Salient Features Of The Public Benefits Organisations Act, 2013

The Public Benefits Organisations Act, No. 13 of 2013 (the Act), which finally came into effect on the 14th of May, 2024 aims to enhance the regulatory framework governing non-profit organizations aiming for a more streamlined and effective mechanism for their operation and governance.  

The PBO Act defines a public benefits organization as a voluntary membership or non-membership grouping of individuals or organizations, that is autonomous, non-partisan, non-profit making and is operated locally, nationally or internationally, engages in a public benefit activity and registered in accordance with the PBO Act. 

A public benefit is an activity that supports or promotes the 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 individuals or organizations. 

The Act introduces provisions that ensure more autonomy, better governance and increased accountability for Public Benefits Organizations (PBOs). 

 Key Features and Implications of the PBO Act: 

1.     Repeal of the NGO Co-ordination Act 1990. 

The Act repeals the NGO Coordination Act, requiring NGOs to transition to the new framework provided under the Act. Every NGO that had been registered under the repealed law is required to seek registration as a PBO within a year from the commencement date of the Act. In addition, any NGO that was exempted from registration under the provisions of the repealed Act is required to apply for registration under the PBOs Act within three (3) months of the Commencement Date 

2. Oversight by the Public Benefit Organizations Regulatory Authority. 

The newly established authority replaces the NGO Board as the regulatory body responsible for implementing the PBO Act's provisions.  

3. Automatic Registration. 

A significant feature of the PBO Act is the provision that allows for the automatic registration of PBOs if the PBO Authority fails to process a registration application. Should the Authority not respond to an application within sixty (60) days, the entity involved is automatically considered registered.  

This element of the Act helps to overcome the procedural delays that previously hindered the registration process, thereby making it easier for PBOs to commence their operations. 

4.    International Organizations. 

International public benefits organizations that intend to operate in Kenya are subject to specific regulatory requirements under the PBOs Act. The Authority may either exempt the organization from registration or require the organization to apply for registration as an international organization. The organization shall not be exempt from registration if it engages in direct implementation of any activity or program in Kenya. An International organization that does not intend to directly implement its activities in Kenya shall be issued with a permit to operate in Kenya.  

An organization registered as an international organization shall be required to: 

1. Ensure at least one-third of its directors are Kenyan citizens and residents of Kenya; 
2. Appoint an authorized agent who is Kenyan; and 
3. Maintain an office in Kenya. 

5. Formation of the National Federation of PBOs. 

The Act establishes a national federation of PBOs to promote self-regulation within the PBO sector. By promoting self-regulation, the PBO Act seeks to improve the effectiveness of PBO activities.  

6. Dispute Resolution for PBOs. 

The Act establishes the Public Benefits Organizations Disputes Tribunal which aims to resolve disputes relating to the provisions of the Act ensuring that grievances are addressed effectively. 

7. Operational and Financial Accountability. 

The PBO Act emphasizes financial transparency and accountability, requiring PBOs to maintain proper books of accounts and to submit audited financial statements annually.    

Transitional Provisions 

All NGOs that were registered under the repealed NGO Co-ordination Act shall be deemed to be registered under the PBO Act and have up to one year from the commencement date to register under the PBO Act. 

If an NGO fails to register as a PBO under the PBO Act within one year, the NGO shall cease to have PBO status. 

 Upon the commencement of the PBO Act, persons other than public officers who were members of the former Board immediately before the commencement of this Act will automatically become members of the Authority’s Board. They shall serve for the remaining duration stipulated by the Act and they shall be eligible for reappointment once.  

The Executive Director of the NGO Co-ordination Board will retain his position as Director under the PBO Act for the remaining duration and shall be eligible for re-appointment. 

Organizations must navigate the transition to the new framework and adhere to the registration and governance requirements provided in the PBO Act. 

The Board is presently engaged in formulating regulations/directions for the registration of PBOs under the PBO Act.