NGO Stands for Non-Governmental Organization, is an organization that works for charitable, non-profit and for social welfare purposes.
NGOs can be registered in India under the following laws:
Trust under the Indian Trust Act, 1882.
Society under Societies Registration Act, 1860.
Section-8 Company under Companies Act, 2013.
Matters of welfares had long been the domain of state players, with little room for private entities to take the helm. However, recently, there has been a rapid increase in the involvement of Non-Governmental Organizations (hereinafter “NGOs”) in a playroom that till now represented sovereign interests. In India, these private entities generally exist in one of the following three legal forms – that of trusts, of societies, or in the form of Companies incorporated under Section 8 of the Companies Act, 2013. NGOs are champions of causes, whether social or economic.
NGOs are usually expected to function without profit (notably, Section 8 companies have prohibitions from paying out dividends, and are expected to reinvest profits back into the promotion of the objects). However, NGOs are generally offered various exemptions when it comes to taxation as an NGO basically represents an active civil society member.
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How can Register NGO in India?
Broadly, NGOs in India function as either:
Trust Registration – since trusts are irrevocable and cannot be changed or terminated without the beneficiary’s permission, such form of organization is preferred by NGOs with extremely limited membership, or by permanent institutions such as orphanages/old age homes. While no Central Act governs trusts, certain States do regulate Public Trusts and by extension, NGOs.
Society Registration – societies are member-based organizations, operating under self-decided rules for governance by a committee elected by the members. Societies are registered under the Societies Registration Act, 1860.
Section 8 Company Registration – Section 8 Companies are limited liability companies that are formed for the promotion of public purposes and for the general benefit of society. Regulated by the Companies Act, 2013, this is a preferred mode of organization that inspires confidence in both the government and donors.
NGO Registration Process
For Trusts:
In India, any person
who is not a minor, and is not disqualified otherwise from contracting.
has the power to transfer some transferable property.
may form a trust. Trusts need to be registered under the Indian Trust Act of 1882. The procedure for establishing a trust is:-
Pre-Requisites:
Decide upon a name for the trust.
Provide the registered address from where the trust shall operate.
Decide upon the objects for which the Trust shall function.
Trust deed as a memorandum must be prepared.
Assign one settler of the trust.
Assign at least two trustees of the trust.
Decide on the property (immovable/movable) which shall function as the property of the trust.
Formation of trust deed:
Trust deed must be made on stamp paper of appropriate value.
Include photographs & identity proofs of the settler, at least two trustees and two witnesses.
Each page of the Trust deed must be signed by the Settler.
Registration of trust deed (under Indian Trust Act, 1882):
Submit trust deed with Xerox copies of the same signed by the settler on each page to the Local Registrar of the State where the Trust will operate;
Trust deed should be submitted by the Settler and the Witnesses, who should have their original identity proof with them for verification by the Registrar.
After processing, the Registered Deed is returned, while the Xerox copy is retained for record purposes.
For Societies:
Two elements are required for the successful registration of society in India:-
Memorandum of Association – includes several clauses such as:
the decided name of the society.
address of its registered office.
Objects for its formation.
Details of the general body.
Rules & Regulations of the Society – address the governance of the society, specifically, rules relating to:
Membership.
Meetings.
Appointment of Governing Committee.
The procedure with regard to legal matters.
Reasons for dissolution, etc.
Once these two elements have been formed by the prospective society, the Rules & Regulations must be signed and certified by three office bearers of the society.It is important to note that the Object Clause in the MoA is the clincher when it comes to the successful registration of a Society. Thus, hire our experts to make your job easier and ensure that there are no problems in either of these elements when the registrar scrutinizes your society before approval.
For Section 8 Company
Name approval of the Company.
Prepare MOA and AOA.
A requirement of Min 2 Director and Shareholder.
File Form SPICE with ROC.
A Company can be registered as Section 8 Company if it:
a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any such other object.
(b) intends to apply its profits, if any, or other income in promoting its objects.
(c) intends to prohibit the payment of any dividend to its members.
The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.
Differences between a Society, Trust, and Section 8 Company
