar has the right to reject names he considers undesirable or which are similar to the names of existing companies. It is therefore advisable to apply for 2 or 3 alternative names. The name must include the word “Limited”. However, this requirement can be dispensed in case of charitable companies (essentially companies limited by guarantee)
2. Preparation of the Memorandum and Articles of Association of the company. The Memorandum sets out the objects of the company in detail. In the case of companies limited by guarantee, the Companies Act require the memorandum of association to state the minimum amount which each member guarantee to contribute to the assets of the companies in the event of liquidation and this amount is left at the discretion of the promoters. It is necessary to set out all the anticipated activities of the company as part of its main objects of association. The Articles will contain the regulations for conducting the company’s affairs. It will be necessary to consider various matters including: the size of the board of directors, the quorum for meetings of members and directors, whether the directors are subject to retirement by rotation, any special rights conferred on members to appoint directors etc.
3. The Memorandum and Articles of a private charitable company must be signed by at least 2 persons who state the minimum amount they undertake to contribute in the event of liquidation of the company.
4. The Memorandum and Articles and a Statement of the Nominal Capital are then lodged for stamping with duty.
5. After stamping, the documents are presented to the Registrar of Companies together with the following prescribed forms:
6. (a) Particulars of the registered office. The full physical and postal address of the registered office must be supplied. This includes the land reference number.  
7. (b) Particulars of the directors and company secretary including their full names, usual postal address, nationality and business occupation. It is usual to have a minimum of 2 directors. There are no unusual restrictions as to who may be appointed a director. In particular, there is no requirement that a director be a resident or citizen of Kenya. Companies may also act as directors.
8. (c) A Declaration of Compliance by the advocate attending to the incorporation of the company.
9. For companies limited by guarantee, the documents are usually forward to the Director of National Intelligence Service in order to carry out further investigation and inquiries on the objects of the proposed company. This process may take 2 to 3 months and if the National Intelligence Service approves the incorporation of the proposed company, these documents are sent back to the Registrar of Companies for incorporation.
10.  Incorporation is complete when the Registrar issues a Certificate of Incorporation which must be displayed at the registered office. At this stage, the Attorney General will usually exempt the company from using the word “limited” as part of its name.

b. Incorporation of a foundation under the Trustees (Perpetual Succession) Act

 Under the laws of Kenya, a foundation can be incorporated under the Trustees (Perpetual Succession) Act (Chapter 164 of the Laws of Kenya). Section 4(1) provides that Trustees who have been appointed by any body or association of persons established for any religious, educational, literary, scientific, social, athletic or charitable purpose, or who have constituted themselves for any such purpose, may apply to the Minister for a certificate of incorporation of the trustees as a corporate body.

The registration requirements of a charitable trust or a foundation in Kenya generally requires the following:

1. Name of the Trust or Foundation.
2. Main Objective of the Trust. A charitable trust must fall in at least one of the following categories: Advancement of religion; Advancement of Health or saving of lives; Advancement of environmental protection or improvement; Advancement of education; Advancement of Health or saving of lives; Advancement of environmental protection or improvement; Relief of poverty e.g. homes & orphanages, hospitals; Trusts beneficial to the community not falling under the preceding heads e.g. advancing art, culture, racial harmony.
3. Name of the Settlor/ Donor. (Specify if donor is an individual or company, local or foreign) including Full name, copy of ID card/passport; If company, a copy of the certificate of registration; Address; Domicile and residence; Nationality; Occupation; Number of Shares in the Trust; KRA PIN;ID number; Passport photo.

4. Beneficiaries: These could be a class of persons in the society such as widows, orphans and vulnerable children, bright children from poor backgrounds etc. There is also need to specify the area of benefit e.g. Nairobi, Kenya or Africa
5. Trust Fund: A list of assets held by the trust/ in the absence a deed of donation indicating the properties to be donated to the trust; A letter/statement from the donor stating his/her commitment and the transfer of properties/ funds may be progressive but indicate the initial amount/properties to be transferred.
6. Trustees: The trustees should show competence in running the trust.

       The following information is required from the trustees:

• Names and addresses in full of the persons to act as trustees.
• Passport photos of the trustees
• Copies of KRA PIN certificates of Trustees
• Copies of national ID or Passport.
• Curriculum vitae of the trustees.
• Statement of their accounts.
• Minutes appointing the trustees.
• Petition to the minister.
• Seal of the trust.
• Statement of donor funding where applicable.
• Financial statement of the trust or foundation.

7. Administration of the Trust: Additionally, it is important to consider whether standard procedures are appropriate or if there are any special administrative procedures required.

Below are the Administrative procedures in the registration of a foundation:

• Appointment of trustees.
• Operation of Trust accounts.
• Powers of the trustees.
• Procedure of conducting meetings.
• Amendment of the Trust deed.

 Registration of a charitable trust may involve two stages:

        a. Registration under the Registration of Documents Act(RDA)

Registration under the RDA does not make a trust into a body corporate. However, the trust can commence implementing    the objects of the trust as a simple trust.

        b. Incorporation under the Trustees (Perpetual Succession) Act (TPSA)

After registration under the registry of documents, a certified copy of trust deed and a petition for incorporation is lodged with the Ministry of Lands for incorporation of trust. The Trust may be incorporated under the TPSA, making it a body corporate.

Answer 3

Registration of a Foundation in Kenya

Introduction

A foundation is a non-profit organization established to support a specific cause or purpose. In Kenya, foundations are typically registered under the Companies Act or the Societies Act. The process of registering a foundation in Kenya is relatively straightforward, but it requires careful planning and adherence to legal requirements.

Table of Contents

1. Legal Framework

2. Types of Foundations

3. Registration Process

4. Requirements for Registration

5. Post-Registration Obligations

6. Case Laws

7. Conclusion

8. TLDR

1. Legal Framework

The legal framework governing the registration of foundations in Kenya is primarily found in the following Acts:

• The Companies Act, 2015: This Act provides the legal framework for the incorporation and regulation of companies in Kenya, including charitable foundations.

• The Societies Act, 1990: This Act governs the registration and regulation of societies in Kenya, including non-profit organizations like foundations.

• The Public Benefits Organizations Act, 2013: This Act provides a comprehensive framework for the regulation of public benefit organizations, including foundations, and aims to promote transparency and accountability in their operations.

2. Types of Foundations

In Kenya, foundations can be broadly categorized into two types:

• Private Foundations: These are foundations established by individuals or families for charitable purposes. They are typically funded by private donations and operate independently of government control.

• Public Foundations: These are foundations established by the government or with significant government funding. They are typically involved in public welfare activities and are subject to government oversight.

3. Registration Process

The registration process for a foundation in Kenya involves the following steps:

1. Preparation of the Trust Deed: This document outlines the foundation's objectives, governance structure, and operational procedures. It should be drafted by a qualified legal professional.

2. Name Reservation: The proposed name of the foundation must be reserved with the Registrar of Companies or the Registrar of Societies, depending on the chosen registration route.

3. Submission of Application: A completed application form, along with the required documents, must be submitted to the relevant registrar.

4. Verification and Approval: The registrar will review the application and supporting documents to ensure compliance with legal requirements.

5. Issuance of Certificate of Incorporation or Registration: Upon approval, the registrar will issue a certificate of incorporation or registration, which officially recognizes the foundation as a legal entity.

4. Requirements for Registration

The specific requirements for registering a foundation in Kenya vary depending on the chosen registration route (Companies Act or Societies Act). However, some common requirements include:

• Name of the Foundation: The name should be unique, descriptive of the foundation's purpose, and not already in use by another organization.

• Objectives of the Foundation: The foundation's objectives should be clearly stated and should be charitable in nature.

• Governance Structure: The foundation's governance structure should be clearly defined, including the roles and responsibilities of the board of directors or trustees.

• Membership: The foundation may require a minimum number of members or trustees, depending on the chosen registration route.

• Financial Information: The foundation must provide financial information, including a proposed budget and sources of funding.

• Constitution or Trust Deed: The foundation must submit a constitution or trust deed outlining its rules and regulations.

• Memorandum and Articles of Association: If registering under the Companies Act, the foundation must submit a memorandum and articles of association.

• Registration Fee: A registration fee is payable to the relevant registrar.

5. Post-Registration Obligations

Once registered, foundations in Kenya have certain post-registration obligations, including:

• Annual Reporting: Foundations must submit annual reports to the relevant registrar, detailing their activities, financial performance, and governance practices.

• Compliance with Laws: Foundations must comply with all applicable laws and regulations, including tax laws, labor laws, and environmental laws.

• Transparency and Accountability: Foundations are expected to operate transparently and be accountable to their stakeholders, including donors, beneficiaries, and the public.

• Auditing: Foundations may be required to undergo regular audits to ensure financial transparency and accountability.

6. Case Laws

Several case laws in Kenya have addressed issues related to the registration and operation of foundations. Some notable cases include:

• The National Gay and Lesbian Human Rights Commission (NGLHRC) Case (2023): In this landmark case, the Kenyan Supreme Court ruled that the NGLHRC, an organization advocating for the rights of LGBTQIA+ individuals, must be allowed to register as a non-governmental organization (NGO). This decision affirmed the right to freedom of association and the right to form organizations for charitable purposes, regardless of sexual orientation or gender identity. (Source: )

• The Atheists in Kenya Society Case (2016): In this case, the High Court ruled that atheism is a constitutionally protected freedom and fundamental right. This decision has implications for the registration of organizations promoting atheism or secularism, as it affirms the right to freedom of belief and expression, even if those beliefs differ from traditional religious views. (Source: )

7. Conclusion

Registering a foundation in Kenya is a process that requires careful planning and adherence to legal requirements. By understanding the legal framework, types of foundations, registration process, and post-registration obligations, individuals and organizations can establish foundations that contribute to the betterment of society while operating within the bounds of Kenyan law.

8. TLDR

To register a foundation in Kenya, you need to prepare a trust deed, reserve a name, submit an application, and comply with the requirements of the Companies Act or Societies Act. Once registered, foundations have post-registration obligations, including annual reporting, compliance with laws, and transparency.

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Sample Foundation Trust Deed

Trust Deed of the [Foundation Name] Foundation

This Trust Deed is made this [Date] day of [Month], [Year], by and between:

• [Trustee 1 Full Name], residing at [Trustee 1 Address], hereinafter referred to as "Trustee 1";

• [Trustee 2 Full Name], residing at [Trustee 2 Address], hereinafter referred to as "Trustee 2";

• [Trustee 3 Full Name], residing at [Trustee 3 Address], hereinafter referred to as "Trustee 3";

hereinafter collectively referred to as the "Trustees".

WHEREAS:

1. The Trustees desire to establish a charitable foundation to be known as the "[Foundation Name] Foundation" (hereinafter referred to as the "Foundation").

2. The Trustees have agreed upon the terms and conditions of this Trust Deed for the establishment and operation of the Foundation.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter contained, the parties agree as follows:

1. Establishment of the Foundation

1.1. The Trustees hereby establish the Foundation as a charitable foundation under the laws of Kenya.

1.2. The Foundation shall be a non-profit organization dedicated to [State the Foundation's Purpose].

2. Objectives of the Foundation

2.1. The objectives of the Foundation are as follows:

• [List the Foundation's Objectives]

3. Governance of the Foundation

3.1. The Foundation shall be governed by a Board of Trustees consisting of the Trustees named herein.

3.2. The Trustees shall have the following powers and responsibilities:

• [List the Powers and Responsibilities of the Trustees]

3.3. The Trustees may appoint additional trustees as they deem necessary.

3.4. The Trustees shall meet at least [Number] times per year or as often as necessary to conduct the business of the Foundation.

4. Funding of the Foundation

4.1. The Foundation shall be funded by:

• [List the Sources of Funding for the Foundation]

4.2. The Trustees shall manage the Foundation's funds in a prudent and responsible manner.

5. Distribution of Funds

5.1. The Trustees shall distribute the Foundation's funds in accordance with the Foundation's objectives and in a manner that is consistent with the laws of Kenya.

5.2. The Trustees may make grants, donations, or other distributions to charitable organizations or individuals that are consistent with the Foundation's objectives.

6. Dissolution of the Foundation

6.1. The Foundation may be dissolved by a majority vote of the Trustees.

6.2. Upon dissolution, the Foundation's remaining assets shall be distributed to a charitable organization or organizations that are consistent with the Foundation's objectives.

7. Amendments to the Trust Deed

7.1. This Trust Deed may be amended by a majority vote of the Trustees.

8. Governing Law

8.1. This Trust Deed shall be governed by and construed in accordance with the laws of Kenya.

IN WITNESS WHEREOF, the parties have executed this Trust Deed as of the date first written above.

[Trustee 1 Signature]

[Trustee 2 Signature]

[Trustee 3 Signature]