Organization
An organization is made up of a group of people who come together to accomplish a common goal or a set of goals. The size of an organization can vary from two people to thousands of people.
Community-Based Organization (CBO)
A CBO is an organization that provides social services at the local level. It is a non-profit organization whose activities are based primarily on volunteer efforts. This means that CBOs depend heavily on voluntary contributions for labour, material and financial support. Davidson (1993) defined CBOs as formal or informal organizations representing a group of people with common local interests, living or working together within such limited geographical areas as neighbourhoods.
Non-Government Organization (NGOs)
Davidson and Peltenburg (1993) described NGOs as private voluntary or non-profit organizations of professionals supporting other groups in need of assistance.
Legislation of NGOs in Pakistan
The NGOs are registered under some of the following laws in the country.
- The Voluntary Social Welfare Agencies (Registration & Control) Ordinance, 1961
- The Societies Registration Act, 1860
- The Trust Act, 1882
- The Charitable Endowment Act, 1980
- The Companies Ordinance, 1984
Registration Authority
- Provincial Directorate of Social Welfare
- Joint stock Registrar
- Deputy Commissioner
- M/o Women Dev. S.W.& S.E
- Corporate Law Authority
NGOs and CBOs can work together to mobilize their collective voice when there is consensus about issues that call for communicating and influencing beyond their respective organizational boundaries. Community-based organizations (CBOs) play an important and relevant role in providing services at the local level. They work in a variety of different fields, such as education, health, the rights of the disabled, gender issues, etc.
Legal Framework for NGOs in Pakistan
- The Societies Registration Act, 1860; This Act applies to charitable societies with a wide range of public benefit purposes.
- The Trust Act, 1882; This act applies to private trusts with a wide range of purposes.
- The Companies Ordinance, 1984 (section 42); This section of the Ordinance applies to not-for-profit companies formed to promote useful objects.
- Voluntary Social Welfare Agencies Registration and Control Ordinance 1961; This Ordinance defines permissible purposes within the social welfare field. Registration under this legislation is mandatory if organizations wish to receive government funding.
The Societies Registration Act, 1860
Societies or NPOs that are registered under the Societies Registration Act 1860 are dedicated to promoting literature, science, the fine arts, and the diffusion of useful knowledge. They also aim to spread political education and serve charitable purposes.
A group of seven or more individuals who are involved in literary, scientific, or charitable activities, promoting knowledge, establishing or supporting libraries and reading rooms, public museums, art galleries, collections of natural history, inventions, or designs, management, supervision, and overseeing local institutions such as schools, health centers, and welfare facilities, can come together and form a society. They need to sign a memorandum of association and submit it to the Registrar of Societies.
The Trust Act, 1882
A public charitable trust is established to serve the greater good of society as a whole or for certain segments of society. This Act applies to the entire country of Pakistan, but it does not impact the regulations of Muslim law regarding waqf. A waqf under Muslim law is typically established for a noble cause, such as promoting piety, charity, or religious activities. As a trust property vests in trustees, waqf property is believed to vest in Almighty Allah.
A trust can be established for various lawful purposes, including the promotion of religion, knowledge, public health and safety, and other beneficial activities. A trust’s purpose is considered lawful unless it is prohibited by law or if it would undermine any legal provisions, involve fraud, cause harm to others or their property, or if the Court deems it immoral or against public policy.
As per the Trust Act 1882, for a trust to be valid in relation to immovable property, it must be declared through a written non-testamentary instrument signed by the author of the trust or the trustee and registered. Alternatively, it can be declared through the will of the author of the trust or the trustee.
In the case of movable property, a trust is valid if it is declared in the same manner as mentioned above or if the ownership of the property is transferred to the trustee. A Trust can be created through a settlement deed and the corresponding rules under the Trusts Act 1882.
Companies Ordinance, 1984
Associations not for profit are established under section 42 of the Companies Ordinance, 1984. This ordinance outlines two different types of associations that are established for non-profit purposes. An Association not for profit is an organization established to serve the public or promote mutual benefit rather than solely pursuing personal gain.
As per Section 42 of the Companies Ordinance, 1984, the primary goals of the Association are to foster commerce, social services, religion, art, science, sports, charity, or any other beneficial activities, and utilize any profits or income towards advancing these objectives. Upon registration, the Association will have the same privileges and obligations as words Limited, Private Limited company, with the exception of using certain specific terms.
In order to become registered as an Association for non-profit purposes, the first step is to acquire a license under Section 42 of the Ordinance from the Securities & Exchange Commission of Pakistan. Following that, the Association can then proceed to register as a company. The organization is typically a non-profit company with no shareholders.
The Co-operative Societies Act, 1925
- This Society is a type of organization where individuals come together voluntarily based on a shared economic need, treating each other as equals.
- A cooperative society is registered when the members themselves are the intended beneficiaries.
Non-profit Public Benefit Organizations (Governance and Support) Act 2003
A public benefit organization is a nonprofit association that is independent of government control. It is established for one or more public benefit purposes and can include local branches of foreign organizations. However, it does not include foreign organizations operating in Pakistan that have a charter signed by the Government of Pakistan or where a protocol exists between the government and the organization.
Regulatory Framework
The Ministry of Social Welfare and Special Education and the Provincial Social Welfare Departments oversee the registration and monitoring of organizations under the Voluntary Social Welfare Agencies (Registration and Control) Ordinance 1961. The District Offices of the Industry Department handle the registration of organizations under the Societies Registration Act 1860.
Not-for-profit companies must obtain a license from the Securities and Exchange Commission (SEC). There are specific requirements that need to be fulfilled in order for the SEC to approve a license. These include strict regulations on financial transactions and company structure, with a focus on transparency and accountability. The rules prohibit any payments to members and trading and require companies to have public company and limited liability status.
Additionally, there are provisions in place to prevent changes to the memorandum and articles of association or members from resigning without SEC approval. Afterwards, individuals are required to submit an application for a Certificate of Incorporation at one of the eight Company Registration Offices. International NGOs must complete the registration process and enter into a Memorandum of Understanding (MOU) with the Economic Affairs Division.
Although there is no legal requirement, international NGOs generally recognize that not registering can create difficulties with other government agencies, potentially impeding their work. Furthermore, the Minister of Interior must carefully examine foreign personnel before granting registration approval and authorizing their operations in specific regions.
