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I. Legal Regime of NPOs
A) Constitutional Dispositions
There is no single law in Belize that covers the formation or regulation of non-profit organizations and consequently no statement of principles or policies which NPOs must observe.
The Belize Constitution states at Article 3 that every person is entitled to the fundamental rights and freedoms of the individual, and Article 13 states as follows:
13. (1) Except with his own consent, a person shall not be hindered in the enjoyment of his freedom of assembly and association, that is to say, his right to assemble freely and associate with other persons and in particular to form or belong to trade unions or other associations for the protection of his interests or to form or belong to political parties or other political associations.
(2) Nothing contained in or done under the authority of any law shall be held to be inconsistent with or in contravention of this section to the extent that the law in question makes reasonable provision -
(a) that is required in the interests of defense, public safety, public order, public morality or public health;
(b) that is required for the purpose of protecting the rights or freedoms of other persons;
(c) that imposes restrictions on officers in the public service that are required for the proper performance of their functions; or
(d) that is required to prohibit any association the membership of which is restricted on grounds of race or colour.
It is basically this Article of the Constitution which enables persons to form associations including non-profit organizations, without the need for any law to permit them to do so. It is therefore possible for persons to form any organization, including one for any non-profit purpose, without submitting themselves to any regulatory law. If, however, they choose to give their organization a name other than the surnames of the members, they must register that name under the Business Names Act.
This does not result in the registered business having a legal personality; it's main function is to prevent businesses from using misleading names or the names of other registered businesses. Some non-profit organizations begin life by merely registering a business name and then register as a company; such, for example, is the case of the Belize Association of Producer organizations, which is a branch of ASOCODE, and began operations in Belize about five years ago, and which registered its name under the Business names Act, but which was only incorporated under the Companies Act in 1997.
B) Types of Legal Organizations
The laws of Belize provide specifically for two types of organizations that in a sense may be considered not-for profit-organizations. The Friendly Societies Act allows any number of persons to form a friendly society for the purpose of raising by voluntary subscription of the members or by donations a fund to be used to assist members in case of death, sickness, old age, etc. And the Building Societies Act allows any number of persons to form a society for the purpose of raising by subscriptions of the members and by loans a fund for making advances to members. The Act allows building societies to issue shares to members, and in effect such societies operate more as lending agencies than as true non-profit organizations. For our purposes, therefore, we may safely ignore these two Acts in considering the legal regime governing non-profit organizations in Belize.
There is also the possibility of a particular non-profit organization being incorporated by virtue of a special Act of parliament. Such is the case, for example, with the Red Cross Society, which was incorporated by a special Act of 1983 known as the Belize Red Cross Society Act. The Act sets out the general objects of the Red Cross Society, which include the basic functions of the international Red Cross, and declares that "the Society is hereby recognized by the Government as a Voluntary Aid Society auxiliary to the public authorities and in particular in the sense of Article 26 of the First Geneva Convention of 1949". It adds that "the independence and voluntary nature of the Society shall at all times be respected in accordance with the resolution relative to National Red Cross Societies adopted by the General Assembly of the United Nations on the 19th November, 1946".
No law of Belize defines or recognizes such an entity as a "voluntary aid society"; clearly the phrase is used in the Belize Red Cross Society Act with reference to the Geneva Convention, and the phrase has no legal meaning for any other organization in Belize.
C) Non-Government Organizations
The organizations which operate as "non-government organizations" or NGOs are almost invariably registered under the general Companies Act, through which all companies, most of which are of course for-profit companies, become incorporated in Belize.
By incorporation under the Companies Act, the incorporated body acquires a legal personality, with power to hold land in its own name, enter into contracts, and do all lawful things under its own name as are authorized by its constitution (known as the Memorandum and Articles of Association).
The Companies Act enables the formation of companies with limited liability, which can be private or public companies, and limited by shares or limited by guarantee. The Act is silent about non-profit organizations, although it would be illogical for a non-profit organization to issues shares to members, and consequently the NPOs registered under this Act are private companies limited by guarantee. This means that members of the organization agree to be personally liable up to a certain sum (usually quite small, such as Bze. $25 or $50) in case the company goes into bankruptcy or is dissolved.
The Act requires the company to register two documents: the Memorandum of Association and the Articles of Association.
D) Objects Recognized by Law
The Memorandum of Association must state the name of the company, the address in Belize of the registered office and the objects of the company. The company can only so such things or perform such acts as are authorized by the objects stated in its Memorandum of Association.
If the liability of the members is limited, it must also state this, and carry the word "limited" as part of its name.
There is a special provision which refers to non-profit organizations, under the general heading of "Associations not for profit":
20 (1) Where it is proved to the satisfaction of the Minister that an association to be formed as a limited company is to be formed for promoting commerce, art, science, religion, charity or any other useful object, and intends to apply its profits (if any) or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Minister may by license direct that the association be registered as a company with limited liability, without the addition of the word "Limited" to its name, and the association may be registered accordingly.
(2) A license by the Minister under this section may be granted on such conditions and subject to such regulations as he may think fit, and those conditions and regulations shall be binding on the association, and shall, if the Minister so directs, be inserted in the memorandum and articles, or in one of those documents.
(3) The association shall on registration enjoy all the privileges of limited companies, and be subject to all their obligations except those of using the word "Limited" as any part of its name, and of publishing its name, and of sending lists of members and directors and managers to the Registrar of Companies.
The Companies Act also requires companies limited by guarantee to register Articles of Association, signed by the subscribers to the memorandum, which prescribe the regulations for the company. These articles define how the company is governed.
The memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member to observe all the provisions of the memorandum and articles. Copies of these documents must be made available to every member on request.
Apart from section 20 quoted above, there is only one other section of the Companies Act dealing with Associations not for profit, and this is a restrictive condition which reads as follows:
19. A company formed for the purpose of promoting art, science, religion, charity or any like object, not involving the acquisition of gain by the company or by its individual members, shall not, without the license of the Minister, hold more than two acres of land, but the Minister may by license empower any such company to hold lands in such quantity, and subject to such conditions, as he thinks fit.
The Act also requires that an annual general meeting be held in each calendar year, and not more than 15 months after the last preceding general meeting. Minutes of general meetings and of its directors or managers must be entered in books kept for that purpose.
The Articles of Association of NGOs include a stipulation to the effect that the income and property of the organization howsoever derived shall be applied solely towards the promotion of the objects set out in the Memorandum of Association and that no portion thereof shall be paid or transferred directly or indirectly by way of dividend, bonus or otherwise howsoever to its members. There is a proviso, however, allowing the payment in good faith to any officers or persons employed by the NGO in return for special services rendered.
The Companies Act does not restrict a priori the objects of any company: so long as the objects are lawful and are included in the Memorandum of Association of the company they are recognized by law. What NGOs do normally is to place as the first few objects (normally five to fifteen, depending on the breath of scope of the organization) in their Memorandum the primary objectives of the organization, and then have a large number of general articles which empower them to do a number of things, such as to purchase or lease property, to borrow and lend, to invest, to take any gift, to undertake any construction, to carry on several business operations, and so on.
E) Winding-up and Dissolution
The winding up of a company is governed by Part IV of the Companies Act, and it may be either by the court or voluntary or subject to the supervision of the court. A company may be wound up by the court if the company so requests by special resolution, if default is made in filing the statutory report or in holding the statutory meeting, or if the company suspends its business for a whole year, or if the company is unable to pay its debts, or, in the case of a private company, if its membership falls below two persons, or if the court is of opinion that it is just and equitable that the company be wound up.
Normally NGOs, being limited by guarantee, have a clause in their Memorandum of Association stating that in the case of the company being wound up each member undertakes to contribute to its assets for the payment of the debts and liabilities of the company contracted while the person was a member or within one year afterwards an amount not exceeding, for example, fifty dollars.
Many NGOs also include a provision that any surplus left after the dissolution of the company will not be distributed to the members but rather will be given to a like-minded NGO. The Articles of Association of the Association of National Development Agencies (ANDA, a network of development-oriented NGOs), for example, states that
"If upon the winding up or dissolution of the agency there remains, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed to its members but rather to other institutions having objects similar to the objects of ANDA, and which shall prohibit the distribution of its or their income or property among its or their members to an extent at least as great as is imposed on ANDA under [the Articles], such institution or institutions to be determined by the members of ANDA at or before the time of dissolution, and if and so far as effect cannot be given to such provision then to some charitable object."
F) Participation of Organs in the Constitution of NPOs
As implied above, there are no organs that participate in the constitution of NPOs; it is a question of individuals coming together and forming an association in the manner described. Nor are there any legal provisions requiring any NPO to register with any Ministry or other organ of government.
G) Foreign NPOs
The Companies Act at section 249 declares that all companies incorporated outside Belize which establish a place of business within Belize shall within one month of the establishment of the place of business deliver to the Registrar a copy of its constitution, a list of the directors and secretary and their names and addresses of the person(s) resident in Belize authorized to accept service of documents on behalf of the company, whereupon it shall have the same power to hold lands in Belize as if it were a company incorporated under the Companies Act.
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