Dissolution of an NGO

Dissolution of an NGO in Uganda

Under the repealed Non Governmental Organizations Registration Act cap 113 section 13; as amended by s.10 of the Non Governmental Organizations Registration (Amendment) Act 2006; the minister was empowered to make regulations among others prescribing the manner in which Organizations shall be wound up when they cease to operate. The procedure for dissolving NGOs was therefore not elaborated in the Act but in the regulations.

Regulation 17 of the Non Governmental Organisations Regulations of 2009 regulations provided for dissolution of Non Governmental Organizations by way of voluntary dissolution where the members were required to pass a resolution according to the constitution of the organization requiring the organization to be dissolved. Dissolution would then follow in accordance with the dissolution clause in the constitution.  Thus the manner in which an organization could be wound up/ voluntarily dissolved was laid out in its constitution. The assets and liabilities of the organization would then be dealt with in accordance with the relevant provisions of its constitution.

The 2016 Act has saved the 2009 regulations. This means that the regulations continue to apply as the relevant regulations for purposes of enforcement of the 2016 Act. However, only those provisions which are not inconsistent with the Act are saved. The Act introduced new provisions on dissolution of NGOs which are the applicable provisions. The provisions on dissolution under the 2009 Regulations were therefore repealed in so far as they are inconsistent with the 2016 Act.

Section 48 of the Act provided that dissolution may either be voluntary or by order of court.

Voluntary dissolution is captured under s.49 of the Act. Members of the organization may by resolution in accordance with the constitution of the organization dissolve the organization. The organization which intends to dissolve passes a resolution for voluntary dissolution and must within 14 days of passing such resolution inform the Bureau of the resolution and the reasons for the resolution and also publish the resolution in the gazette or a news paper of nation wide circulation.

The resolution is registered with the Bureau and a copy of the same sent to the official receiver. Any officer of the organization who does not comply with this requirement commits an offence and is liable on conviction to a fine not exceeding 30 currency points (600,000/=). Dissolution is deemed to have commenced on the date of passing the resolution.

Once dissolution has commenced, the organization is required to submit to the Bureau and the official receiver a statement of its affairs showing particulars of the assets, liabilities, names, residence and occupation of the creditors and the securities held by them.

The organization is then required to make a scheme of arrangement in accordance with its constitution; showing how the organization intends to deal with its assets and liabilities; and submit the  same to the official receiver and a copy to the Bureau.

The disposal of assets and liabilities is done under the supervision of the official receiver in accordance with the scheme. After the organization has met all the requirements of the law and the provisions of the scheme, members of the organization must finally apply to court for an order of dissolution.

Dissolution by court order is captured under s. 50 of the Act and it is only the High Court that has jurisdiction to handle matters of dissolution of NGOs in Uganda.

Any person or organization or the Bureau itself may apply to the High Court for an order for the dissolution of an NGO on several grounds namely;

  • Where the NGO is defrauding members of the public.
  • Where the NGO is threatening national security.
  • Where the NGO is in gross violation of the laws of Uganda.

Where a person alleges any of those ground the court is mandated to inquire into such allegations and where the allegations turn out to be true, the court is empowered to dissolve the organization.