Dissolution of an NGO can either be voluntary (induced by the organization) and involuntary (revoking of an organization’s certificate by the Board).
Voluntary dissolution; upon application for registration, NGOs are required under the law to submit a prescribed form accompanied by an authenticated constitution by the subscribers of the organization. Every constitution must have a dissolution clause. Thus the manner in which an organization is voluntarily dissolved is laid out in its constitution. It is general practice however, for voluntary dissolution to be carried out by a resolution at the annual general meeting through a ¾ majority vote by the members of the organization. The members must be given written notice 30 days in advance specifying the proposal to dissolve.
Involuntary dissolution; may occur where an organization’s certificate is revoked by the NGO Board due to any of the following:
a) The organization fails to operate in accordance with its constitution;
b) The organization contravenes any of the conditions or directions inserted in its certificate or;
c) If in the opinion of the board it is in public interest to do so (Section 10 of the NGO Registration Act 1989).
In addition, Regulation 17 (3) of the NGO Registration Regulations 2009 provides that, an organization may also be dissolved by order of the Board if:
i) the Board has reason to believe that a registered organization has not commenced its activities within twelve months from the time of its registration;
ii) it is proved to be defrauding the public or its members or both;
iii) it has violated the terms and conditions attached to its permit;
iv) it has operated in contravention of the provisions of the Act;
v) for any other reason the Board considers necessary in the public interest.
Once the certificate of incorporation is revoked, the Board issues a notice of revocation in Form G as specified in the Schedule of the NGO Registration Regulations 2009 to the organization concerned (Regulations 11 and 17 (7) of the said Regulations). And before a decision is made by the Board to dissolve an organization, Regulation 17 (4) of the NGO Registration Regulations 2009 requires the Board to give a thirty days notice to the organization to appear before it and show cause why it should not be dissolved. Where an organization fails to satisfy the Board in its defence as to the need for its continued existence or fails to appear, the Board shall proceed to dissolve it.
The law requires that upon dissolution and or winding up of the organization’s activities, the debts and liabilities of the organization be settled first and the remaining property distributed to other organizations with similar aims and objectives. The law does not provide for the distribution of assets among members upon dissolution.