Abstract:
In the contemporary world, non-profit organizations are an important pillar of society. They are often considered as the third sector, voluntary or non-profit sector. Their primary objective is to render social and economic services in domains where they are not provided by the government and the market. Thus, they play a remarkable role in society by attempting to satisfy human needs in different way or as a supplement to profitable firms and governmental activity. Under the existing Ethiopian laws, traders and business organizations are legal persons set up for the purpose of making profit. Associations, on the other hand, are organizations formed to operate mainly non-profit making activities. These organizations usually require a lot of money for their running and also for the work they do in the society. This resource is usually found in the form of donations by different individuals, local and international organizations and local governments through tax advantages and exemptions. The issue of funding is considered an inherent problem of associations destined to happen at one point or another in their life. With the objective of funding their activities, non profit organizations can engage in income generating activities. But unlike business organizations, they are not allowed to do business without limitations. The principal legislations that currently govern the issue; the the OCS proclamation No. 1113/2019 and its implementing Directive No. 937/2022 permit NPOs to engage in income generating activities under some conditions.Pursuant to these legislations NPOs have the right to engage in any lawful business and investment activity in accordance with the relevant trade and investment laws to raise funds for the fulfillment of its objectives. Hence, this study has critically analayzed the legal regulation of carrying on a business by NPOs. By doing so the thesis will contribute to the field by elaborating on and make suggestions that may better the Ethiopian Non-profit law and increase the contribution of the non-profit sector to the local economy
