We confirm the instruction to provide information and advice with regard to the use of a Non-Profit Company (NPC) (previously known as a section 21 company) as opposed to the use of a Trust to promote the education of pastors and reverends in certain identified areas.
|1. What is a NPC?||A NPC is defined as —
|1. What is a Trust?||A Trust is a legal arrangement between persons (the founder, trustees and beneficiaries) intending to form a trust that is governed in terms of a Deed of Trust for the benefit of the beneficiaries. Trusts can be used to conduct business for profit or to promote causes not aimed at profit.|
|2. How is a NPC administered?||A NPC is administered and managed by its Board of Directors that receive their powers from the memorandum of incorporation (hereinafter referred to as the “MOI”) and the Companies Act, No 71 of 2008 (hereinafter referred to as “the Act”) and specifically Schedule 1 of the Act. The MOI forms the constitution of the NPC and the NPC may not act in as far as any action is prohibited by its MOI. The MOI will amongst others determine how the NPC’s business should be conducted, how the Board or Directors of the NPC is appointed, how meetings of directors or members are convened, what constitutes a quorate for meetings of the Board or members, what percentage is required for specific decisions of the directors or the members and what happens in the event of a conflict between directors or members.|
|2. How is a Trust administered?||A trust is administered and managed by its Board of Trustees that receive their powers from the Deed of Trust. The Trust receives all its powers from the Deed of Trust and the Trustees may not perform any functions not allowed in terms of the Deed of Trust. The Deed of Trust will determine amongst others how the Trust’s business should be conducted, how the Board or Trustees of the NPC is appointed, how meetings of Trustees are convened, what constitutes a quorate for a meeting of the Trust, what percentage is required for specific decisions of the Trustees and what happens in the event of a conflict between Trustees.|
|3. Does a NPC have an independent legal personality?||A NPC has legal personality separate from its members and directors. This means that the NPC can sue and be sued in its own name, and can own immovable property in its own name.|
|3. Does a Trust have an independent legal personality?||A Trust does not have its own legal personality and cannot sue or be sued in its own name and must be sued in the name of its Trustee in their capacities as Trustees of the Trust. A Trust cannot hold immovable in its own name and it must be registered in the names of the Trustees that hold the property in their capacities as Trustees of the Trust on behalf of the beneficiaries. A Trust will however be regarded to have a separate legal personality if the Trust should be registered as a non-profit organisation in terms of the Non Profit Organisations Act, No 71 of 1997.|
|4. How to form a NPC?||A NPC must be registered with the Companies Intellectual Properties Commission (hereinafter referred to as “CIPC”) after the necessary CoR documentation and MOI has been completed.|
|4. How to form a Trust?||A Trust must be registered with the Master of the High Court who requires a Deed of Trust and supporting documentation.|
|5. What formalities forms part of a NPC?||
|5. What formalities forms part of a Trust?||
|6. Advantages and disadvantages of a NPC?||6. Advantages and disadvantages of a Trust?|
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