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registration of a foundation in kenya

Introduction

Registering a foundation in Kenya is a structured process governed by various legal frameworks. Foundations in Kenya are typically established for charitable purposes, including the relief of poverty, advancement of education, and other community development activities. The process involves several steps, including the preparation of necessary documents, compliance with statutory requirements, and registration with relevant authorities. This guide provides a comprehensive overview of the registration process, requirements, and legal considerations for establishing a foundation in Kenya.

Table of Contents

  1. Overview of Foundations in Kenya

  2. Legal Framework Governing Foundations

  3. Steps to Register a Foundation

    1. Name Reservation

    2. Drafting the Trust Deed

    3. Stamping the Trust Deed

    4. Registration with the Registry of Documents

    5. Application for a Certificate of Incorporation

  4. Requirements for Registration

  5. Tax Considerations and Benefits

  6. Case Laws and Legal Precedents

  7. Conclusion

  8. TLDR

1. Overview of Foundations in Kenya

Foundations in Kenya are non-profit organizations established to undertake charitable activities. They can be registered under various legal frameworks, including the Companies Act, the Societies Act, and the Trustees (Perpetual Succession) Act. Foundations play a crucial role in promoting sustainable development, social justice, and community empowerment.

Sources:

  • Tuko

  • Imperial Registrars

2. Legal Framework Governing Foundations

The registration and operation of foundations in Kenya are governed by several legal statutes, including:

  • The Companies Act, 2015: This Act provides for the incorporation of companies, including those limited by guarantee, which are often used for charitable purposes.

  • The Societies Act, Cap 108: This Act governs the registration of societies, including charitable organizations.

  • The Trustees (Perpetual Succession) Act, Cap 164: This Act allows for the incorporation of trustees to hold property in perpetuity for charitable purposes.

  • The Public Benefit Organizations Act, 2013: This Act provides a framework for the registration and regulation of public benefit organizations (PBOs), which include foundations.

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3. Steps to Register a Foundation

3.1 Name Reservation

The first step in registering a foundation is to reserve a unique name. This can be done through the eCitizen portal, where you submit a name reservation request to the Registrar of Companies. The name should not be similar to any existing organization to avoid confusion.

3.2 Drafting the Trust Deed

A trust deed is a legal document that outlines the objectives, governance structure, and operational guidelines of the foundation. It must include:

  • The name of the foundation

  • The main objectives of the foundation

  • Details of the trustees

  • The powers and duties of the trustees

  • The management structure

  • Provisions for the appointment and removal of trustees

  • The procedure for amending the trust deed

3.3 Stamping the Trust Deed

Once the trust deed is drafted, it must be stamped with duty at the Kenya Revenue Authority (KRA). This involves paying a stamp duty fee, which is a percentage of the value of the trust property.

3.4 Registration with the Registry of Documents

After stamping, the trust deed should be presented for registration at the Registry of Documents at Ardhi House. The registration process takes about 1 to 2 weeks.

3.5 Application for a Certificate of Incorporation

The final step is to apply for a certificate of incorporation from the Registrar of Companies. This involves submitting the following documents:

  • The stamped trust deed

  • A completed application form

  • Copies of identification documents for the trustees

  • Proof of payment of the registration fee

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4. Requirements for Registration

The registration of a foundation in Kenya generally requires the following:

  • Name of the Foundation: The proposed name must be unique and not similar to any existing organization.

  • Main Objective: The foundation must have a clear charitable objective, such as the relief of poverty, advancement of education, or promotion of health.

  • Trustees: A minimum of three trustees is required. They must be individuals of good standing and not disqualified from holding office.

  • Trust Deed: A comprehensive trust deed outlining the governance and operational structure of the foundation.

  • Stamp Duty: Payment of stamp duty on the trust deed.

  • Registration Fee: Payment of the registration fee to the Registrar of Companies.

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5. Tax Considerations and Benefits

Foundations in Kenya may be eligible for various tax benefits, including:

  • Income Tax Exemption: Foundations can apply for an income tax exemption certificate from the Kenya Revenue Authority (KRA). This exempts them from paying income tax on their charitable activities.

  • VAT Exemption: Foundations may also apply for VAT exemption on goods and services used for their charitable activities.

  • Donations: Donations to registered foundations are tax-deductible for the donors, subject to certain conditions.

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6. Case Laws and Legal Precedents

Case Law 1: National Gay and Lesbian Human Rights Commission (NGLHRC) v. NGO Coordination Board

  • Parties: National Gay and Lesbian Human Rights Commission (NGLHRC) and NGO Coordination Board

  • Outcome: The Supreme Court of Kenya upheld the right of the LGBTQIA+ community to register their organization as an NGO.

  • Relevance: This case underscores the importance of the right to association and the legal recognition of diverse groups, including foundations, under Kenyan law.

Case Law 2: Petition 308 of 2016

  • Parties: A society registered under the Societies Act and the Registrar of Societies

  • Outcome: The court ruled in favor of the petitioner, emphasizing the need for the Registrar of Societies to adhere to the statutory requirements for registration.

  • Relevance: This case highlights the procedural requirements and the legal obligations of the Registrar in the registration process.

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Conclusion

Registering a foundation in Kenya involves a detailed process that requires compliance with various legal and regulatory requirements. By following the outlined steps and ensuring adherence to the statutory provisions, individuals and organizations can successfully establish foundations to undertake charitable activities. The legal framework in Kenya provides a supportive environment for the registration and operation of foundations, ensuring that they can contribute effectively to community development and social welfare.

TLDR

To register a foundation in Kenya, you need to reserve a unique name, draft and stamp a trust deed, register the deed at the Registry of Documents, and apply for a certificate of incorporation from the Registrar of Companies. The process involves compliance with various legal requirements and offers tax benefits for charitable activities.

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Answered by mwakili.com