Implications for non-profit companies pursuant to the amendments of the Nonprofit Organisations Act (“the Act”)

published on 6 April 2023 | reading time approx. 1 minute

Several amendments have been made to the Act which are part of the General Laws (anti-money laundering and combating terrorism financing) amendment Act 2022, which forms part of the Country’s effort to combat money laundering, terrorist financing and other financial crimes.

The amendment to the requirements for registration will require a non-profit company (“NPC”), registered in terms of the Companies Act, who makes donations to individuals or organisations outside of South Africa or provides humanitarian, charitable, religious, educational or cultural services outside of South Africa, to register as a non-profit organisation (“NPO”) in terms of the Act.

Previously, the registration of an NPO in terms of the Act was voluntary if the entity did not require funding from the National Lotteries Commission.

The Act defines a NPO as a trust, company or other association of persons:

established for a public purpose; and
the income and property of which are not distributable to its members or office-bearers except as reasonable compensation for services rendered.

In terms of the amendments to the Act, an NPO (as defined above) must apply and any other NPO which is not an organ of the state may apply at the Department of Social Development for registration.

The amendment to the Act requires that every NPO (as defined above), which is operating but not yet registered in terms of the Act to apply for registration, within a prescribed time frame, and every registered NPO, and every NPO that is required to register in terms of the amendment Act, whether it is in fact registered in terms of the Act or not, must comply with the requirements of this Act.”

The majority of the amendments mentioned above came into effect on 1 April 2023.

Should you require any assistance with the maintenance of a trust, feel free to contact our office.