Companies Act, 1973 (Act No. 61 of 1973)

Chapter III: Types and forms of Companies

Conversion of One Type or Form of Company into Another Type or Form of Company

21. Incorporation of associations not for gain
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1)Any association-
a)formed or to be formed for any lawful purpose;
b)having the main object of promoting religion, arts, sciences, education, charity, recreation, or any other cultural or social activity or communal or group interests;
c)which intends to apply its profits (if any) or other income in promoting its said main object;
d)which prohibits the payment of any dividend to its members; and
e)which complies with the requirements of this section in respect to its formation and registration, may be incorporated as a company limited by guarantee.

 

2)The memorandum of such association shall comply with the requirements of this Act and shall, in addition, contain the following provisions:
a)The income and property of the association whencesoever derived shall be applied solely towards the promotion of its main object, and no portion thereof shall be paid or transferred, directly or indirectly, by way of dividend, bonus, or otherwise howsoever, to the members of the association or to its holding company or subsidiary: Provided that nothing herein contained shall prevent the payment in good faith of reasonable remuneration to any officer or servant of the association or to any member thereof in return for any services actually rendered to the association.
b)Upon its winding-up, deregistration or dissolution the assets of the association remaining after the satisfaction of all its liabilities shall be given or transferred to some other association or institution or associations or institutions having objects similar to its main object, to be determined by the members of the association at or before the time of its dissolution or, failing such determination, by the Court.

 

3)The provisions of section 49(1)(c) of this Act shall not apply to any such association.

 

4)Existing associations incorporated under section 21 of the repealed Act shall be deemed to have been formed and incorporated under this section.