Understanding the Public Benefit Organizations Act, 2013 in Kenya
Introduction
Despite a decade of non-implementation, the Public Benefit Organizations Act, 2013 has finally come into force, having commenced on the 14th of May, 2024 pursuant to Legal Notice No. 78 of 2024. The Act established a unified identity for a diverse and disparate range of civic organizations engaged in public benefits activities, consolidating their operations under a single legislative framework. The Act, under Section 3, is aimed at encouraging and supporting public benefit organisations in their contribution to meeting the diverse needs of the people of Kenya.
The Scope of Public Benefit Organizations Act, 2013 in Kenya
Section 5 of the Act defines a public benefit organization as a voluntary membership or non-membership grouping of individuals or organizations, which is autonomous, non-partisan, non-profit making and which is:
- organized and operated locally, nationally or internationally; and
- engages in public benefit activities in any of the areas set out in the Sixth Schedule (of the Act) and is registered as such by the Authority.
The areas referred to in (b) above include but are not limited to, legal aid, agriculture, children, culture, disability, energy, education, environment and conservation generally, gender, governance, poverty eradication, heath, housing and settlement, human rights, HIV/AIDS, information, informal sector, old age, peace building, population and reproductive health, refugees, disaster prevention, preparedness and mitigation, relief, pastoralism and the marginalized communities, sports, water and sanitation, animal welfare and youth.
Registration of Public Benefit Organization
Section 6(1) of the Act, provides that a public benefit organization shall be registered under this Act for it to enjoy the benefits that accrue under this Act. Pursuant to Section 7, no organization shall claim to be a public benefit organization unless it is registered under this Act. Additionally, if an organization is registered under any other written law in Kenya or not registered under any other written law in Kenya, it must receive the status of a public benefit organization from the Authority.
In accordance with the aforementioned provisions, the requirements for registration are delineated under Section 8(2). An application for registration must be accompanied by the following: a copy of the constitution of the public benefit organization, the names and addresses of the founders, the public benefit purpose for which the organization is established, the postal and physical address of the organization’s place of business, the prescribed fee, and any other particulars or information as may be required by the Authority.
In the case of international organizations, Section 11 of the Act meticulously outlines the procedures and requirements for such entities intending to operate in Kenya. Any organization registered outside Kenya that wishes to operate within the country must apply to the Authority for a certificate. Upon receipt of the application, the Authority has the discretion to either exempt the organization from registration and grant a permit, provided the organization does not intend to directly implement any activities or programs in Kenya. It is important to note, however, that under Section 11, the Authority will not exempt an organization from registration if it intends to engage in the direct implementation of any activity or program in Kenya, operate from Kenya to implement activities in another country, or raise funds within Kenya.
There is also an introduction for a new clause, under Section 3, that provides that any international organization intending to register as PBO’s must appoint an authorized agent. This agent must be Kenyan and shall serve as the legal representative of the organization within the borders of Kenya. These provisions plaster the Act’s insistence that international organizations need to have a tangible and accountable presence within Kenya. Contact us today for PBO registration in Kenya.
The transition from NGO’s to PBO’s.
Under the Public Benefit Organizations Act, Non-Governmental Organizations previously registered under the NGO Coordination Act are provisionally deemed to be registered as Public Benefits Organizations. However, this provisional registration is conditional. Under the Section 5(1) of the Fifth Schedule, these NGOs must seek formal registration under the PBO Act within one year from the commencement date of the new legislation. This provision facilitates a seamless transition while ensuring NGO’s comply with the updated regulatory framework. The one-year re-registration period serves as a critical compliance window for NGOs.
During this period, organizations must align their operations and governance structures with the new PBO Act requirements. Failure to re-register with the specified timeframes results in the forfeiture of PBO Status, rendering the organization ineligible for the benefits and recognition accorded under the PBO Act. Additionally, Schedule 5(7)(2) of the PBO Act stipulates a distinct timeline for exempt organizations, requiring them to apply for registration within three months from the Act’s commencement.
Regulatory body
Section 34 of the Act establishes the Public Benefit Regulatory Authority, which shall be a body corporate with perpetual succession and a common seal. Furthermore, Section 42 of the Public Benefit Organizations Act,2013 outlines the functions of the Authority, which include, but are not limited to, registering and de-registering public benefit organizations in accordance with the Act, maintaining a register of public benefit organizations registered under the Act, and interpreting the national policy on public benefit organizations to facilitate its smooth implementation and compliance by government ministries, departments, and agencies at various levels.
Further, with the commencement of the Act, the regulation of the non-profit organizations shifts from the Non-Governmental Organizations Co-ordination Board (The NGO Board) to the Public Benefit Organizations Regulatory Authority (The PBO Authority). The PBO Authority assumes all the functions, rights, powers, liabilities, and duties of the NGO Board effective from the date of the commencement of the Act.
CONCLUSION
The Public Benefit Organizations Act, 2013 marks a pivotal shift in the regulatory framework governing PBOs in Kenya. This legislation introduces a more robust and structured approach to ensuring compliance, transparency and accountability within the sector. The transition from the NGO Coordination Act to the PBO Act signifies a substantial change in the legal status and regulatory obligations for previously registered entities, highlighting the necessity for re-registration within specified timeframes to maintain the PBO status and access associated benefits.
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