Non-profit organizations (NPOs) play a vital role in addressing social issues and promoting the welfare of communities. In Pakistan, NPOs are recognized as Non-Governmental Organizations (NGOs) and are governed by the Societies Registration Act, 1860, or the Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961. This guide provides a detailed step-by-step process for registering an NPO in Pakistan, along with relevant definitions, examples, and case studies that highlight the significance of such organizations. By establishing an NPO, individuals and groups can actively contribute to the betterment of society and uplift the underprivileged.
Non-Profit Organization (NPO):
A non-profit organization is a legal entity formed to pursue activities that benefit the public or specific segments of society. NPOs do not operate for the purpose of generating profit, and any surplus funds are reinvested into their activities.
Societies Registration Act, 1860:
This legislation provides the legal framework for the registration of societies, including NPOs, in Pakistan. It defines the procedures, rules, and regulations for establishing and managing societies.
Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961:
This ordinance outlines the registration requirements and regulatory framework for non-profit organizations engaged in social welfare activities in Pakistan. It focuses on promoting transparency and accountability in the operations of such agencies.
Define your Mission and Objectives:
Begin by clearly defining the mission and objectives of your non-profit organization. Determine the specific social issue or cause you aim to address and outline the goals you intend to achieve.
Choose a Suitable Legal Structure:
In Pakistan, NPOs can be registered either as a society under the Societies Registration Act, 1860 or as a non-profit company under the Companies Act, 2017. Consider the advantages and requirements of each structure before making a decision.
Societies Registration Act, 1860:
If you choose to register as a society, follow these steps:
a. Formation of a Governing Body:
Form a governing body or a managing committee composed of a minimum of seven individuals who will be responsible for managing the affairs of the organization.
b. Draft a Memorandum of Association (MOA) and Rules and Regulations:
Prepare a MOA and Rules and Regulations document that outline the purpose, objectives, and operational procedures of the organization. Include details such as the name of the society, its registered address, names of members of the governing body, and their roles.
c. Hold a General Body Meeting:
Conduct a general body meeting with the founding members to approve the MOA and Rules and Regulations. The meeting should have a minimum of seven members present.
d. Submit the Application:
Submit the application for registration along with the following documents to the relevant Registrar of Societies:
MOA and Rules and Regulations duly signed by the founding members.
Minutes of the general body meeting.
List of members of the governing body with their signatures.
Address proof of the registered office.
e. Verification and Registration:
The Registrar of Societies will review the application and documents. If everything is in order, the society will be registered, and a registration certificate will be issued.
Non-Profit Company under the Companies Act, 2017:
If you choose to register as a non-profit company, follow these steps:
a. Formation of a Board of Directors:
Form a Board of Directors composed of a minimum of three individuals who will be responsible for the management of the organization.
b. Draft the Memorandum and Articles of Association:
Prepare the Memorandum and Articles of Association, which should include details such as the name of the company, its objectives, registered office address, and the composition and roles of the Board of Directors.
c. Obtain a Digital Signature and Director Identification Number (DIN):
Directors of the company need to obtain a digital signature certificate and a DIN from the National Institutional Facilitation Technologies (NIFT) or the Security Exchange Commission of Pakistan (SECP).
d. Apply for Name Availability:
Submit an application for name availability to the SECP, ensuring that the proposed name is unique and complies with the naming guidelines.
e. Application for Incorporation:
Once the name is approved, submit the application for incorporation to the SECP, along with the required documents, including the Memorandum and Articles of Association, proof of registered office, consent of directors, and prescribed fee.
f. Verification and Incorporation:
The SECP will review the application and documents. If everything is satisfactory, the company will be incorporated, and a certificate of incorporation will be issued.
Register for Tax Exemption:
After registration, apply for tax exemption by submitting the necessary documents and fulfilling the requirements of the Federal Board of Revenue (FBR) to obtain tax-exempt status.
Once registered, it is essential to maintain compliance with the relevant laws and regulations. This includes submitting annual reports, financial statements, and other required documentation to the Registrar of Societies or the SECP, as applicable.
The Edhi Foundation:
The Edhi Foundation is one of the most prominent NPOs in Pakistan, providing a wide range of social services, including healthcare, education, and emergency assistance to the needy. It operates through various centers and relies on donations to fund its activities.
Shaukat Khanum Memorial Cancer Hospital and Research Centre:
Established by the renowned cricketer Imran Khan, this NPO focuses on providing state-of-the-art cancer treatment and research facilities to the underprivileged in Pakistan. The organization relies on donations and fundraising events to support its operations.
Akhuwat is an NPO that aims to alleviate poverty by providing interest-free microfinance to the poor. By utilizing the principles of Islamic finance, Akhuwat has successfully empowered thousands of individuals to start their businesses and improve their livelihoods. The organization follows a comprehensive process of registration, transparency, and accountability, which has earned it trust and support from donors and beneficiaries alike.
The Citizens Foundation (TCF):
TCF is an NPO that focuses on providing quality education to underprivileged children in Pakistan. By establishing schools in remote and marginalized areas, TCF has transformed the lives of countless children, equipping them with the tools to break the cycle of poverty. TCF’s success lies in its robust organizational structure, efficient management, and effective utilization of resources.
Registering a non-profit organization in Pakistan requires adherence to the Societies Registration Act, 1860, or the Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961. Through the examples and case studies mentioned above, it is evident that NPOs play a crucial role in addressing social issues and uplifting communities. By following the registration process and maintaining transparency and accountability, individuals and groups can establish impactful organizations that contribute to the betterment of society. By becoming actively involved in philanthropy and social welfare, we can collectively create a more inclusive and prosperous Pakistan for all.