A Charitable trust is an entity created to hold and manage assets for the benefit of others. Trusts can be established under the Trustees (Perpetual Succession) Act (“Trustees Act”) only for religious, educational, literary, scientific, social, athletic, or charitable purposes (Trustees Act Chapter 164, Section 3(1)). Charitable purposes may also be affected by forming a trust by way of a trust deed.
A charitable foundation under Kenyan law can be established as either a company limited guarantee or a charitable trust.
In order to give the trust its own “corporate” identity and enable it make arrangements under seal in much the same way as a limited company, the trust is thereafter registered under the Trustees (Perpetual Succession) Act whereupon A Certificate of Registration for the trust is granted. This enables the trust to sue and be sued. In its own name (as opposed to those of the trustees) and is especially useful where the trust wants to hold interest in movable and immovable property (i.e. land) in its name rather than in the individual trustees’ names. In addition, by Registering an organization as a trust, it may be possible to apply for charitable status.
Eligibility for charitable status is obtained once the trust complies with the requirements of Kenya Revenue Authority.
A trust deed must be prepared. It contains the name of the trust, the objectives of the trust, the names in full and addresses of the trustees including powers of the trustees to change and appoint other trustees.
The trust document duly signed by trustees is submitted for stamp duty.
After registration under the registry of documents, a certified copy of trust deed and a petition for incorporation is lodged with the ministry of lands for incorporation of trust.