What are the pros and cons of operating as an NPO?
Advantages:
- Founding documents are available for public scrutiny
- A NPO is publicly accountable. This creates trust so stakeholders will be more willing to work to grant loans or donate money
- The liability of the organisation’s members and office-bearers is limited
- The organisation has perpetual succession: it continues to exist even if its members and office-bearers change
Disadvantages:
- You will need professional assistance to set up a company
- The annual reporting requirements for companies are complex and extensive no particular reason for Non -Profit Companies to register in terms of the NPO Act.
- In the future, if an NPO wishes to be eligible for government benefits (such as tax benefits) they may need to register.
Benefits:
Your organisation can access funding from National Lotteries Trust, NDA and other agencies and you can also apply for tax exemption status with SARS.