The Non-Profit Organisations (Jersey) Law 2008 (the "Law") came into force on 8 August 2008 and provides for the registration and monitoring of non-profit organizations ("NPO"). The purpose of the Law is to comply with international standards designed to prevent NPOs being used for terrorist financing.
What Is An NPO?
An NPO is an organisation established solely or primarily for charitable, religious, cultural, educational, social, or fraternal purposes, with the intention of benefiting the public or a section of the public and which raises or disburses funds in pursuance of those purposes. It will also include an organization by means of persons acting as trustees of a trust.
What Are The Obligations Of An NPO?
An NPO must be registered if it is established in or administered in or from Jersey, regardless of whether it carries on any activity in Jersey.
To register, an application must be sent to the Commission which must substantially follow the form set out in the Schedule to the Law and be signed and dated by a person acting on behalf of the NPO. The information that must be provided to the Commission includes:
- the name of the NPO and contact details
- purpose, objectives and activities of the NPO
- structure of the NPO
- estimate of the funds to be raised and disbursed in each financial year of the NPO within Jersey and outside Jersey;
Generally, on receipt of the application the Commission will register the NPO by entering its name in the register and by giving it a registration number or reference.
An NPO that is required to register and which fails to do so will be guilty of an offence and liable to a fine. An NPO has until 8 November 2008 to register with the Commission.
Ongoing Obligations Of An NPO
An NPO must give notice to the Commission within three months of a change in its registered information.
A "prescribed NPO" or NPOs within a "prescribed class" must prepare and provide to the Commission a financial statement (which is defined in the Law) for a period of not more than 18 months. This is a continuing obligation. A "prescribed NPO" and "prescribed class of NPO" are defined in the Non-Profit Organisations (Jersey) Order 2008 (the "Order"), but at present, there are no NPOs which fall into these categories.
All other NPOs must keep financial records and retain them for at least five years. The Commission can request this information from the NPO if it is necessary to enable the Commission to carry out its obligations under the Law.
The Public Can See The Register Of NPOs And Request Information
If a member of the public asks the Commission whether a specific name appears in the register as a name of an NPO and that name does, then the Commission must give the member of the public the registration number or reference of the NPO and the details of how it may be contacted If a member of the public requests it, an NPO must provide to that member of the public, details of the NPO's purpose, objectives and intended activities; details of its structure; and if it is a "prescribed NPO", the contact details of each person who has responsibility for running the NPO.
Set out in the Law are some exceptions to the obligations set out in the NPO Law. These are as follows:
- NPOs that do not raise funds exceeding £1,000 - If during the preceding 12 months an NPO has not raised funds that exceed £1,000, it does not need to register or comply with other requirements of the Law.
- Regulated NPOs - Regulated NPOs do
not need to register under the Law, but still must comply with the
obligation to prepare and keep financial records for at least 5
years. A "regulated NPO" is defined in the Order as any
NPO that is provided with services in the course of trust company
business under the Financial Services (Jersey) Law 1998 by:
- a person acting as a director or a trustee that is registered under the Financial Services (Jersey) Law 1998; or
- a person acting as a trustee that is a private trust company business that benefits from the concession set out in paragraph 4 of the Schedule to the Financial Services (Trust Company Business (Exemptions)) (Jersey) Order 2000.
It should be noted that this exception is quite narrow. It is useful for a trust that has as its trustee a private trust company or a regulated trust company. It is also useful for a company that has a director provided by a regulated trust company, but only where that director is itself registered under the Financial Services (Jersey) Law 1998 (the "FSJL Law") (i.e. corporate directors will satisfy this requirement but not individual directors unless they are themselves personally registered under the FSJL Law). We are aware that the Commission is currently revisiting the definition of a "regulated NPO" in the Order so as to broaden this exception.
Offences Under The Law
An NPO will be guilty of an offence and liable to a fine if it:
- passes itself off as a registered NPO when it is not;
- supplies false information or documents, when it is required to supply such under the Law;
- fails without reasonable excuse to provide the Commission with notice of a change of the information registered;
- fails to provide a financial statement or provides a financial statement that is false or misleading in a material way;
- fails to keep financial records or keep financial records that are false or misleading in a material way;
- fails to provide any other information as required to do so under the Law or provides information that is knowingly false or misleading in a material way;
- fails to provide an explanation of the financial records when requested to do so by the Commission.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.