CAC Registration for Nonprofits and Incorporated Trustees

Comprehensive Guide to CAC Registration for Nonprofits and Incorporated Trustees in Nigeria

 

Registering a nonprofit organization or incorporated trustee with the Corporate Affairs Commission (CAC) in Nigeria is a vital step toward gaining legal recognition, building trust with stakeholders, and accessing funding opportunities. This guide explains the entire process, from understanding the requirements to completing your registration efficiently. By the end, you’ll have all the information needed to register your nonprofit or incorporated trustee successfully.

 

For registration of business name, company and incorporated trustees, call or send WhatsApp message to 08155554892.

 

Why Register Your Nonprofit or Incorporated Trustee with CAC?

 

1. Legal Recognition: Registration provides your organization with a legal status, allowing it to operate within the framework of Nigerian law.

 

2. Access to Funding: Many donors, grants, and funding organizations only support legally registered nonprofits.

 

3. Tax Benefits: Registered nonprofits may qualify for tax exemptions under Nigerian tax laws.

 

4. Credibility and Trust: Registration signals professionalism and builds trust with beneficiaries, donors, and the government.

 

 

What is an Incorporated Trustee in Nigeria?

 

An incorporated trustee is a legal structure under the Companies and Allied Matters Act (CAMA) designed for nonprofits, including NGOs, religious bodies, professional associations, and charities. It allows these organizations to hold property, enter contracts, and sue or be sued in their corporate name.

 

Types of Incorporated Trustees in Nigeria

 

Incorporated trustees refer to legal entities formed under Part F of the Companies and Allied Matters Act (CAMA) 2020 in Nigeria. These entities are created for non-profit or charitable purposes and are distinct from business-oriented organizations. Here are the main types:

 

1. Religious Organizations

These include churches, mosques, and other faith-based institutions.

Their purpose is to promote religious practices, teachings, and faith-based initiatives.

Examples: Catholic Archdiocese, Redeemed Christian Church of God, etc.

 

2. Charitable and Humanitarian Organizations

These trustees focus on philanthropic activities, such as providing relief to the underprivileged, promoting education, and advancing healthcare.

Examples: NGOs offering scholarships, free medical aid, or disaster relief.

 

3. Educational Institutions

Schools, colleges, and other academic institutions that operate as non-profit entities fall under this category.

Their primary aim is to advance learning and research.

 

4. Professional Associations

These include bodies formed to regulate and advance specific professions.

Examples: Nigerian Bar Association (NBA), Institute of Chartered Accountants of Nigeria (ICAN).

 

5. Clubs and Societies

These are often formed for social, cultural, or recreational purposes.

Examples: Rotary Clubs, Lions Clubs, or cultural organizations like Igbo Union.

 

6. Community-Based Organizations

These trustees represent communities and promote their welfare, cultural heritage, or development projects.

Examples: Town unions, community development associations.

 

 

Ways of Generating Income for Incorporated Trustees

 

Since incorporated trustees are non-profit entities, their income generation aligns with their goals and ensures compliance with regulatory frameworks:

 

1. Donations and Grants

Source: Individuals, corporate organizations, and international donors.

Example: Churches receiving tithes or NGOs securing international funding for projects.

 

2. Membership Dues and Subscriptions

Source: Members of the organization contribute periodically.

Example: Professional bodies charging annual fees.

 

3. Fundraising Events

Source: Organized programs like charity dinners, auctions, or concerts.

Example: Schools hosting annual bazaars to fund scholarships.

 

4. Endowments and Trust Funds

Source: Wealthy donors set up trusts for a specific purpose.

Example: A philanthropist creating an endowment fund for cancer research.

 

5. Service Charges or Fees

Source: Payment for services rendered, often at subsidized rates.

Example: Hospitals charging for medical services or schools collecting minimal tuition fees.

 

6. Investments

Source: Returns from investments in bonds, mutual funds, or property.

Example: Renting out a conference hall owned by a professional association.

 

7. Merchandising

Source: Selling branded items or products.

Example: Churches selling books, CDs, or religious souvenirs.

 

8. Government and Institutional Support

Source: Subsidies or grants from local or international governments.

Example: NGOs receiving funding from the United Nations or WHO.

 

 

Do Incorporated Trustees Pay Tax in Nigeria?

 

Incorporated Trustees in Nigeria are generally exempt from paying certain types of taxes, but this exemption depends on the nature of their activities and compliance with the law. Here’s an overview:

 

Tax Exemptions for Incorporated Trustees

Under the Companies Income Tax Act (CITA) and other relevant Nigerian tax laws, Incorporated Trustees, such as churches, mosques, NGOs, charities, and educational institutions, may qualify for tax exemptions if they meet the following conditions:

 

1. Non-Profit Status:

The organization must be established solely for religious, charitable, educational, or public-benefit purposes.

Income and property must not be distributed to members or trustees, as explicitly stated in the organization’s constitution or special clause.

 

2. Use of Income:

Any income generated must be used exclusively for the promotion of the organization’s objectives.

Surplus funds cannot be distributed to members or trustees but should be reinvested into the organization’s activities.

 

3. Non-Commercial Activities:

The organization must not engage in profit-making ventures or commercial activities outside its primary objectives. If it does, income from such activities is taxable.

 

Taxes Applicable to Incorporated Trustees

 

Despite the exemptions, Incorporated Trustees may still be required to pay taxes or fulfill other tax-related obligations in the following cases:

 

1. Value Added Tax (VAT):

Incorporated Trustees must pay VAT on goods and services they procure unless specifically exempt under the VAT Act.

 

2. Withholding Tax (WHT):

They are required to deduct and remit WHT when paying contractors, consultants, or suppliers.

 

3. Personal Income Tax (PIT) for Employees:

If the organization employs staff, it must deduct and remit PAYE (Pay As You Earn) tax on behalf of its employees.

 

4. Company Income Tax (CIT):

If the Incorporated Trustee engages in profit-generating activities unrelated to its core objectives (e.g., operating a business), it must pay CIT on income from such activities.

 

5. Capital Gains Tax (CGT):

Tax may apply if the organization sells assets and realizes a profit unless the proceeds are reinvested into its primary objectives.

 

Maintaining Tax-Exempt Status

 

To maintain tax-exempt status, Incorporated Trustees should:

1. Register with the Federal Inland Revenue Service (FIRS):

Even though they may be exempt from certain taxes, they are required to register and obtain a Tax Identification Number (TIN).

 

2. File Annual Returns:

Submit tax returns to the FIRS to show that their income and activities align with their stated objectives.

 

3. Avoid Non-Exempt Activities:

Refrain from engaging in commercial ventures unless they are ancillary to their primary mission.

 

4. Keep Proper Records:

Maintain accurate financial records to demonstrate compliance during audits.

 

Summary

Incorporated Trustees in Nigeria enjoy tax exemptions on income generated directly from their charitable, religious, or public-benefit activities. However, they must comply with tax laws for other obligations, such as VAT, WHT, or taxes on unrelated business activities. Non-compliance can lead to the loss of tax-exempt status.

 

 

Requirements for CAC Registration of Nonprofits and Incorporated Trustees

 

To ensure a smooth registration process, here’s what you’ll need:

 

1. Proposed Name:

The name must be unique and not similar to existing registered names.

Avoid restricted words like “Federal,” “Government,” or “National” unless you have special permission.

Conduct a name availability search on the CAC Public Search Portal.

 

2. Objects of the Organization:

Clearly state the objectives of your nonprofit, such as charity, education, religion, or social impact.

Objectives must align with nonprofit activities.

 

3. Details of Trustees:

Minimum of two trustees is required.

Trustees must be at least 18 years old, sound of mind, and not bankrupt.

Provide the following details: name, address, occupation, and means of identification (e.g., national ID, passport).

 

4. Constitution of the Organization:

Draft a constitution outlining the organization’s governance structure, roles of trustees, mode of operation, and decision-making process.

 

5. Minute of the Meeting Authorizing Registration:

Minutes of the meeting where trustees were appointed and the decision to register was made.

The minutes must show the voting pattern and resolutions passed.

 

6. Registered Office Address:

Provide a physical address for the nonprofit’s head office.

 

7. Public Notice in Newspapers:

Publish a notice of intention to register in two national newspapers, one of which must be a local publication in the state where the organization operates.

 

8. Trustee Declaration:

Each trustee must complete a sworn declaration form, affirming their willingness to act as a trustee for the organization. This is one of the crucial aspects in the registration of incorporated trustee process.

This declaration is usually done before a Commissioner for Oaths or Notary Public and serves as proof of the trustees’ commitment to the organization’s objectives and compliance with CAC regulations. The document must include the full name, signature, and photograph of the trustee. This Trustee Declaration is a critical step in establishing the credibility and accountability of the trustees during the registration process.

 

 

Step-by-Step Guide to CAC Registration for Nonprofits

 

Follow these steps to complete the registration process:

 

Step 1: Reserve Your Name

• Visit the CAC online portal at https://www.pre.cac.gov.ng.
• Conduct a name availability search and reserve your preferred name.

 

Step 2: Prepare Necessary Documents

• Compile all the required documents, including:
• Trustees’ details and means of identification.
• Constitution of the organization.
• Minutes of the meeting authorizing the registration.
• Evidence of public notice publication in newspapers.

 

Step 3: Complete the Online Application

• Registration of incorporated trustee is done online now.
• Log in to your CAC account and fill out the application form for incorporated trustees.
• Upload the required documents in the appropriate sections.

 

Step 4: Pay the Prescribed Fees

Pay the applicable registration fees online through the CAC portal. Fees vary depending on the nature of the nonprofit.

 

Step 5: Submit the Application

After payment, submit your application for review. Ensure all information is accurate to avoid delays or rejections.

 

Step 6: Await Approval

The CAC will review your application and, if all requirements are met, issue a Certificate of Incorporation. This process may take 2–3 months, depending on CAC’s workload. Registration of incorporated trustee process is not complete until you have been issued your Certificate of Incorporation.

 

 

Common Challenges and How to Overcome Them

 

1. Name Rejection:

Solution: Choose multiple name options during the reservation process.

 

2. Incomplete Documentation:

Solution: Double-check all requirements before submission to avoid delays.

 

3. Application Rejection:

Solution: Address errors promptly and reapply with corrected information.

 

 

Benefits of Registering Your Nonprofit with CAC

 

1. Legal Protection: The nonprofit becomes a legal entity, protecting trustees from personal liabilities.

 

2. Public Trust: Registration enhances credibility among donors and beneficiaries.

 

3. Government Support: Registered nonprofits are eligible for government grants and tax exemptions.

 

 

Success Tips for Incorporated Trustees

 

Registration of incorporated trustee is one thing, to succeed in achieving the objectives of the IT is another thing. If you want the IT to succeed, you must pay attention to the following:

 

1. Clarity of Purpose

Define a clear mission and objectives aligned with societal needs.

Ensure all activities reflect these objectives.

 

2. Strong Governance Structure

Maintain a competent Board of Trustees with clear roles and responsibilities.

Ensure accountability and transparency in decision-making.

 

3. Effective Fund Management

Implement sound financial practices to ensure efficient use of resources.

Conduct regular audits and publish financial reports.

 

4. Compliance with Legal and Regulatory Requirements

Register the organization with the Corporate Affairs Commission (CAC).

Adhere to SCUML (Special Control Unit Against Money Laundering) requirements.

 

5. Community Engagement

Foster relationships with the communities you serve.

Regularly update stakeholders on the impact of your work.

 

6. Capacity Building

Train staff and members to enhance skills and organizational efficiency.

Attend workshops and seminars to stay updated on industry best practices.

 

7. Leverage Technology

Use digital tools for fundraising, outreach, and managing organizational activities.

Create a strong online presence through websites and social media.

 

8. Diversified Income Streams

Avoid reliance on a single source of income.

Explore multiple funding opportunities to ensure sustainability.

 

9. Partnerships and Collaborations

Partner with like-minded organizations to expand your reach and impact.

Seek endorsements and affiliations that enhance credibility.

 

10. Transparency and Accountability

Build trust with donors and members by being transparent in financial reporting.

Regularly communicate achievements and challenges.

 

By focusing on these strategies, incorporated trustees can achieve their objectives while maintaining long-term sustainability and credibility

 

Frequently Asked Questions (FAQs)

 

1. How long does the CAC registration process for nonprofits take?

The process usually takes 2–3 months, depending on the completeness of the application and CAC’s workload.

 

2. Can a nonprofit operate without CAC registration?

Operating without registration is illegal and can limit the organization’s credibility and access to opportunities. Therefore, registration of incorporated trustee is compulsory.

 

3. Are religious organizations required to register as incorporated trustees?

Yes, religious organizations must register as incorporated trustees to operate legally in Nigeria. Registration of incorporated trustee with the Corporate Affairs Commission validates the IT as a legal entity

 

4. What is a Special Clause?

The special clause in the registration of an Incorporated Trustee (IT) with the Corporate Affairs Commission (CAC) is a declaration that outlines the non-profit nature and objectives of the organization.

It serves as a legal statement confirming that the organization is established for specific purposes that are beneficial to the public and not for personal or commercial gain.

It is a declaration during the registration of incorporated trustee that the income and property of the organization shall be applied solely towards the promotion of its objectives as set out in this constitution.

No portion shall be paid or transferred directly or indirectly by way of dividend, bonus, or otherwise howsoever by way of profit to the members of the organization.

In the event of winding up or dissolution, any remaining assets shall be given or transferred to another organization with similar objectives, as may be determined by the members at a general meeting, and approved by the Corporate Affairs Commission.

 

5. Why does CAC Require a Special Clause in the Minute of Meeting?

Legal Compliance: It ensures the organization aligns with the Companies and Allied Matters Act (CAMA) provisions governing non-profits.

Accountability: It prevents trustees or members from misusing the organization’s resources for personal benefits.

Clarification of Objectives: The special clause in the minutes helps the CAC understand the intent of the organization during the approval process.

 

Final Thoughts: A Step Toward Impactful Change

 

Registering your nonprofit or incorporated trustee with CAC is an essential step toward making a meaningful impact in Nigeria. By following the steps outlined in this guide, you can navigate the registration process with confidence and position your organization for long-term success.

 

Whether you’re starting a charity, religious group, or professional association, legal registration through CAC provides the foundation to achieve your objectives while adhering to Nigerian law. Start your registration today and take your nonprofit to the next level.

 

By implementing this guide, you’ll have a comprehensive resource designed to dominate search engine results for CAC registration of nonprofits and incorporated trustees.

For registration of incorporated trustee, filing of annual returns and other CAC post registration activities, preparation end of the year accounts, you can contact us here