Financial institutions
Energy
Infrastructure, mining and commodities
Transport
Technology and innovation
Life sciences and healthcare
South African non-profit
companies
Ten things to know
South African non-profit companies – Ten things to know
Ten things to know about South African non-profit companies
01 |Objects
A non-profit company is a company incorporated for one or
more object, either a public benefit or related to cultural/
social activities, or communal/group interests.
02 |Name
The name of the non-profit company must end with the
expression ‘NPC’ (e.g. Good Deeds NPC).
03 |Directors and members
A non-profit company may be incorporated with or
without members. It must have at least three directors.
Incorporators are the non-profit company’s first directors
and members (if it has members).
04 |Legal personality
A non-profit company is recognised as a legal entity
separately from its members.
05 |Memorandum of incorporation
A company’s constitutional document is known as its
memorandum of incorporation (MOI) and any provision in
the MOI is void to the extent that it is inconsistent with the
Companies Act, 2008. A non-profit company’s MOI must
set out at least one non-profit object.
06 |Tax
Incorporation as a non-profit company does not necessarily
qualify the non-profit company for any particular treatment
in terms of the Income Tax Act, 1962, or any other
legislation, unless that legislation provides otherwise. A
non-profit company can apply to the South African Revenue
Service for a tax-exempt status, known as Public Benefit
Organisation (PBO) status. This will allow the company to
take advantage of tax benefits to reduce their tax burden
and obtain other benefits. If registered as a PBO, donations
made to the non-profit company are deductible from the
donor’s tax liability in terms of section 18 of the Income
Tax Act.
02 Norton Rose Fulbright – October 2015
07 |Assets and income
A non-profit company must apply all of its assets and
income to advance its non-profit object/s. It may not
dispose of any of its assets or business to a profit company,
except for fair value, unless the disposition occurs in the
ordinary course of the activities of the non-profit company.
The assets and income may not be distributed to the
incorporators, members, directors or officers of a nonprofit company, except as reasonable compensation for the
services rendered by them.
08 |Relationship with a profit company
A non-profit company may hold shares in a profit company
but may not merge with or convert to a profit company.
09 |Fundraising
A non-profit company may register with the Department of
Social Welfare as a non-profit organisation in terms of the
Non-Profit Organisations Act, 1997 in order to apply for
government funding or obtain a fundraising number.
10 |Administration
A non-profit company is required to comply with ongoing
administrative requirements set out in the Companies Act,
including filing annual returns, and (if applicable) the
Non‑Profit Organisations Act, including annual reporting.
South African non-profit companies – Ten things to know
Contacts
If you would like further information please contact:
Charles Ancer
Director, Johannesburg
Tel+ 27 11 685 8946
[email protected]
Emma Forbes
Associate, Johannesburg
Tel+ 27 11 301 3455
[email protected]
Norton Rose Fulbright – October 2015 03
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