Civil Society Organizations (CSOs) include non – profit and non-state organizations in which people organize themselves to pursue shared interests in the public domain outside of their immediate family. Examples include community-based organizations and village associations, environmental groups, women’s rights groups, farmers’ associations, faith-based organizations, labour unions, co-operatives, professional associations, chambers of commerce, independent research institutes and the not-for-profit organisations.
Although CSOs are technically not commercial entities, the Corporate Affairs Commission (CAC) nevertheless regards them as entities to be regulated and as such, requires their registration as Incorporated Trustees. The procedure for registration of Incorporated Trustees is as follows:
· The first step would be to conduct an availability search on the name and to reserve the same, if available. It is always advisable to have at least two names, one being in the alternative, in the event that the primary name is unavailable. However, the CAC published a notice on the 11th of July stating that applications for name reservation for Incorporated Trustees must undergo the process of obtaining the consent of the Registrar – General of the CAC.
· CSOs are governed and managed by a Board of Trustees. A Board of Trustees is the equivalent of the board of directors in a company and are responsible for the management and direction of the organization. The initial Trustees are appointed by the persons seeking to register the CSO.
· Once the name is approved and the Board of Trustees is in place, the next step for the registration of a CSO in Nigeria is the publication of a notification by the Board of Trustees of its intention to register a CSO. This notice must be published in three (3) newspapers, one (1) of the newspapers being one that is widely circulated in the area where the organization will be based.
· Following that, the application form must be completed by providing information such as the approved name of the CSO, the registered address of the CSO, a brief description of the aims and objectives of the CSO. The application form also requires the personal details of the trustees, this includes their names, sex, nationality, permanent residential addresses, occupation etc.
· The completed application form must be submitted to the CAC alongside other documentation which includes an application letter, the original newspaper publications, two (2) copies of the CSO constitution, the minutes of the meeting where the trustees were appointed, two (2) passport photographs of each trustee etc.
· All the documentation will then be reviewed by the CAC, and if there are no queries, the CSO will be registered with the CAC and may then commence operations.
Unlike the repealed Companies and Allied Matters Act, 1990 (“CAMA”), the recently passed Companies and Allied Matters Act, 2020 (“New CAMA”) contains new provisions that empower the CAC to suspend the trustees of a CSO for various reasons. These reasons include where the CAC is of the view that it is desirable to suspend these trustees for the purpose of public interest as well as circumstances where the trustees are involved in fraudulent activities or have mismanaged the affairs of the CSO.
This new provision in the New CAMA is welcome as it will discourage the use of CSOs as vehicles of fraud and will also encourage and promote more efficient management of already existing CSOs. However, it is important to note that these provisions may be liable to abuse, especially where the New CAMA empowers the CAC to suspend trustees in the “public interest.” The term is vague and may be subject to wide interpretation. It is therefore pertinent that the CAC, through regulations and/or directives, clarify what would qualify as “public interest” in order to avoid the abuse of these new provisions.
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