Brief of NGO Registration in India
A non-profit organisation that operates independently is referred to as an NGO. NGOs in India can be registered as a Society, Trust, or Section 8 company, depending on the type of activity they want to do. A Non-Profit Organization (NPO) is a non-profit organisation that works for a social cause.
According to the popular definition of the status, NGOs are active in a wide range of activities only for the benefit of society as a whole. Environmental, social, advocacy, and human rights work are just a few of the tasks carried out by NGOs. NGOs seek to promote social or political change on a larger scale, as well as play a crucial role in society development, community improvement, and citizen involvement. There are three legal procedures to register a non-profit organisation: (1) Trusts, (2) Societies, and (3) Section 8 Company.
What are the advantages of registering an NGO in India?
The following are some of the advantages of registering as an NGO: -
Benefits from a tax exemption
Registering the firm as an NGO under the Companies Act, 2013 allows it to take advantage of many financial benefits, such as being exempt from a variety of taxes, which allows the company to save money on taxes and invest it in new projects.
Right to Acquire Assets
When your company is properly registered, it is able to buy land, own fixed assets, and/or take on liabilities under its common seal. It is illegal for an unregistered organisation to purchase, hold, or sell land in any state.
There is no requirement for a minimum share capital.
To operate autonomously, no minimum share capital is required. Donations to NGOs can be used to directly fund them. As a result, NGOs do not require a bigger share capital to operate freely.
Personal Liability Protection
You can purchase, acquire, and register assets and stakes in your NGO's name. This is a highly well-kept method of shielding yourself from endless obligation in the event of an unfavourable event like as foreclosure, bankruptcy, judgement debt, or divorce.
The Income Tax Act of 1961 NGOs registered under the Companies Act of 2013 are not limited in their ability to transfer ownership or claims to earned interests.
A legal Entity
Your company's transactions and interactions with the community will improve as a result of this. In addition, the NGO can sue to enforce its legal rights or be sued by its registered trustees.
Stamp Duty Exemption
Section 8 corporations that qualify as non-profit organisations are exempt from stamp duty under the Income Tax Act, allowing the company to save money on taxes. All of the taxes saved by avoiding stamp duty are subsequently used to promote the company's goals. It also aids in the protection of finances for the organisation, which aids in the easier operating of the company and increased production.
A well-organized financial plan
Having an NGO can provide you with a tax-free mechanism for the activities you carry out on behalf of the registered NGO. Non-profit organisations are excused from paying taxes because they are not for profit. You can create a well-structured financial plan that permits your company to operate without incurring any tax liabilities.
Your organization's registration may imply that it has effective and accountable leadership in place. When compared to an unregistered group, the public will regard it as more stable. Political parties, the government, donor agencies, financial institutions, charitable groups, and other non-governmental organisations (NGOs) will all wish to work with a recognised organisation to achieve common goals.
This indicates that an NGO has an indefinite lifespan and will continue to exist even if the founders or trustees die or quit the organisation. The organization's existence will come to an end only if it is formally wound up by an Indian court order. This, among other things, may allow for eternal succession.
By registering as a non-profit organisation, you can gain access to credit from lenders and financial organisations. A lending facility can be used to promote the organization's activities, fund a mortgage, or purchase land or fixed assets. Banks will need proof of registration as a condition of granting a loan.
The Preservation of Names
Once your organisation is registered, no one else in India can use the same or a similar name. This offers the added benefit of preventing illegal usage of your company's picture and name.
Opening a Bank Account
The fact that the NGO has opened a corporate account with a bank may indicate that it is transparent. Some private individuals, government agencies, donor agencies, and other NGOs will be hesitant to write you a check in your personal name on behalf of your organisation. A bank account for the NGO would be a proof of its legitimacy and ready to accept donations. To be able to create a bank account, you must show confirmation that your organisation is registered.
What is the Classification of NGOs in India?
NGOs are classified based on the following levels, which are as follows: -
- By the level of Orientation.
- By the level of Operation.
- Charitable Orientation
- Service Orientation
- Participatory Orientation
- Empowering Orientation.
- Community-Based Organization
- City Wide Organization
- National NGOs
- International NGOs.
By The Level Of Orientation
By The Level Of Operation
What are the different types of NGO registrations available in India?
Individuals in India are allowed to engage in social activities without the need to create a company or organisation. However, if a person wants to build a group with participants, activities, and resources, adequate management must be in place.
A series of rules must be followed in order to run NGOs in the form of (Companies, Trusts, and Societies) correctly. An applicant must follow the numerous laws in order to register in any of the ways listed below. There are three ways to register an NGO: -
- Trust Registration under “The Indian Trust Act, 1882”
- Society Registration under “Societies Registration Act, 1860”
- Section 8 Company Registrations under “The Companies Act, 2013”
What Documents Do I Need to Register an NGO?
The following documents are required before a registered deed can be delivered to an NGO:-
- The Trust Deed's main goal.
- Details on the Trustee and the Settlor (Self-attested copy Id and Address Proof along with the information related to occupation).
- Trust Deed with Correct Stamp Value
- Photographs of the settlor and the trustee.
- Trustee and settlor PAN Card
- Documentation for the Registered Address of the Trust. When it comes to rented property (NOC from the Landlord is required).
- The society's name.
- Proof of the working space should be addressed.
- All nine members' identities must be verified.
- 2 copies of the society's Memorandum of Association and By-laws
- A copy of your identity proof and a copy of your address proof (Including PAN Card).
- DIR-2 (Directors' Consent) and confirmation of identity and address
- Not more than two months' worth of utility bills
- Proof of address for the registered office
- If the registered office is not rented, no objection certificate is necessary.
- INC-14 -Declaration by Professionals affidavit regarding deposits
- INC-15-Promoters' Declaration (INC-14 and INC-15 shall be on the stamp paper, duly notarized).
- Annual Income Estimate
- Articles of Association and Memorandum of Association
- Details about the promoters and members of the planned company's board of directors.
Registration of Societies
The following documents are necessary for a society registration: -
Registration of Section 8 Company
What is the procedure for registering a non-profit organisation?
An applicant must follow numerous rules and procedures established in the respective act depending on the kind of NGO Registration (Trusts, Societies, and Section 8 businesses).
Procedures for Registering Non-Profit Organisations (As A Trust)
The steps for registering a trust are shown below –
Choose a Name that is Appropriate
The first step in registering a trust is to choose a suitable name for the trust. An applicant must keep in mind that the suggested name must not be on the Emblems and Names Act, 1950's restricted list of names.
Trust Deed Drafting
The Trust deed should be drafted for the purpose of Trust registration. A trust deed is a document that contains all of the necessary information for registration, and it must be presented to the Registrar at the time of registration.
Choosing the Trust's Settlers and Trustees
The next stage is to choose the Trust's settlor and Trustees. There is, however, no precise provision for the number of settlers/authors. In addition, a Trust must have a minimum of two trustees.
Preparing a Memorandum of Association
It is critical to draught a Memorandum of Association before registering a trust since it serves as the trust's charter.
Payment of the Required Fees
The following step is to pay the Trust registration cost.
Obtaining a Copy of the Trust Deed
After submitting the paperwork, an applicant can pick up a certified copy of the Trust Deed from the registrar's office within one week.
The Trust Deed Is Filed With The Registrar
Submit a certified copy of the Trust Deed to the local registrar after acquiring one. The trust deed must be supplied with copy that have been properly attested.
Obtain the Certificate of Registration
After submitting the Trust Deed to the registrar, the registrar preserves the photocopy and returns the original registered copy to the applicant within seven business days, together with the certificate.
The Registration of Non-Profit Organizations (Section 8 Company)
An applicant must complete the steps outlined below in order to register an NGO as a Section 8 Company:-
Step 1: Submit an application for DSC.
The first step is to submit an application for a Digital Signature Certificate. In electronic forms, DSC is utilised to affix the signature.
Step 2: Using SPICE+, make a name reservation.
The procedure for reserving a name for a Section 8 Company is similar to that of other businesses. To do so, go to ‘MCA Services' and click on the ‘SPICe+' Form. The SPICE+ form is used for the company's name reservation, which encompasses all procedures from name reservation through post-incorporation compliances.The Section 8 Company applicant must fill in the name he or she want to reserve for the Section 8 Company. As long as the name contains the following words:
- Chambers of commerce
- Discussion group,
- The Confederacy,
- Councils, commissions, and the like, and so forth.
STEP 3-: Filling up and submitting the SPICE+ Part A Form
For name reservation and incorporation reasons, the applicant must complete the SPICE+ Part A form. (The SPICE+ form also includes the DIN Application.)
Step 4-: Filing SPICE+ Part B
Following the submission of SPICE+ Part A, the next step is to download SPICE+ Part B in PDF format for incorporation purposes and to fill out the accompanying documents, which are as follows:
- INC-9 and URC-1) and for affixing the “DSC,”.
Step 5: Prepare the MOA and AOA
After submitting the SPICE+ form correctly, an applicant must submit the MOA and AOA forms Dashboard Link. In MOA and AOA, all of the details that are common in PART-B will be auto-filled. These are both web-based forms.An applicant must complete all of the details in the MOA/ AOA according to the requirements of Schedule I. Attach all subscribers' and professionals' Digital Signature Certificates to the site for the same.
Step 6: Entering Information in AGILE PRO
The next step is to complete the AGILE PRO form with all of your information. Similarly, to Part A, the common details in PART-B will be auto-filled in AGILE Pro. AGILE PRO comes with the following features:
- Optional GST
- EPFO/ESIC is a legal requirement.
- Bank Account- This form is used to open a bank account.
Step 7: Fill up the Required Information
The subscriber or first director's declaration is included in INC-9.
Step 8: Submitting Forms to the MCA
After filling out all of the required information in SPICE+ and AGILE PRO, the applicant must submit the documents to MCA. The documents can be sent after a successful submission, and the DSC can be affixed to the appropriate form.
Step 9: Conduct a pre-scrutiny check and pay the required fees
The next stage is to conduct a pre-scrutiny examination. The applicant must click the confirmation button after passing the Pre-scrutiny check. In addition, the applicant corporation must pay a charge for “Section 8 Company” registration.
Step 10: Obtaining a Certificate of Intent (COI) from the Registrar
If the Registrar considers the information and paperwork to be correct, he will provide the applicant business with a Certificate of Incorporation.
The Registration of Non-Profit Organizations (A Society)
To register an NGO as a Society, the founding members must first choose a distinctive name for the organisation and draught the Society's Memorandum.
Choosing a Society Name
unique and un-identical, as required by the Societies Act of 1860. Furthermore, the applicant's proposed name must not imply patronage of the Government of India or any State Government, or be subject to the restrictions of the Emblem and Names Act, 1950
Preparing a Society's Memorandum
An applicant must prepare the Memorandum of Society before registering the society. Each of the founding members must then sign the Memorandum of the Society, as well as the Rules and Regulations of the Society, which must be witnessed by-
- An oath commissioner is a person who administers the oath.
- Public Notary,
- A Gazetted Officer is a person who has been appointed to a position in
- Chartered Accountant or Certified Public Accountant
- 1st Class Magistrate with official stamp and complete address
Prepare the necessary documents
An applicant must prepare the documents listed below in order to register with the Society. The documents must be signed in their entirety.
- The name of the society
- Proof of the working space's address
- Identification of all 9 members
- Two copies of the group's Memorandum of Association and By-laws
The signed Memorandum and Rules and Regulations must be filed with the concerned Registrar of Societies in the State, together with the required fee.
Obtain Society Accreditation
When all of the paperwork is provided and the Registrar is pleased with the Society Registration application, he will certify that the Society is registered.
Notification on Non-Governmental Organizations (NGOs) dated 2021
The Ministry of Home Affairs has announced that the validity of registration certificates issued to Non-Profit Organizations under the Foreign Contribution (Regulation) Act, which were due to expire between September 29, 2020 and May 31, 2021, has been extended.The FCRA requires NGOs receiving foreign financing to register, and the ruling is expected to benefit a number of NGOs and other voluntary organisations whose registrations have expired since September 29, 2020. MHA further stated that it is necessary to administer the FCRA, namely section 12(6) of the act, which states that the certificate provided is valid for 5 years from the date of issue.
Biz AdvisorsProcedure for NGO Registration
Please follow the processes outlined above to incorporate an NGO Registration lawfully and securely, and reap the rewards in the form of higher-quality philanthropic operations. Our business professionals will be at your disposal to provide you with advice on NGO registration and compliance so that your NGO operations in India run smoothly. Professionals in the business world will help you plan smoothly and efficiently at the lowest possible cost, ensuring that the process is completed successfully.It is recommended that an attorney with "NGO experience" be hired to help navigate many of the potential pitfalls that lurk under NGO Registration and to fully comprehend the requirements. To begin the process, you will need to provide some basic information. Once all of the information is submitted and money is received, the Attorney will begin working on your request.
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Frequently Asked Questions
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