Advantages Of A Church Holding Its Property Through An Incorporated Trust.

Churches are registered under the Societies Act, Cap 108, Laws of Kenya. Unlike registration under the Companies Act or the Limited Liability Partnership Act, this registration does not confer artificial personality. This means that the church, even though registered, cannot hold property in its own name and does not have a legal personality separate from its officials and members. We note that this unincorporated status leaves the church exposed to the abuses by officials who insist on registering the church’s property in their individual names. Although the property may be held in trust by the church’s officials, many churches do not get into legally binding trust deeds and on an acrimonious separation or in the case of an untimely death of the registered proprietor, the church’s property rights may be unjustly denied or otherwise diminished.As an alternative to the foregoing, a church can incorporate a trust to hold its property. The registration of trusts in Kenya is governed by the Trustees Perpetual Succession Act, Cap 164, Laws of Kenya.  Notably, this Act allows registration of a trust for religious purposes among other purposes.This registration gives the church the following benefits:

1. An incorporated trust shall create a separate legal identity from the individual, members, leaders and trustees as it will enjoy perpetual succession;
2. It will allow the Church/religious organization to hold its properties and assets in the Trust’s names as opposed to being held in the names of the trustees or officials;
3. It will protect individual church members from personal liability in case of debts and other legal obligations of the church;
4. The Trust can also be sued or sue in its own name without necessarily involving it’s members in their individual capacity; and
5. The Trust can enter into legal contracts in its own name. This offers credibility in dealings with third parties.

Conclusion In conclusion, we recommend that after registering a church under the Society’s Act, the members and officials should also incorporate a trust for purposes of holding the church’s property.   In addition to the noted advantages, the registration eases the process of procuring an exemption certificate from KRA and general dealing with property.   At CM Advocates LLP, we would be happy to assist you in registration of Churches/Religious organizations, Charitable Trusts and related legal advisory. If your require such help,  please contact us on  Email : law@cmadvocates.com or book a virtual consultation for this or any other legal matter  here . N/B Please don’t miss out our next Article, on the Immigration law aspect specifically for non-Kenyans who wish to operate Churches/Religious Organizations, Charitable Trusts, NGOs and such related not for profit organizations here in Kenya. Please click here to download the article

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Victorine Rotich -  Senior Associate & Head of Unit Wahu Wambugu- Immigration Lawyer

Disclaimer

This article is for informational purposes only and should not be construed as legal advice.