Legal Analysis Organizational Forms The legal framework in Pakistan recognizes four primary forms of not-for-profit organizations (NPO). The Societies Registration Act, 1860 states that a society can be formed and registered if its purpose is to promote any one or more of the following activities: i. Science; ii. Literature; iii. Fine arts; iv. Instruction and the diffusion of useful knowledge; v. Diffusion of political education; vi. Foundation or maintenance of libraries or reading rooms for use among members or open to the public; vii. Public museums and galleries of paintings; viii. Work of art; ix. Collection of natural history; x. Mechanical and philosophical inventions; xi. Instruments or designs; and xii. Educational and medical services. A public charitable trust, under the Trusts Act, 1882,unlike other trusts created for the benefit of specific individuals, is for the benefit of society generally or for certain sections of society. Charitable objectives can be classified under the following divisions: i. Advancement of religion; ii. Advancement of knowledge; iii. Advancement of commerce, health and safety of the public; and iv. Advancement of any other object beneficial to mankind. The Voluntary Social Welfare Agencies Registration and Control Ordinance, 1961states that a Voluntary Social Welfare Agency is an organization or undertaking established by people of their own free will for the sole objective of providing welfare services in any one or more of the following fields: i. Child, youth and women’s welfare; ii. Welfare of the physically and mentally challenged; iii. Family planning; iv. Social education; v. Rehabilitation and welfare of patients; vi. Welfare of juvenile delinquents; vii. Rehabilitation and welfare of released prisoners; viii. Welfare of socially handicapped; ix. Welfare for the elderly and destitute; x. Recreational programmes to ward off people from anti-social activities; xi. Training in social work; and xii. Coordination of social welfare agencies. A nonprofit company may seek registration under the Companies Ordinance, 1984if it is established for furthering the development of: i. Commerce; ii. Art; iii. Science; iv. Religion; v. Sports; vi. Social services; vii. Charity; or viii. Any other ‘Useful’ objective. Public Benefit Status Depending on the organizational form, NPOs are free to pursue both member benefit purposes and public benefit purposes. Tax exemptions and certain other fiscal benefits are available to certain NPOs, depending on their purposes and activities. Generally, in order to qualify for tax exempt status, the NPO must confer and be seen to confer benefits to society as a whole and not to any particular segment of society. Barriers to Entry Domestic NPOs may register under any of the four different laws with registration offices in different provinces. Foreign NPOs sign a Memorandum of Understanding (MoU) with Economic Affairs Division (EAD) in order to receive recognized legal status for their activities. If an INGO is registered with the EAD (or signs an MoU with the EAD), It need not to be registered under any other NGO registration laws. The MoU with the EAD provides legal status to an INGO in Pakistan to operate within the ambit of its agreement with EAD.
Posted on: Sat, 27 Dec 2014 19:08:57 +0000
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