How to start a nonprofit organization – What to know

There are three kinds of non-profit legal entities in South Africa, namely; voluntary association, non-profit trust and non-profit company.

The Voluntary Association
The voluntary association is the most popular NPO legal entity to set up in South Africa. It is fairly quick, inexpensive and easy. It is the ideal legal vehicle for community-based organisations. A practical challenge is that a voluntary association is unlikely to open a bank account unless it is registered in terms of the NPO Act.
While a voluntary association waits on its NPO certificate, it may not be able to receive funds into its own bank account or, if applicable, apply for approval as a public benefit organisation because it must reflect its banking details on the EI1 application form. The NPO Act registration can be done online and the organisation can request an electronic copy of the registration certificate from the NPO Directorate upon registration.
Watch tutorial: The NPO Act How to register online.

Non-profit Trust
Non-profit trusts are registered in terms of the Trust Property Control Act and the Master of the High Court is responsible for the registration of trusts. There are several regional offices throughout the country. The Master’s office will upon registration issue the trustees with Letters of Authority, which list the name and IT number of the Trust and the names of the Trustees. The trustees can use the Letters of Authority to open a bank account after being registered.

Non-Profit Company
The Companies and Intellectual Property Commission (the CIPC) is responsible for the incorporation of non-profit companies (NPC). The CIPC has introduced several online portals to facilitate the speedy incorporation of a non-profit company. The nonprofit company can be incorporated in a variety of ways, including with or without voting members. Upon incorporation, a certificate of incorporation will be issued to the non-profit company which contains specific detail about the company. Upon receipt of the certificate of incorporation, the non-profit company can open a bank account and apply for approval as a public benefit organisation, if applicable.

Registration in terms of NPO Act
NPOs that want to apply for government funding must ordinarily be registered in terms of the NPO Act.

Tax Exemption
NPOs focusing on the public benefit may also apply for approval as a public benefit organisation and tax deductibility status.