The ABCs of Nonprofit Registration

Government registration for nonprofit organizations is complex and varies across countries. Learn more about some of the different ways nonprofits around the world can be legally recognized for the important work they do.


 

A is for Association

Typically, associations are broadly defined as groups of people organized for a nonprofit purpose. In Francophone countries, an association is referred to as an “association sans but lucratif,” which literally translates to “association without lucrative goals.”

B is for Business Names

In some countries, such as Ghana, organizations register their business name before registering as a nonprofit or charitable entity. Business name registration has much less stringent requirements than company or nonprofit registration and can also be used by profit-making entities.

C is for Community-Based Organization

In Uganda, charitable organizations can register at the provincial level as a community-based organization, which is generally less burdensome than registering nationally as a non-governmental organization. Certificates will differ by region, but the general understanding of non-commercial purposes and activities remains consistent in each of Uganda’s 134 districts.

D is for Donee

In Mexico, a tax-exempt organization is known as an “authorized donee.” This organization is entitled to issue tax-deductible receipts to donors.

E is for Exempt

In most countries, registered charitable organizations enjoy exemptions from income or other taxes. They will almost always receive certificates from their respective revenue or tax authority that their organization is tax-exempt. In some countries, this tax certificate is the only sure means of guaranteeing that an organization has a charitable purpose.

F is for Foundation

A foundation pools an initial sum of money from its founder into an investment and then either makes grants or directly conducts charitable activities from the earnings on this investment. In France, there are eight different foundation types: public utility, sheltered, corporate, research, partnership, university, hospital, and scientific cooperation.

G is for gGmbH

In Germany, a limited liability company (see L below) is known as a Gesellschaft mit beschränkter Haftung (GmbH). An extra lowercase “g” at the beginning signifies that a GmbH is charitable but not necessarily tax-exempt.

I is for Institution

Kazakhstan and Kyrgyzstan distinguish between an institution and other forms of charitable registration. An institution carries out managerial, social and cultural, educational or other functions, does not earn a profit, and is financed partially or fully by its owner. This type of registration is commonly used for hospitals, clinics, schools, universities, and museums.

J is for Juridical Person

In Chile, the government registration certificate for a foundation describes it as a “persona jurídica sin fines de lucro,” which literally translates to nonprofit juridical person.

L is for Limited

In many countries, an organization can be registered as a limited (liability) company in two possible ways: limited by guarantee and limited by shares. The purpose of a limited company is to guarantee that, if the company experiences financial hardship, its members are not personally liable.

A company limited by shares is owned by one or more shareholders and managed by at least one director. This company is not understood to be charitable because it issues shares that pay dividends to individuals.

A company limited by guarantee is owned by one or more guarantors and managed by at least one director who agrees to contribute to the company’s debts only up to a certain percentage (known as a guarantee). This company cannot issue shares or distribute any dividends to private individuals and is, therefore, a popular form of registration for charitable organizations.

M is for Mutual Benefit Organization

In Bhutan and Mongolia, a mutual benefit organization exists primarily to advance the shared interests of its members or supporters. This type of registration is used for professional associations or groups interested in a particular cultural activity, sport, or hobby.

N is for Nonprofit Company

Though the term may seem like an oxymoron, registration as a ‘nonprofit company’ is common in some countries, including Saint Vincent and the Grenadines. The general definition of a nonprofit company is a company without any share capital (similar to a company limited by guarantee).

O is for ONLUS

In Italy, a charitable, tax-exempt organization is known as an ‘organizzazione non lucrativa di utilita sociale,’ or ONLUS. Other types of organization registrations may conduct charitable activities, but only an ONLUS is tax-exempt.

P is for Public Benefit Organization

Dutch organizations may only register with this status if at least 90% of their work is “focused on the general good.” Many public benefit organizations have what’s known as an ANBI number, which is similar to an EIN number in the U.S.

R is for Renew

In many countries, nonprofit or charitable registration is only valid for a fixed period of time and must be renewed. In Ethiopia, under an older law, registration as a charity or society would expire and need to be renewed three years. However, in March 2019, this law was repealed and replaced by the Civil Societies Organizations Proclamation, under which, registration does not expire.

Some countries require charitable organizations to seek additional government permissions to receive contributions from overseas individuals or entities. These almost always need to be renewed after a certain period of time. Some countries with this requirement are India, Nepal, Bangladesh, and Azerbaijan.

S is for Society

Some countries use the term “society” instead of “association,” although the two terms refer to a very similar type of organization. In India, most societies are bound by one law, but states within India often have their own variant of this law and issue state-specific certificates of registration.

T is for Trust

The trustees of a trust are given control of an investment fund, and that money may only be distributed to the purposes outlined in the trust’s governing document, known as a trust deed. Kenya is one country in which charitable organizations commonly register as trusts.

U is for Union of Legal Entities

In Azerbaijan, commercial or nonprofit organizations can form a union of legal entities to coordinate activities and to represent their interests to government bodies and others.

V is for Voluntary Social Services Organization

In Sri Lanka, the term for a charitable entity is voluntary social services organization.

W stands for Waqf

A waqf is a charitable endowment (typically money, land, or other assets) that are donated for a specific religious purpose. It is present in almost every country with significant Muslim populations. Although waqfs are recognized under Islamic law, they are not usually recognized by governments as a legal registration type.

Y is for Youth Organization

In Sierra Leone and Malawi, in addition to or instead of nonprofit charitable registration, an organization may register under a federal body specifically designed to work with youth organizations. However, the respective laws regulating these organizations do not specify that this type of organization may not make a profit.

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