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Kenya: The Public Benefit Organisations Act now operational

16 May 2024
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Background

The Public Benefit Organisations Act, 2013 (the Act) has come into force as of 14 May 2024 (the Commencement Date) pursuant to Legal Notice No. 78 of 2024 (the Legal Notice). This marks the culmination of a lengthy process that began with the Act receiving presidential assent on 14 January 2013. Following delays in the Act’s commencement, on 31 October 2016, the High Court issued an order compelling the Cabinet Secretary for Devolution and Planning (the Cabinet Secretary) to appoint and gazette the Act’s commencement date within fourteen (14) days of the order. Subsequently, on 12 May 2017, the High Court issued a ruling reinforcing the judgement of 31 October 2016 and ordered the commencement of the Act within thirty (30) days from the date of the order. Despite these orders, the Act was not effected until the recent publication of the Legal Notice that set the Commencement Date.

Purpose of the Act

The purpose of the Act is to establish the administrative and regulatory framework for the establishment and operation of public benefit organisations (PBOs) in Kenya. A PBO is a voluntary membership or non-membership grouping of individuals or organisations, which is autonomous, non-partisan, non-profit making and which is:

  • organised and operated locally, nationally, or internationally;
  • engages in public benefit activities in any of the areas set out in the Act; and
  • is registered as such by the Public Benefit Organisations Regulatory Authority (the Authority).

The commencement of the Act repeals the Non-Governmental Organisations Co-ordination Act, 1990 (the NGO Co-ordination Act) which until the Commencement Date provided for the registration and coordination of non-governmental organisations (NGOs) in Kenya.

What does this mean for NGOs registered under the NGO Co-ordination Act?

NGOs registered under the NGO Coordination Act shall be deemed to be registered as PBOs under the Act and shall have up to one year from the Commencement Date to seek registration as a PBO while those that were exempted from registration under the NGO Coordination Act have three (3) months from the Commencement Date to apply for registration. Failure of NGOs to register as PBOs under the Act within the specified periods will lead to loss of PBO status.

What about other forms of charitable entities; can they register to be PBOs?

No organisation may claim to be a PBO or receive the benefits of PBO status unless it is registered under the Act or has been granted PBO status by the Authority. Registration applications shall be made to the Authority and accompanied by the PBO’s constitution or constitutive document, founders’ names and addresses, physical and postal addresses, public benefit and principal activities, prescribed fee, and any other information that the Authority may request.

The Authority will then either approve the application, issue a certificate of registration, or reject applications, providing written reasons for any rejections. A certificate of registration shall conclusively demonstrate that a PBO has: met all registration requirements; been duly registered under the Act; is a body corporate; and is authorised to operate throughout Kenya, as specified in its constitution or certificate.

International organisations

The Act provides that international organisations (organisations registered outside Kenya) intending to operate in Kenya shall apply to the Authority for a certificate to operate in Kenya. An international organisation registered under the Act must ensure that at least one-third of its directors are Kenyan citizens residing in Kenya, as well as maintain an office in Kenya.

The Authority may exempt an international organisation from registration and, instead, issue a permit to operate in Kenya, provided that the international organisation does not intend to (i) engage in direct implementation of any activity or program in Kenya or operate from Kenya to implement any activities or programs in another country; or (ii) raise any subscriptions or engage in any other form of raising of funds in Kenya.

Regulations

The Cabinet Secretary, in consultation with the Authority, is empowered to make regulations to facilitate the implementation of the Act, such as providing for the classification of PBOs, regulation of organisations issued with a permit to operate in Kenya, and procedure for tracing and safeguarding assets upon cancellation of a certificate of registration, or deregistration or winding up of a PBO. As of the date of this article, the regulations under the Act are yet to be published.

Conclusion

The enactment of the Act represents a significant milestone in the regulatory landscape governing not-for-profit organisations in Kenya. Despite delays in its commencement, the effective implementation of the Act will be crucial in fostering the growth and sustainability of charitable organisations, which play a significant role in promoting economic, social, and cultural development in Kenya.

Given that the regulations are yet to be published, it remains unclear as to the immediate next steps that NGOs should take in terms of aligning their registration and their affairs with the Act. We expect that the Non-Governmental Organisations Co-ordination Board will issue practice directions in the coming days to guide all stakeholders as to the way forward.

As the regulatory landscape evolves, we are committed to providing timely and relevant updates regarding the implementation and impact of the Act.