The process on how to start a nonprofit in Pakistan cannot be considered challenging. However, the registration conditions can be somewhat complex. Also, all nonprofits are required to register with the government before commencing operations in the country.
The purpose of this article is to provide a guide on how to start a nonprofit in Pakistan and the different elements that accompany the process.
- There are four Acts that govern the operation and registration of NGOs in Pakistan
- In Pakistan, no voluntary social welfare organization can be founded without registration
- To receive the benefit of tax exemption, an NGO or NPO must obtain an exemption certificate
What are the different Acts that control the registration of NGOs in Pakistan?
There are four Acts that govern the operation and registration of NGOs in Pakistan. By and large, a nonprofit may choose any of the legal frameworks suitable for its operation.
To begin with, an NGO can be registered under the Societies Registration Act of 1860. Secondly, nonprofits can register under the Voluntary Social Welfare Agencies, 1961.
On the other hand, limited companies whose primary objective is not profit can incorporate under Section 42 of the 2017 Companies Act and register with the Pakistani Securities Exchange Commission. Lastly, the Trust Act, of 1882 governs the incorporation of public charitable trusts. These entities are established for the general good of society or the benefit of particular groups.
By the same token, these statutes have various registration procedures and supporting frameworks.
What are the guidelines on how to start a nonprofit in Pakistan?
In this article, we will consider the rules for registering NGOs under the Registration and Control Ordinance of 1961, which governs Voluntary Social Welfare Agencies. Individuals seeking how to start a nonprofit may incorporate any of these Acts as they are the most common entities operating in the country.
1. Choose the welfare service area of your nonprofit
A nonprofit may choose to undertake one or more charitable activities. This could be in the area of kid safety, teen welfare, female welfare, support for those with physical and mental disabilities, recreational activities, etc.
2. Arrange the registration-related paperwork
This is one crucial aspect that helps guide you through the process of how to start a nonprofit. Basically, you will need to have the signed NGO’s legal structure, all members’ certified copies, and the first minute of the organization members’ meeting. Even more, you will need to submit the NGO’s registered address, website, email address, and phone number for correspondence among others.
3. Open a bank account
Presently, banks only open accounts following the issuance of a registration certificate. As a result, an NGO must obtain an affidavit stating that it will open a bank account within a month of receiving its registration certificate. If an NGO expects to receive international donations, it must expressly state in the affidavit that it intends to create a foreign currency account.
Included in the affidavit should also be the payment receipt for constitution charges. The nonprofit must also submit the minute of the founding members’ meeting in which a resolution relating to registration was adopted with the signatures of three-fourths members.
4. Register your nonprofit
To be registered under the Voluntary Social Welfare Agencies, the nonprofit must provide specific documentation. This includes printed cash book, ledger, stock count, membership database, printed receipt, etc. Likewise, entities must submit other presentation-worthy documents, such as a report on activities and a list of employees who are paid.
5. Apply for tax-exempt status
To receive the benefit of tax exemption, an NGO or NPO must obtain an exemption certificate. Generally, the certificate is given out for a particular time period by the Commissioner of Internal Revenue, formerly known as the Commissioner of Income Tax.
Also, an NGO must file tax returns to maintain its registration with the government under numerous statutes, including company law, trust law, and social legislation.
Conclusion
Individuals seeking to contribute to the welfare of society or groups may choose to establish an NGO. All things considered, this guide will walk you through the process of how to start a nonprofit in Pakistan. By and large, the legislation stipulates that no voluntary social welfare organization can be founded without registration. Hence, there is a need to adhere to all the processes for registering a nonprofit.
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