MasiboLaw

By Ogada Obila and Joy Kawira 

The Public Benefit Organisations Act, 2013 (the “PBO Act“) came into force on 14th May 2024 . This Act repeals the Non-Governmental Organizations Coordination Act of 1990, which, until the  Commencement Date, provided for the registration and coordination of non-governmental organizations (NGOs) in Kenya.

As a result, all non-governmental organizations previously registered under the repealed Non-Governmental Organizations Coordination Act of 1990 are now subject to the Public Benefits Organisations Act, 2013 and must re-register as Public  Benefit Organizations (PBOs) within 12 months. 

The Act provides for the establishment, registration, and operation of public benefit organizations and establishes an administrative and regulatory framework within which they will conduct their affairs. 

Some key highlights of the PBO Act: 

1. NGO’s to PBO’s 

Non-governmental organizations (NGOs) will be referred to as Public Benefit Organizations (PBOs) at the commencement of the Act. Section 5 (1) of the Act defines A PBO as ‘a  voluntary membership or non-membership grouping of individuals or organizations, which is  autonomous, non-partisan, non-profit making and which is organized and operated locally,  nationally or internationally, engages in public benefit activities and is registered as such by  the Authority.’ 

2. Requirement for Registration  

To register a local Public Benefit Organization(PBO), one should make an application to  the Authority accompanied by: 

∙ Constitution and other constitutive documents of the organization  

∙ Names and addresses of the founders 

∙ The public benefit purposes 

∙ The principal activities that the public benefit organization shall engage in

∙ The postal and physical address of the principal place of doing business

∙ Pay the prescribed fee.  

In the case of an international non-governmental organization that wishes to register as a  PBO in Kenya, it needs to submit the following: 

∙ An application form. 

∙ Proof that it is a legal entity in another country. 

∙ Organization’s address in Kenya. 

∙ A written statement from a representative of the organization’s headquarters with  Authority stating the purpose of the international NGO and the activities it wishes to undertake in Kenya. 

∙ One-third of the directors should be Kenyan and residents of Kenya. 

Within 60 days of approval by the Public Benefits Regulatory Authority, the organization is registered as a PBO and issued a Certificate of Registration. In case the Authority has declined registration of a proposed public benefit organization, it is required to notify the applicant of the reasons for the refusal within 14 days of the decision. An aggrieved applicant, following review, may appeal to the Public Benefits Organisations Dispute Tribunal against the decision. 

3. Establishment of the National Federation of Public Benefits Organizations. 

This is a corporate umbrella organization of all public benefit organizations registered under the Act and the self-regulation forums of public benefit organizations recognized by the Authority. The federation is mandated to provide leadership on matters of interest to the sector and promote, coordinate, and monitor self-regulation through forums for self-regulation of public benefit organizations. 

4. Establishment of the Public Benefit Organizations Regulatory Authority.

The Authority is a corporate body consisting of board members mandated to: 

∙ Register and de-register the Public Benefit Authority.  

∙ Maintain a register of public benefit organizations registered. 

∙ Interpret the national policy on public benefit organizations  

∙ Receive and review annual reports of public benefit organizations 

∙ Advise the Government on the activities of public benefit organization

5. Establishment of the Public Benefit Organizations Disputes Tribunal 

The Public Benefit Organizations Disputes of the Tribunal are established by members appointed by the Chief Justice and approved by the National Assembly. 

The functions of the tribunal include:- 

∙ Hear and determine complaints arising from any breach of the provisions of the PBO  Act. 

∙ Hear and determine any matter or appeal made to it under the provisions of the PBO  Act. 

What does this mean for NGOs registered under the NGO Coordination Act? 

NGOs registered under the NGO Coordination Act will be considered PBOs under the new Act but must formally apply for PBO registration within one year from the  Commencement Date. NGOs are previously exempt from registration under the NGO  Coordination Act and have three months from the Commencement Date to apply for registration.  Failure to register as PBOs within these specified periods will result in losing their PBO  status. 

The registered PBOs will enjoy a wide range of benefits, including indirect government support in the form of exemption from specified tax categories, direct government financing, and preferential treatment in public procurement procedures and contract bidding. 

Conclusion  

The Public Benefits Organization Act of 2013 marks a significant change for Kenya’s non-governmental and other charitable entities. All NGOs previously registered under the NGO  Coordination Act must transition to PBO status within specified periods to maintain their operational legitimacy and benefits. This process involves a formal application to the Authority,  accompanied by requisite documentation and information. Successful registration ensures the organization is recognized as a PBO, authorized to operate throughout Kenya, and entitled to the associated benefits.

The writer are lawyers offering legal services to charitable organizations, you can contact them through ogada@masibolaw.co.ke/intern@masibolaw.co.ke