How To Register A Trust NGO in Uganda

How To Register A Trust NGO In Uganda A non-governmental organization can be registered in five different forms in Uganda: company limited by guarantee, institution based association, district based association, non-governmental organization (under NGO act), and as a trust. What Is A Trust? A Trust is a legal arrangement whereby control over property is transferred to a person or organisation (the trustee) for the benefit of someone else (the beneficiary). A Trust can either be a private trust or a public charitable trust. A trust is governed by the terms of the trust document, common law principles, and the Trust Act. Private trusts are governed by the Trusts Act (1882) and are used for private purposes, such as running a private estate or institution. Private trusts are not given any tax benefits by the Government of Uganda. If you want to do some charitable work for public –you can set up a public charitable trust. Uganda does not have a national level law to govern charitable trusts. Typical Characteristics The property of a business trust is managed and controlled by trustees who have a fiduciary duty to the beneficiaries to act in their best interests. Profits and losses resulting from the use and investment of the trust are shared proportionally by the beneficiaries according to their interests in the trusts. Trusts are created for a variety of reasons, including tax savings and improved asset management. Advantages: Limited liability Continued existence – the trust can continue even if there is a change in trustees Limited regulations A trust doesn’t pay tax on profits distributed as benefits to beneficiaries However, the beneficiaries are taxed on their applicable tax schedule A trustee cannot expose the assets to business risk Disadvantages: The lack of regulation and disclosure creates risk for insiders and third parties who deal with the trust Information about the trust is not publically available Trustee and other parties are not personally liable for debts of the trust Steps Involved In Registering A Trust Step 1 Make a list of the assets you want to place in the trust. The trust can hold any type of asset including cash, jewelry, heirlooms, securities, income-producing assets and real estate. The assets make up the core, or corpus, of the trust. You will need the name in which each asset is held, the name and location of the institution holding the asset -- such as a bank or brokerage firm -- and the account number. Step 2 Decide if you want to serve as the sole grantor or if you want another person, such as a spouse or a child, to serve as a grantor along with you. The trustee is the person or entity, such as a bank or trust company, that administers the trust in accordance with the trust documents. Grantors often name themselves as the sole trustee. Consider if you want to name a successor trustee who will manage the trust in case you are no longer capable of carrying out your duties. Step 3 Identify the beneficiaries along with the assets you want to leave to each one. Use the full legal name of each beneficiary whether the beneficiary is a person, a corporation or a charity, along with their current address. Be extremely specific when leaving assets to each beneficiary. For example, if you are leaving shares of stock to your cousin, list the cousin’s full legal name and address, the name of the company that issued the stock, the number of shares, and the name and location of the firm holding the shares to avoid confusion. Step 4 Draft the revocable trust to include the name of the grantors, trustees, beneficiaries and the assets being placed in the trust. At the end of the document, have a signature block where each grantor and trustee can sign. The trust needs to be witnessed at signing. Check with your state’s bar association to see how many witnesses are required and if the trust must be notarized. Be sure the witnesses and notary are uninterested third parties, to avoid any potential conflict of interest. Fund the trust by retitling the assets from your name into the trust’s name. Trusts are registered using a document called TRUST DEED. This document contains all the information about the Trust and is printed/written/typed on plain A4 size papers. Along with these papers you would need to attach Non-Judicial stamp paper (which you can get from a notary or the lawyer). All the Trustees and witnesses will have to give thumb impressions and signatures on these papers. All in all, you will need help of a notary to prepare the papers. You also need a No-Objection Certificate (NOC) from the owner of the property where the registered office of the trust is to be situated. If you’re the owner of the property, then you don’t need to worry about NOC Items to Mention in Trust Deed Following elements must be mentioned in the Trust Deed document:1.Name and address of the Settler (Settler is the person who is setting up trust) Name(s) and address(es) of the other trustees Name of the trust Minimum and maximum number of trustees your trust can have Address of the registered office of the trust Objectives of the trust Rules And Regulations Of The Trust For registering a trust you need minimum two trustees (i.e. one settler and another person). You can decide the maximum number of trustees and this number must be mentioned in the trust deed. All the trustees together are called Board of Trustees. This board collectively governs the trust. Unlike societies, in case of trusts all or some of the trustees can be related persons (i.e. they may belong to the same family) Trusts are irrevocable –unless it is mentioned in the trust deed. This means that the trust cannot be wound up. Trustees are usually life-long members or their tenure is specified in the deed. Electoral process is not involved in the appointment of trustees. Board of Trustees can also have various designations for trustees. Common designations are Chairperson and Managing Trustee Trustees cannot draw any remuneration from the trust fund. However, they may take reasonable compensation for the professional services they provide to the Trust. Profits earned by the Trust (e.g. interest gained from bank) cannot be distributed among the trustees. Trust Deed can be amended through a Supplementary Trust Deed. Most important part of the Trust Deed that you should pay special attention to is objectives of the trust. You should be as thorough as possible in writing down trust objectives so that you can function smoothly without any problems. At the time of registration, only the Settlor and two witnesses are required to be present in front of the Sub-registrar under whose jurisdiction the registered office address comes. Sub-registrar will check IDs of these people. After that the Trust Deed will go to the counter where data entry takes place. In the end, Settlor and two witnesses will be photographed. After about one week of submitting the papers, you can go back to the registrar’s office to receive a certified copy of the Trust Deed. Trust income is exempted from income tax. But to avail this facility, after registration, you need to acquire a certificate of exemption from Uganda Revenue Authority. Donations to the public charitable trusts are also exempted from tax (i.e. the donor will not have to pay tax on the amount he donates to the trust). For this, you need to acquire certificate from Uganda Revenue Authority. Use A Lawyer It’s recommended that a reputable firm of attorneys, with experience in trust law, should be approached. The attorney will advise on the drafting of the trust deed, registration of the trust deed and obtaining letters of authority. Nobody may act as a trustee until authorized. ………………………………………………. Author’s Profile-Ojijo Pascal Ojijo is the Founder & Lead at GoBigHub.com, a nonprofit founded to connect local entrepreneurs to local investors across cities in Africa. GoBigHub believes that the challenges that face Africa including poverty, disease, and low productivity, can be best solved by enabling scalable enterprises to access affordable capital and strategic business advise. We fill this gap through co-shared office space; platform for entrepreneurs to pitch their ideas to investment clubs; mentoring entrepreneurs to build effective business systems that can attract capital; and sensitizing investment clubs and cooperatives to consider private equity investment in SMEs as venture capitalists. GoBigHub is leading the move away from grants, promoting trade, not aid, with special focus on youth and women enterprises. Ojijo is privately a consultant in communications (public speaking, strategic planning, and writing); an expert lawyer specializing in ICT law, financial services law, law firm management, and legal rhetoric); a public speaker and coach on financial literacy and personal branding; and a consultant in collective investment schemes (investment companies, investment clubs, provident funds, and cooperatives). He also owns a software for cooperatives, a software for investment clubs, and a financial literacy board game, chapchap. Over a period of 9 years, Ojijo has worked with a broad scope of clientele including Ministry Of Foreign Affairs Cooperative; National Environmental Management Authority(Uganda); Kenya Association of Investment Groups (AKIG); Kawanda National Agriculture Research Organization; Gender Ministry (Uganda); Nsamizi Institute(Mpigi-Uganda); 4Cs-Kenya; CREDO-Kenya; KHRC-Kenya; Foundation for Human Rights; Africa Youth Development Link; Technoserve; AIESEC; AYDL; UMYDF; CCEDU; FOWODE; PEDN; Foundation for Human Rights; over 20 investment clubs, over 50 individual clients, at least 15 cooperatives; and several other universities, companies, and individuals on various areas of expertise. He offers advisory support in legal and or strategic areas in various boards of various investment clubs, cooperatives, Bank of Uganda Financial Literacy Advisory Group, Uganda Financial Literacy Sharing Group (FLISG), and Competitiveness Secretariat of Uganda Ministry of Finance supported Investment Clubs Association of Uganda-ICAU. Ojijo is an author of 49 books; Inua Kijana Fellow; Performance Poet’ Armature Pianist; and entrepreneur owner of luopedia.com, commonsenseapp.net,  lawpronto.com, naniwapi.com, gobighub.com, allpublicspeakers.com,   uzimafoods.com, and achibela.com. M: +256776100059. E: ojijo@gobighub.com