The Law does not expect a man to be prepared to
defend every act of his life which may be suddenly
and without notice alleged against him
10 Carstens Road, Kamma Ridge, Port Elizabeth
(t) 041 371 3555
(f) 086 550 5140
(e) Law@ASwart.co.za
Nonprofit Registrations
Our firm is proficient in assisting entities with registering as ‘Nonprofit Organisations’ (commonly referred to as NPO’s).
An NPO is defined, in terms of Section 1 of the Nonprofit Organisations Act, 1997 (Act No. 71 of 1997) as a Trust, Company or other Association of persons established for a public purpose and of which its income and property are not distributable to its members or office bearers except as reasonable compensation for services rendered. Typical examples include Churches, schools and welfare organisations.
If organisations do not already have a ‘Constitution’ in place – which is required by the Nonprofit Directorate and Receiver of Revenue -
Organisations can also register as ‘Public Benefit Organisations (PBO)’ and qualify for Income Tax Exemption due to the nature of their work.
It is no longer a requirement that an organisation registers in terms of the
NPO Act in order to qualify for PBO approval under the Income. However, if an
organisation commits an offence under the NPO Act, SARS may withdraw that
organisation’s PBO approval.
The main reason why organisations might consider registering as a Public Benefit Organisation, is that PBO’s are entitled to the following tax benefits:
- Certain receipts (mainly derived from Donors) are exempt from income tax.
- Donors prefer organisations to be registered as PBOs.
To qualify for registration as a PBO, organisations must have as their primary objective, one or more of the following Public Benefit Activities listed in Part 1 of the Ninth Schedule to the Income Tax Act:
- Welfare and Humanitarian
- Health Care
- Land and Housing
- Education and Development
- Religion, belief or philosophy
- Cultural
- Conservation, environment and animal welfare
- Research and consumer rights
- Sport
- Providing of funds, assets or other resources
Our firm is skilled in assisting organisations, meeting the requirements, to register as Public Benefit Organisations and with applying for their Income Tax Exemption Status from the South African Revenue Services (‘SARS’)