A non-governmental organization (NGO) can undergo an amicable dissolution. Yet, the crucial question remains: how can an NGO navigate the process of dissolving harmoniously? If you are wondering how to dissolve an NGO in Nigeria, understanding the proper steps is essential.
Several factors may prompt an organization to consider dissolution. Take, for example, Mr. A, Mr. B, and Mr. C, who serve as trustees for an NGO named Hope Alive Foundation. Initially filled with hope and purpose, they dedicated themselves to the mission of the foundation. However, as time passed, the organization encountered significant obstacles. A dwindling financial support system left them struggling to fund their programs. Additionally, an inability to fulfill their original goals led to frustration and disappointment.
Moreover, internal disagreements among the trustees emerged, creating tension and hindering the organization’s progress. These challenges placed tremendous strain on the foundation. Ultimately, this led them to contemplate the difficult decision of dissolving the NGO in a respectful and cooperative manner. The journey towards an amicable dissolution requires careful planning and consideration. This is necessary to ensure a fair resolution for all involved parties.
Because of these differences, the trustees can decide to dissolve the NGO. This explains why the central focus of this article is to carefully examine the procedures and requirements for the dissolution of an NGO in Nigeria.
WHAT IS AN NGO?
Under the Companies and Allied Matters Act (CAMA) 202 in Nigeria, an NGO is generally registered as an Incorporated Trustee. This means that it is a non-profit legal entity formed by individuals or a community for charitable, religious, educational, cultural, or social development purposes. While these organizations may differ from others, they have noble intentions rather than the pursuit of profit.
HOW TO DISSOLVE AN NGO IN NIGERIA
Section 850 of the Companies and Allied Matters Act provides a guide on how to dissolve an NGO in Nigeria. The following are the requirements that must be fulfilled before an NGO can be dissolved:
- A Resolution must be passed by the Trustees or governing body stating the dissolution of the NGO.
- Court Petition: A petition must be filed in a court of competent jurisdiction, which is the Federal High Court, to request an order for dissolution.
- Service of Public Notice: A notice of petition must be served on all persons whose interests or rights may be affected.
- Grounds for Dissolution: The application for dissolution must contain any of the grounds for dissolution provided under the Companies and Allied Matters Act.[1]
- Distribution of Assets: Remaining assets after settlement of debts cannot be distributed to members but must be transferred to a similar non-profit institution.[2]
PROCEDURES FOR DISSOLVING AN NGO IN NIGERIA REQUIREMENTS
The procedure for dissolving an Incorporated Trustee (Non-profit organization) in Nigeria is provided under the Companies and Allied Matters Act (CAMA) 2020.[3] Incorporated Trustees, also referred to as non-profit organizations, include churches, non-governmental organizations (NGOs), foundations, associations, and similar bodies. These are established for charitable or social purposes.
The following are the procedure:
1. A petition for dissolution may be presented to the court by any of the following parties[4];
- The governing body or council;
- One or more trustees of the organization;
- Members of the association, provided they represent at least 50% of the total membership; or
- The Corporate Affairs Commission (CAC).
2.The court may order the dissolution of a body corporate on the following grounds: (i) the organization’s objectives have been fully achieved with no further purpose; (ii) it was established for a specific period that has expired; (iii) its aims have become illegal or contrary to public policy; (iv) it is just and equitable to dissolve it; or (v) the registration certificate has been revoked or cancelled by the Commission.
3. During the hearing of the petition, the court must ensure that all persons whose interests or rights may be affected by the dissolution are duly notified.[6]
4. In the event of winding up or dissolution, any remaining property of the organization, after all debts and liabilities have been settled, shall not be distributed among members. Instead, such property shall be transferred to another institution with similar objectives to those of the dissolved association.[7] This recipient institution is to be determined by the members of the association at or before the time of dissolution.
5. Where it is not possible to give effect to this provision, the remaining assets shall be applied to a charitable cause.
Why Legal Representation is Essential in Dissolving an NGO in Nigeria
When dissolving an NGO, it’s important to get the right legal help. A lawyer is essential in this process, especially for NGOs registered as Incorporated Trustees in Nigeria. They will guide you through the legal requirements set by the Companies and Allied Matters Act (CAMA) 2020. Unlike just closing down the organization, dissolving an NGO needs a court order. Having legal advice ensures you follow the rules and avoid any legal issues.
Conclusion
Dissolving a non-governmental organization (NGO) in Nigeria is not a simple task; it follows a legal process set out by the Companies and Allied Matters Act (CAMA) 2020. While NGOs often start with good intentions, changing factors like money issues, internal disagreements, or achieving their goals can make dissolution necessary. However, this process must follow the law closely. It begins with a valid resolution, then a court petition must be filed. Affected parties must be notified, and assets need to be distributed according to the law.
If you need professional legal support with dissolving your non-profit organization in Nigeria, well be delighted to assist you. You may contact us by filling out this form here or chat with any member of our team through the live chat icons on either side of this page, and we’ll respond to you.
[1] Section 850 (2) (a-e) of the Companies and Allied Matters Act
[2] Section 850 (4) of the Companies and Allied Matters Act
[3] Section 850 of the Companies and Allied Masters Act
[4] Ibid
[5] Section 850 (2) Companies and Allied Matters Act
[6] Section 850 (3) Companies and Allied Matters Act
[7] Section 850 (4) Companies and Allied Matters Act
