Non-Profit Company (NPC)

A Non-Profit Company (NPC) is a registered business that exists to serve a public benefit, community cause, or social purpose.

Unlike other companies, it’s not set up to make a profit for its owners or shareholders.

NPCs are often used by…

  • Charities and NGOs
  • Religious organisations
  • Schools and education initiatives
  • Environmental or welfare groups
  • Community upliftment projects

An NPC is still a registered company BUT its purpose is impact, not profit.

"Can a Non-Profit Company make money?"

Yes.

But any money made must go back into the organisation’s mission.

NPCs can:

  • Charge for services
  • Sell products
  • Receive donations and grants

…but they can’t distribute profits to individuals.

No dividends, no share payouts, only reinvestment into the cause.

"What are the rules for a Non-Profit Company?"

An NPC…

  1. Must have at least three directors
  2. Can’t issue shares (there are no shareholders)
  3. Must use its income to support its stated objectives
  4. Needs a Memorandum of Incorporation (MOI) that outlines its purpose and restrictions

It’s also expected to be transparent and properly governed especially if it receives public or donor funding.

"Can directors of an NPC be paid?"

Yes.

Directors and employees of an NPC can earn a salary for their work, they just can’t benefit from profit distributions.

The organisation must be run responsibly and in line with its non-profit purpose.

"Can a Non-Profit Company register with SARS?"

Yes and it’s required.

NPCs must:

  1. Register for income tax
  2. Submit annual tax returns (even if they owe nothing)
  3. Apply for tax exemptions or Section 18A status (if eligible)

Govchain can help with all of this after your company is registered.

"Can an NPC accept donations?"

Yes — and many even rely on them.

If your NPC is approved by SARS for Section 18A status, donors may even receive tax certificates for their contributions.

You can also apply to be listed as an NPO (Non-Profit Organisation) with the Department of Social Development, which is separate from your CIPC registration as an NPC.

"How is an NPC different from a charity or trust?"

  1. A charity is a general term.
  2. A trust is a different legal structure.
  3. An NPC is a registered company, so it has formal legal standing, can open bank accounts, enter contracts, and operate professionally.
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