Category Archives: Opinions and Analysis

General Process:

  1. Preparation of the Trust Deed by the advocate;

The Trust deed shall contain the following pertinent information: name and objectives of the Trust, full names and addresses of the Trustees and their powers thereto. Thereafter it must be signed by all the Trustees.

  1. Payment of Stamp Duty;

After preparation of the Trust Deep and the document being signed appropriately by the Trustees. The Trust Document is submitted for Stamp duty.

  1. Registration under the Registry of Documents Act;

The trustees can commence implementing the objects of the trust as a simple trust i.e. a duly executed trust deed once registration has been finalized at the Registry of Documents at Ardhi House.

  1. Incorporation under the Perpetual Successions Act;

After step (c) above, the advocate shall lodge with the Minister of Lands, a Certified copy of the trust deed and a petition for incorporation prepared in the prescribed form. The process takes an average of 7-10 months to procure the Certificate of Incorporation of the trust.

 

Why Go a Further Step to Incorporation a Trust:

Once a Trust is incorporated under the Trustees (Perpetual Succession) Act Chapter 164 of the Laws of Kenya, the trustees shall thereupon become a body corporate by the name described in the certificate, and the Trust shall be able to:

  1. have perpetual succession and a common seal;
  2. power to sue and be sued in their corporate name; and,
  3. subject to the conditions and directions contained in the certificate, to hold and acquire, and by instruments under the common seal to convey, transfer, assign, charge and demise any movable or immovable property or any interest therein now or hereafter belonging to, or held for the benefit of, the trust concerned in the same manner and subject to such restrictions and provisions as trustees might so do without incorporation”.

Another advantage is that the Income Tax Act provides that the income of a registered trust is exempted from taxation.  The Finance Act 2006 further provides that any contributions made from a tax exempt entity shall be exempt from tax – this mainly applies for charitable trusts and one has to apply to the Minister to be exempt from paying taxes.

Further, charitable trusts are exempted from paying land rates payable on its immovable properties and also are exempted on stamp duty when buying land and property;

In addition, since charities are widely recognized as existing for social good this shall attract and aid in fundraising. To note, organizations with charitable status cannot use assets for any purpose other than the pursuit of charitable objectives. The assets of a charity can never be used for private benefit.

 

Cons to Note in the Process of the Incorporation of a Trust:

  1. The process is quite lengthy especially the second stage which is the incorporation of the Trust as this may take more than 6 months;
  2. The paperwork is tedious;
  3. The process is costly compared to say; incorporating a company;
  4. Individuals on the board of a charity, often referred to as trustees, must not be paid unless the constitution of a charity, authorizes it;
  5. Charities cannot raise equity investment.

 

Costs and Requirements:

Should you be interested to work with us, please contact us on enquiries@jradvocates.com for any further information.

 In Kenya, trademarks are registered under KIPI – Kenya Intelelctual Property Institute, and the general procedure is as follows:

  1. Name Search: Before applying for the registration of a trade mark, an applicant should conduct a search to find out whether the trademark is registrable or not and also whether there exists in the records a trademark which could be confused with the intended trade mark.
  1. Application for registration: A person claiming to be the proprietor of a trade mark, used or proposed to be used by him, and who is desirous of registering it should apply to the Registrar onthe requisite forms accompanied by seven (7) representations of the mark.
  1. Examination: Once the Application for registration is received, it then proceeds for examination. The mark will undergo three types of examination:
  1. Formality examination:this involves finding out whether the right documents are filed, whether the forms included are properly filled, and the required fees is appropriately paid.
  2. Search:A Search is conducted to ascertain that there is no similar or closely resembling mark is on the register, otherwise the present application can be refused on that ground. If there exists a similar mark from the same applicant ordinarily an association is requested.
  • Substantive examination:During substantive examination, the mark is examined as to its distinctiveness.

Once the examination is complete KIPI will then communicate to the applicant or the Agent of the approval or disapproval. Incase of approval, the mark proceeds to advertisement. Incase of disapproval, one may appeal against the decision or abandon the application.

  1. Advertisement: Once the Application accepted, advertisement is the next step. The Trade mark is advertised in the KIPI Journal (which is published monthly). This is to allow any interested party an opportunity to raise objections to the pending application prior to registration.
  1. Opposition: Any aggrieved party with valid grounds may oppose the registration of a trade mark so advertised in the Kenya Gazette. An opposition must be made within 60 days of the publication date, by filing a statement of opposition.
  1. Registration: If there is no opposition to the trade mark after the statutory 60 days period from the date of advertisement, or if an opposition has been decided in the applicants favour, the application will be registered and the Institute will issue a Certificate of Registration and enter the registration.

Please however note that despite the lengthy process, the mark is deemed registered as of the date of the application for registration, and that date is deemed to be the date of registration. However pelase note once the Mark goes through the examination stage, another entity cannot then lodge the same mark for registeration. It shall be deemed to be unavailable for registeration for any subsequent entities.

A trade mark registration is valid for ten (10) years from the date of application. Six (6) months prior to the expiry of the ten (10) years, the registrar will notify the owner of the trade mark of the imminent expiry of the concerned trademark. The owner may then apply for a renewal which covers the next ten (10) years and the renewal can continue every ten (10) years thereafter upon payment of the requisite renewal fee.

 

Costs and requirements:

Should you be interested in working with us, please contact us on enquiries@jradvocates.com for further information.

 

 The Kenya Copyright Board (KECOBO) registers copyright works of musical, audio visual, literary and artistic nature.

  • The work must be of original authorship.
  • The work should also be in tangible format, including digital format
  • Two copies (one if in digital format) of the work should be submitted with the application form

Copyright lasts for the lifetime of the owner plus fifty (50) years.

The KECOBO registers copyright works under the following categories; Musical, Audio Visual, Literary and Artistic. Only original musical, literary, artistic, audio visual works, sound recordings and broadcasts shall be eligible for copyright protection. Original authorship in the Copyright sense means that the work must not have been copied from somebody else.

 

General Registration Process: 

  1. Step 1: We shall aid you in filling in and finalization of the prescribed registration forms.
  2. Step 2: Attach two original copies of the work.
  3. Step 3: Payment of the prescribed registration fee in KECOBO’s bank account or pay the fees via their Paybill Mpesa option.
  4. Step 4: Presentation of the evidence of payment of the prescribed fees together with the duly filled and commissioned registration forms and two (2) original copies of the works at KECOBO.
  5. Step 5: Follow up with KECOBO until we receive the certificate of registration.

 

Timelines:

The original “Certificate of Registration” will be issued within 7-10 days from the date of registration. This allow for a rigorous process of verification of the copyright works offered for registration and it is done by KECOBO’s Legal Department.

Costs and Requirements:

Should you be interested to work with us, please contact us on enquiries@jradvocates.com for any further information.

 

Kenya is a Commonwealth country with a common law system. The two main ways in which to register a not-for-profit organization (“NPOs”) in Kenya are as below:

  1. Non-Governmental Organizations (NGOs); and
  2. Companies Limited by Guarantee; 

The major difference between an NGO and a Company limited by guarantee is that the latter is allowed to engage in trading activities not for profit but rather for the sustenance of the business objectives whereas the former is not. 

Before delving into the two options, lets briefly discuss the PBO’s – the Public Benefit Organizations Act 2013 (“PBO Act”) seeks to regulate NPOs, including NGOs registered under the Non-Governmental Organizations Coordination Act (“NGO Act”). The PBO Act will repeal the NGO Act once a commencement date for the PBO Act is introduced (PBO Act Section 61).

Under Section 5(1) and 5(2) of the PBO Act, a “PBO” is defined as a voluntary membership or non-membership grouping of individuals or organizations, which is autonomous, non-partisan, non-profit, and which is locally, nationally or internationally organized and operated to engage in public benefit activities.  The PBO must also be registered with the Public Benefit Organizations Regulatory Authority, once the relevant authority is established.

At the same time, the PBO category does not include several types of organizational forms, such as:

  • a trade union within the meaning of the Labour Relations Act 2007;
  • a public body established by or under any written law;
  • a political party within the meaning of the Political Parties Act, 2007;
  • a religious organization which is primarily devoted to religious teaching or worship.
  • a society within the meaning of the Societies Act;
  • a co-operative society within the meaning of the Co-operative Societies Act;
  • a Sacco society within the meaning of the Sacco Societies Act;
  • a micro-finance institution within the meaning of the Micro-Finance Institutions Act, 2006;
  • a community based organization whose objectives include the direct benefit of its members. 

 

Public Benefit Status

“Public Benefit Activity” is defined in Section 2 of the PBO Act as “an activity that supports or promotes public benefit by enhancing or promoting economic, environmental, social or cultural development or protecting the environment, or lobbying or advocating on issues of general public interest or the interest or well-being of the general public or a category of individual or organizations.”

An organization that has as its objective the promotion of public benefit in any of the following areas may be registered as a PBO by the Public Benefit Organizations Regulatory Authority: (a) legal aid; (b) agriculture; (c) children; (d) culture; (e) disability; (f) energy; (g) education; (h) environment and conservation generally; (i) gender; (j) governance; (k) poverty eradication; (l) health; (m) housing and settlement; (n) human rights; (o) HIV/AIDS; (p) information; (q) informal sector; (r) old age; (s) peace building; (t) population and reproductive health; (u) refugees; (v) disaster prevention, preparedness and mitigation; (w) relief; (x) pastoralism and the marginalized communities; (y) sports; (z) water and sanitation; (aa) animal welfare; and (bb) youth (PBO Act Sixth Schedule).

The PBO Act permits an organization to register under any of a variety of legal forms, but if an organization registers as a “Public Benefit Organization” in order to receive tax exemptions and other benefits derived from this status, it will cease to be registered under any other law (PBO Act Section 6; See also PBO Act Second Schedule, setting forth in detail some of the “Benefits of Registration” as a PBO).

However, the PBO’s are not operational as at today. 

Now lets delve into the two viable options as below: 

 

  1. NGO’s

The NGO Act defines an “NGO” as “a private voluntary grouping of individuals or associations, not operated for profit or for commercial purposes but which have organized themselves nationally and internationally for the benefit of the public at large or for the promotion of social welfare, development, charity or research in areas inclusive of, but not limited to, health, relief, agriculture, education, industry and the supply of amenities and services”. This definition implies that an NGO should be formed for benefit of public at large and not for trading purposes.

Once an NGO is registered, by virtue of such registration it will be a body corporate with perpetual succession capable in its own name of: suing and being sued; taking, purchasing or otherwise acquiring, holding, charging or disposing of moveable and immovable property; entering into contracts; and doing or performing all such other things or acts necessary for the proper performance of its functions under the NGO Act, which may lawfully be done or performed by a body corporate.

Designation as an NGO confers certain tax benefits and imposes a series of regulations that are relevant to an equivalency determination.

Advantages

Exemptions from duty on imported equipment and goods required for the NGO’s activities in Kenya under certain circumstances

  1. Exemption from Value Added Tax on the NGO’s income generating activities
  2. Exemption from Income tax on the NGO’s expatriate employee’s
  3. Limited liability on members if so provided under the NGO’s constitution. 

Disadvantages

  1. Lengthy delays in the registration process arising from a lengthy vetting process by NGO Board and recommendations from various government ministries.
  2. Annual report must be made in the prescribed form and submitted to the NGO Board on or before 31st may in every year (the reports become part of public records and can be inspected by any person).
  3. Various restrictions. Once registered an NGO must not amend its name or constitution or become a branch of or affiliated to or connected with any organization of a political nature established outside Kenya without the prior written consent of the NGO’s Board.

 

  1. Companies Limited By Guarantee:

A number of NPOs are registered as companies whose liability is limited by the guarantee of the members.

A company limited by guarantee does not usually have a share capital or shareholders, but instead has members who act as guarantors. The company limited by guarantee is regarded as a separate legal entity from its members. The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company.

Although this type of Company may engage in trading activities, any profit derived from such business must be ploughed back to the activities of the company. Distribution of profits made by the company to its members is prohibited by law.

Such companies are usually granted income tax and other tax exemptions on application.

Advantages:

  1. Limitation of personal liability by guarantee;
  2. It has members and not shareholders;
  3. Lack of share-capital allows it to fundraise to further its objectives and the proceeds realized to be ploughed back into the company. Distribution of profits not allowed;
  4. The Non for Profit Organization’s name may exclude the word “limited”.
  5. Exemption from Income tax on application and other rebates; 

Disadvantages:

  1. Lengthy delays in the registration process arising from a lengthy vetting process by the NSIS;
  2. Annual returns must be filed with the companies registry

Timeline:

Approximately 6-12 months. 

Costs and requirements:

Should you be interested to work with us, please contact us on enquiries@jradvocates.com for any further information.