non_business organiastion: incorporated trustees

An Incorporated Trustee consists of a community of persons bound together by custom, religion, kinship or nationality or a body or association of persons established for any religious, educational, literary, scientific, social, development, cultural, sporting or charitable purpose. Section 823(1) CAMA 2020.

Only a person at law is qualified to be appointed a trustee. According to Section 826(1) CAMA, 2020, the following persons are disqualified from being trustees:

• a. An infant is not qualified to be appointed as trustee but can be a member of the association.
• b. A person of unsound mind who had been found to be so by the court.
• c. An undischarged bankrupt.
• d. A person convicted of an offence involving fraud and dishonesty within five years of his proposed appointment.

The following are the essential features of Incorporated Trustees:

• a. Only the trustees have corporate personality and not the community, body or association. Section 823(2), 830(1) CAMA, 2020.
• b. The proposed name must contain “Incorporated Trustees of.” Section 825(1) (a) CAMA, 2020.
• c. An Incorporated Trustee in its constitution must have a special clause on application of its income and capital and transfer of its assets on its dissolution.
• d. An Incorporated Trustee does not do business and does not distribute profits
• e. An Incorporated Trustee receives income as grants and levies.
• f. The income obtained by an Incorporated Trustee must be applied solely towards the promotion of its objects.
• g. Income made by an Incorporated Trustee not distributable but out of pocket expenses can be paid to members.
• h. An Incorporated Trustee must evince ownership of landed property or undertaking in lieu.

The persons who may register an Incorporated Trustee are religious bodies, clubs and social cultural associations, schools, foundations, etc.

The contents of the Constitution of an incorporated Trustee are the following:

• a. Preamble
• b. Name clause
• c. Address clause
• d. Aims and Objectives clause
• e. Trustees clause
• f. Common seal clause
• g. Meeting clause
• h. Governing body clause
• i. Sources of income clause
• j. Application and disbursement of funds clause
• k. Keeping of accounts clause
• l. Auditors’ appointment clause
• m. Constitution amendment clause
• n. Special clause

The procedure for the registration of an Incorporated Trustee is as follows:

• a. Application is submitted to the Corporate Affairs Commission electronically.
• b. The application must be accompanied by separate enclosures as follows:
• 1. Form for availability and reservation of name.
• 2. Rules of the applicant body incorporating its objects duly signed.
• 3. Impression or drawing of the proposed common seal of the applicant body if any.
• 4. Duly signed copy of the extracts of minutes of the meeting where the trustees were appointed.
• 5. A copy of the resolution adopting the special clause.
• 6. Evidence of land ownership or an affidavit in lieu.
• 7. Evidence of advertisement in two national dailies.
• 8. Sworn affidavit by each trustee in the prescribed form that they are not disqualified from acting as trustees under Section 826 of the Companies and Allied Matters Act.
• 9. Payment of the prescribed filing fee.
• 10. Letter authorizing the person effecting registration of the applicant body to so act.

The details which an application to register an Incorporated Trustees must contain are the following:

• a. The name of the proposed corporate body which must contain the words, “Incorporated Trustees of.”
• b. Registered office address
• c. Publication details
• d. Aims and objectives of the association.
• e. Trustees details which include personal information, residential address and service address.
• f. Secretary’s details which include the personal details and service address.
• g. Impression of common seal where there is any.
• h. Enclosures
• i. Details of the chairman.

Incorporated Trustee and a Company Limited by Guarantee are similar in the following ways:

• a. Both bodies enjoy tax exemptions.
• b. Both bodies are non-profit oriented.
• c. Both bodies are administered by the Corporate Affairs Commission.
• d. Both bodies enjoy the benefits of incorporation or winding up. For these bodies however, upon settling on the claims against it, where it is being dissolved, the remaining assets of the body is to be transferred to a body with similar objects. Section 26(9), Section 850(4) CAMA, 2020.

The difference between an Incorporated Trustee and a Company Limited by Guarantee are as follows:

• a. A company limited by guarantee may do business but an Incorporated Trustee does not. Section 823 (1) CAMA, 2020.
• b. A company limited by guarantee requires approval of its memorandum by the Attorney General of the Federation while an Incorporated Trustee has no such requirement. Section 26 (4) (5) CAMA, 2020.
• c. Incorporated trustee must fulfill the advertisement requirement before registration but a company limited by guarantee need not advertise. Section 828 CAMA, 2020.

The books to be kept by an Incorporated Trustee are the following:

• a. Books of account showing income and expenditure.
• b. Minutes book.
• c. Register of trustees.
• d. Register of members.

An Incorporated Trustee can only be brought to an end by dissolution as opposed to winding up in the case of companies. The dissolution of an Incorporated Trustee can be actualized subject

According to Section 850(1) of the Companies and Allied matters Act, the following are the persons who can bring a petition for the dissolution of an Incorporated Trustee:

• a. The Governing Council of the Incorporated Trustee.
• b. One or more of the trustees.
• c. Members of the association constituting not less than fifty percent of the membership.
• d. The Corporate Affairs Commission.

According to Section 850(2) of the Companies and Allied Matters Act, the following are the grounds upon which an Incorporated Trustees may be dissolved:

• a. Realization of the aims and objects for the establishment of the association, and no useful purpose will be served by further keeping the association alive.
• b. The association was formed to exist for a specific period and that period has expired and it is not useful to still keep the association alive.
• c. That the aims and object of the association have become illegal and contrary to public policy.
• d. That it is just and equitable that the association be dissolved.
• e. The certificate of registration of the association has been withdrawn, cancelled or revoked by the Corporate Affairs Commission.