The Federal Government through the Financial Reporting Council of Nigeria has given religious and other not-for-profit organisations until January 1, 2014, to start reporting their profit-making subsidiaries as business entities in line with a new financial reporting regime, or risk penalties.
Also, under another financial regime, whose deadline has not been fixed, the FRC will refuse to give certificate of registration to companies’ whose chairmen, managing directors and chief finance officers are not registered with it.
The Executive Secretary/Chief Executive Officer, FRC, Mr. Jim Obazee, who made the disclosure at a news conference in Lagos on Thursday, said a number of entities operating on commercial lines within charity were claiming exemption on their income on the ground that the totality of the outfits was charitable institutions.
Obazee said such entities had argued that they were engaged in the advancement of an object of general public utility and classified as ‘company limited by guarantee’ as provided by Section 26 of the Companies and Allied Matters Act LFN, 2004.
According to the FRC boss, when such a claim is made in respect of an activity carried out on commercial lines, it is contrary to the intention of the provision, and as such, put the assets of the charitable purpose at “significant risk.”
Read more at Punchng.com.