NGO is a non-governmental organization that is a non-profit organization perceived to be a body of individuals or an association of persons. It is an organised community or society in order to serve a social or political aspect or problem. They operate outside the government control and is generally run by volunteers and enthusiastic individuals.
The term "Non-governmental Organization(NGO) Registration in India" means the process by which the volunteer union or group of persons decides to start a charity or not-for-profit organization.
It should also be noted that the NGO cannot pay its members and individuals dividends and benefits. In addition, it is necessary that various volunteers, government agencies, and legal advisors provide skills, resources, understanding, and guidance in starting an NGO in India. The following can be termed as an NGO:
- Provides basic social amenities; and
- Relieves the suffering of the weaker section;
- Promotes the interest of the poor people;
- Undertake communal development;
But, it shall note that an NGO can be either semi, voluntary or non-voluntary a non-governmental, quasi in nature. The basic agendas of a non-profit organization are as follows:
- Facilitation of Rehabilitation Support for Disables.
- Support to Widows;
- Support to Elderly People, etc.;
- Women Empowerment;
- Upliftment of Childrens Education;
- Eradication of Social Ills
- Sustainable Development;
Benefits of NGO Registration in India
- No Minimum Capital Requirements
- Ease in Transfer of Ownership
- Long-Run Organisation
- International and National Collaborations
- Exemption from Government Taxes
- Separate Legal Entity
- Government Funding
- Aims Common Cause
TYPES OF NGO IN INDIA
There are generally 3 types of NGO that gets registered under laws regulating NGO Registration in India under different acts namely are as follows:
- Indian Trust Act 1882 for Trust Registration.
- Society Registration Act 1860  for Society Registration.
- Companies Act 2013 for Section 8 Company.
A. AS A CHARITABLE TRUST- :
A charitable trust is a potential form of not-for-profit entity in India. There are generally two types of charitable trusts that exits in India namely public and private charitable trust. Normally, public charitable trusts are established for a number of purposes, including the relief of poverty, education, medical relief, provision of facilities for recreation, and any other object of general public problems.
Indian public trusts are usually irrevocable wherein no national law governs public charitable trusts in India, although there are many states like Maharashtra, Rajasthan, Gujarat and Madhya Pradesh having their own Public Trusts Acts.
A Trust can be created by any person who is qualified by law and competent to contract or even by a manner with the authority of a competent court and in respect of any property which can be transferred and over which the author of the trust has dispossessing power.
Where the purpose of the trust is to benefit an identified individual or a group of individuals or his or their descendants for any legal person and the same is capable of holding property, is termed as a private trust. While on the other hand, wherein the purpose of the trust is to benefit the public or any section of the public which are unidentified, is a public trust.
A trustee is defined as any person who is an individual or a corporate body or a corporate sole is capable of holding property and is competent to contract and must accept the provisions of the trust.
In addition, the founder has the power to decide the trust's mission and vision. Furthermore, it is considered that the company's mission and vision should relate to the following objectives:
- health reliefs
- poverty eradication.
- Education etc.;
Parties Involved in the Trust Registration:
Trust Registration Process required the following parties
at least 2 people are required to start an NGO as a trust.
Advantage of Trust Registration
- To Involve In Charitable Activities
- Managing Assets
- Preservation Of Family Wealth
- Forced Heirship
- Registered Trust Avails Tax Exemptions
- Avoid Probate Court
- Immigration/Emigration Of Family
- Provides Benefits To Poor People
- Compliance With Law
- Tax Mitigation
Documents required for Trust Registration:
- Below details of the Trustees, like: Name; Residential Address; Name of the Father; Age; Contact Number; Occupation; Email Address; and 2 updated Passport size Photos.
- Copy of Utility Bill i.e Electricity Bill/Water Bill which is conforming the address that would get registered.
- Copy of Voter ID proof.
- Copy of Aadhaar Card No of the Members.
- Copy of Driving License;
- Scan copy of Passport;
- In addition to that, the Trust deed contains the following information:-
- Total number of trustees.
- The Registered Address of the trust.
- Presence of settlor and two witnesses at the time of registration of Trust.
- Proposed name of the trust.
- Rules & regulations to be strictly followed by the Trust.
B AS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 -:
Societies are a type of membership organizations, which may be registered for charitable purposes. They are generally managed by a governing council or a managing committee formed with enthusiastic individuals. Societies are required to be registered under and governed by the Societies Registration Act 1860.
Documents required Society Registration
- Proposed Name of the Society;
- 2 copies of the Memorandum of Association;
- 2 copies of the By-Laws;
- Copy of Address Proof of the Office;
- Copy of Residential Proof of all members;
- Signed Affidavits of Office Bearers;
- Copy of Aadhaar Card No for all Members;
- Copy of Voter ID of all Members;
- Copy of Driving License of all Members
- Passport copy
- A Letter of Request for the Registration of society under Societies Registration Act 1860.
C. AS A COMPANY LICENSED UNDER SECTION 8 OF THE COMPANIES ACT - :
A section 8 company generally known as Not For Profit Organisation is a company with limited liability that is formed with the objective of promoting commerce, science, art, religion, charity or any other useful object and any other income derived through promoting the company's objects may be distributed in any form to its members. The Indian Companies Act, 2013, also permits certain companies to obtain not-for-profit status as "section 8 companies,” along with the governance of profit-making companies.
Eligibility & Objective to Apply section 8 Company.
If an individual or an association of individuals holds the intentions or objectives listed below, it is eligible to be registered as a Section 8 company. To the satisfaction of the Central Govt, the objectives must be confirmed.
Objectives of a non-profit company generally include promotion of commerce, art, science, religion, charity or any other useful object. Profits earned from the above objects be applied only for promoting such objects of the company and no dividend is paid to its members Where the company is committed to promoting science, trade, training, art, sports, research, religion, love, social welfare, environmental protection or other purposes;
Where the Company intends to invest only in promoting such objects all profit (if any) or any other revenue generated after incorporation;
If it has no intention of paying its members any dividends.
As a provision under the Companies Act, 2013 a section 8 company must apply its profits if any, or other income to the promotion of its objects, and may not pay a dividend to its members. At least three members are required to form a section 8 company and the founders or promoters of such company must submit application materials to the Regional Director of the Company Law Board also known as the Registrar of Companies. The application must include copies of the memorandum and articles of association of the proposed company along with the number of other documents, including a statement of assets and a brief description of the objects of the company.
Advantages of Section 8 Company
- Credibility trustworthy.
- Distinct Legal Identity:
- Exemption 80G to the donors:
- a registered partnership firm can become a member
- NO Name suffix “Public Limited or Private Limited”, It can be registered with names such as “Association, Society, Academy, Institute, Organisation, Council, Club, Charities, Foundation, and Federation”.
- Zero Stamp Duty:
- No Minimum Capital Requirement:
- NO CARO Requirements
- Tax Benefits
Registration as a Section 8 Company:
Basic documents needed for the Section 8 Company Registration are as below:
- Approval for the proposed name of the Company.
- Copy Registered Office Address.
- Copy of Utility Bill i.e Water bill/Electricity bill/House Tax Receipt.
- Copy of Voter ID card of all Directors.
- Copy of Driving License of all Directors.
- Copy of Aadhaar Card No for all Directors.
- Scan copy of Passport for all Directors.
- MOA and AOA of the Company.
STEP BY STEP PROCESS FOR ESTABLISHMENT OF SECTION 8 COMPANY
There are 3 main steps in the formation of a Section 8 company apart from the document collection drafting, & preparation. They are mention below:
STEP 1: Run Approval:
- APPLICATION FOR APPLYING FOR NAME RESERVATION -: Reserve Unique Name (RUN) is a form filed for reserving a name for a new company or for changing its existing name. The board of directors needs to apply to the registrar for name reservation and see if the proposed name of the organization is already in use or not since two organizations cannot have the same or identical names. They need to check with the local government registry or similar agency/board to see if your proposed name is already taken. Because of this restriction on choosing the appropriate name the company is required to provide two or three optional names for the NGO. The same provision also applies to the logo of the NGO, if they plan to use one.
- A section 8 company shall usually have words like Foundation, Federation, Society, Council, Club, Charities, Institute, Academy, Organisation, Federation, Chamber of Commerce, Development, Association, etc.
- The name so approved shall be valid for 20 days
STEP 2: RD 1 License:
- This step is important in the process of incorporation of Section 8 company.
- The name approval (Reserve Unique Name (RUN) ) shall be valid at the time of applying for the RD 1 License.
- RD 1 license is a license granted under section 8 of companies act as they work on a specific objective which is for the upliftment of arts, science, commerce, environment, etc., and the profit they earn shall also be used towards their objectives. All crucial documents like the MoA, AoA, financial statements, and other declarations are filed at this stage.
- The RD 1 license so approved shall be valid for thirty days.
STEP 3: Submission of Spice Form:
- Both the name and the license shall be valid at the time of filing the SPICe form.
- This is this last stage of incorporating the section 8 company where the documents relating to the registered office like the rental agreements and utility bills are filed along with the RD-1 license and the name approval certificate.
- PREPARATION OF MEMORANDUM AND ARTICLES OF ASSOCIATION -: The company after reserving their name needs to draft MOA AND AOA which outlines the main object of their existence. MOA is termed as the character certificate of the organization while the AOA is for governing the day-to-day activities.
- There are several documents that need to be submitted to the registrar. It includes information on the NGO Board, its mission statement, purpose, programs and projects information, staff members, funding sources, etc. which are necessary to be submitted for any type of organisation.
- It is very critical that a new NGO ensures that it is properly registered with the public authorities of the country because complying with the rules and regulations are must for such type of companies.
NGO REGISTRATION IN DELHI
While it is critical that a new NGO ensures that it is properly registered with the public authorities of the country, it is of even more importance to 'register' with its target community - in terms of ensuring acceptability, building trust, chalking out effective programs and projects and being the harbingers of real and measurable change.
Briefly speaking, the primary reason behind the registration of NGOs in India is to enhance economic and social growth in the country's needy, poor sector. But it is a troublesome and tiring task to record an NGO in India. However, our experts at India Expert Advisors meet all your requirements for the registration process and make things easy and easy for you. Moreover, the certificates for Section 12A and 80G will be provided by our professionals.
What India Expert Offers
India Expert assists in Societies and trusts' registration of non-governmental organisations, and in establishing association memoranda (MOA). They are guided by modes and methods, procedural, and documentation processes. We also advise you on the necessary registration benchmark. Rajput Jain & partners provide services for all facets of NGOs, from registration to fund use, etc. In addition, we offer income tax solutions, statutory and internal audit solutions, and offer so many services.
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