Association Not For Profit

ASSOCIATION NOT FOR PROFIT

Association not for profit is a structure available to legally formalize the pursuit of charitable objectives or some other social mission by a group of individuals. An association not-for-profit applies its earnings in promoting its objects only and cannot distribute profit amount its member in any form. In Pakistan Association not-for-profit may be registered as company under the provisions of the Companies Act, 2017 by obtaining license under Section 42 of the Act.

Associations not for profit also generally known as ‘NGOs’ or non-governmental organization because it has objectives similar to a government organization but operates independently from government. Any such an association can be formed for promoting commerce, art, science, religion, health, education, research, sports, protection of environment, social welfare, charity or any other useful object.

In Pakistan, Companies Act, 2017 regulates the formation of an association not for profit and provide a structure similar to Limited Liability Company to undertake charitable activities which are not against the laws, public order, security, sovereignty and national interests of Pakistan. Securities and Exchange Commission of Pakistan (SECP) permits the association through grant of license to be registered as a public limited company, without mentioning the word “Limited” with its name.

IBI-Remedium facilitate with incorporation of Association Not for Profit and assist obtaining license under Section 42 of the Companies Act, 2017 read with Regulation 4 of under the Associations with Charitable and Not for Profit Objects Regulations, 2018. The license is issued for a period of five (5) years, renewable for further five (5) years period on every renewal.

Securities and Exchange Commission of Pakistan (SECP) may also impose certain specific conditions on license and can revoke such license on violation of these conditions. On revocation of license, association needs to stop all its activities at once except money recovery and after satisfaction of its liabilities, shall transfer all its assets to another association not for profit with similar objects, after that member are liable to formally wind up the association not for profit.