There are three types of NGOs widely registered in India.
Trust
Trust registration refers to the process of legally establishing a trust in India. A trust is a form of non-profit organisation (NPO) that is created to provide assistance and support to specific causes, such as education, health care, and community development. The trust registration process is governed by the Indian Trusts Act, 1882, and is typically handled by a team of legal experts and professionals.
Society
Society registration refers to the process of forming a society under the Societies Registration Act, 1860. A society is a group of individuals who come together to achieve a common goal or objective. Societies are formed to promote charitable, religious, educational, scientific, literary, or social causes.
Section 8 Company
Section 8 Company is a type of non-profit organisation that is registered under Section 8 of the Companies Act, 2013. It is registered with the sole purpose of promoting commerce, art, science, religion, charity or any other useful object, and not for the purpose of making a profit. This type of company is also known as a Non-Profit Organisation or Non-Governmental Organisation (NGO).
| Criteria | Trust | Society | Section 8 Company |
|---|---|---|---|
| Legal Framework | Indian Trust Act of 1882 | Societies Registration Act , 1860 | Companies Act, 2013 |
| Main Objective | Charitable activities | Public welfare activities | Promotion of science, arts, sports, etc. |
| Membership | Trustees | Members | Shareholders |
| Governing Body | Board of Trustees | Governing Council | Board of Directors |
| Governing Rules | Trust Deed | Memorandum and By-laws | Memorandum and Articles of Association |
| Registration | Registrar of Trusts in local jurisdiction | Registrar of Societies in the state | Registrar of Companies (ROC) |
| Tax Exemption | Section 12A and 80G of the Income Tax Act, 1961 | Section 12A and 80G of the Income Tax Act, 1961 | Section 8(1) and 12A of the Income Tax Act, 1961 |
There are various classification of NGOs in India, here is the list:
By the Level of Orientation
- Charitable Orientation
- Service Orientation
- Participatory Orientation
- Empowering Orientation.
By the Level of Operation
- Community-Based Organisation
- City Wide Organisation
- National NGOs
- International NGOs.
- The organisation gains credibility, and those who contribute money will be more likely to affiliate themselves with those NGOs that have registration because it lends an air of authenticity.
- A local NGOs operations may be able to develop with the aid of NGO company registration, which guarantees greater exposure for the organisation.
- The range of both financial and human resources is expanded. The NGO will benefit because more volunteers will step forward.
- Register your business as an NGO in India in accordance with the 2013 Companies Act to receive a number of benefits for the company’s directors. NGOs are exempt from a number of taxes in India, which enables the business to save taxes and invest the money in further projects.
- Companies that have been recognised by the ITR filing return act of 1961 as NGOs are not prohibited from selling their assets or interest-earning claims.
- All businesses organised as NGOs under the ITR Act of 2013 are exempt from stamp duty, providing the business with additional opportunities to reduce its tax burden. The entire tax savings from the stamp duty are then used to promote the company’s philosophy.
- A registered NGO gains the legal status and becomes accountable for the funds received. For instance, when an individual donates funds to a charitable trust, it is received under the name of the organization and used for the trust’s activities. In an unregistered firm, the assets can be received under anyone’s name and may be used for their own profit.
- An organization that is registered as an NGO reinforces the ethical, social and legal norms of our society.
- The basic requirement for running an NGO is to have a bank account under its name. In order to open an account, it is mandatory to be registered as a Trust, Society or Section 8 Company.
- The registration of an NGO is necessary to seek tax exemption from the Income Tax Authority.
Some of the advantages of NGO registration are discussed below:
Avails Tax Exemption:NGOs are exempt from a number of taxes, thus registering the company as an NGO under the Companies Act,2013 enables it to take advantage of these tax benefits and save money on taxes that it may then invest in more initiatives.
Ability to Purchase Assets:After obtaining legal registration, your company will be allowed to make real estate purchases, retain fixed assets, and/or incur liabilities. The legislation forbids unregistered organisations from buying, retaining, or selling land.
Minimum Share Capital Is not Required:To operate autonomously, no minimum share capital is required. Donations made to NGOs may be used to directly finance them. This shows that NGOs don’t necessarily need more funds to function freely.
Defence Against Personal Liability: You can acquire assets and stakes under your NGO’s name and register them. This is a really elegant method of protecting oneself from any consequences for unlucky occurrences like divorce, foreclosure, or bankruptcy.
Changing Ownership:It is not illegal for NGOs established under the Companies Act of 2013 to transfer their ownership or rights to interest accrued under the Income Tax Act of 1961.
Corporate Entity:Your company’s interactions and transactions with the community will improve as a corporate body. The NGO may also bring legal action to protect its interests or may be sued directly by registered trustees.
Exemption on Stamp Duty:Section 8 corporations are free from stamp duty under the Income Tax Act since they are non-profit organisations, which enables the company to employ further tax-saving techniques. The corporation then uses all of the taxes saved by avoiding stamp duty to further its objectives. It also helps to protect the business’s financial resources, which promotes productivity and allows for a more effective operation.
Structured Financial Plan:For actions you carry out on behalf of the registered NGO, an NGO may offer a tax-free framework. NGOs are considered non-profit organisations and are exempt from paying taxes. You may design a sound financial plan that enables the business to run tax-free.
Stability of Entity:Your organisation’s registration may indicate that it has capable and accountable leadership. Similar will be seen by the public as more stable than an unregistered organisation. Political parties, the government, donor organisations, financial institutions, charity groups, and other NGOs will want to work with a recognised entity to achieve common objectives.
Perpetual Succession:An NGO can therefore exist forever and carry on its work even when its founders or trustees pass away or resign. The organisation won’t cease to exist until a court ruling in India officially declares it to be closed. Along with other benefits, this might make permanent succession possible.
Admission to Credit:An NGO can obtain loans from lenders and financial institutions by registering. You can finance a mortgage, buy land or fixed assets with the help of a lending facility. Additionally, you can use it to advertise the company’s operations. Banks will want registration papers before approving a loan.
Name Preservation:No one in India may use the same name or a name that is confusingly similar to your organisation’s once it has been registered. The benefit of this is that it prevents unauthorised use of your company’s brand and reputation.
Opening Bank Account:The NGO may convey its transparency by opening a corporate account with a bank. Some individuals, the government, donor organisations, and other NGOs won’t feel comfortable signing a cheque in your personal name for your organisation. The existence of a bank account for the NGO would be evidence that it is a legal entity and is prepared to accept donations. To open an account with a bank, you must present evidence of your organisation’s registration.
Who is Eligible to Start an NGO?
- If an NGO is to be incorporated as a private limited company, there must be a minimum of two directors.
- In the case of incorporation as a public limited company, a minimum of three directors are necessary.
- 200 members is the maximum allowed for a private limited business.
- For a public limited company, there is no member limit.
- If registering as an NGO, there is no fee.
Obtain a Certificate for a Digital Signature (DSC)
The registration forms must be digitally signed before being submitted online, therefore proposed directors must offer digital signatures. India’s government certifies organisations that issue digital signature registration (DSC). Candidates must earn a DSC in either the Class 2 or Class 3 category. The cost to receive DSC varies and is determined by the certifying organisation.
Get a Director Identification Number by Applying (DIN)
Applications must include DIN requests for any potential company directors. The allocation of a DIN is aided by the completion of application Form DIR-3. The application form must be provided with scanned copies of director identification and address proof, self-attested copies of PAN, and other supporting documentation. Online submission of the application form is possible.
Here are the ngo registration forms required:
- DIR 12 Appointments of Directors
- DIR 2 Consent of Directors
- DIR 3 Application to ROC to get DIN
- INC 1 Business name approval
- INC 12 Applications for License
- INC 13 Memorandum of Association
- INC 14 Declaration from a practising CA
- INC 15 Declaration from each person making the application
- INC 16 License to incorporate as NGO
- INC 22 Situation of Registered Office
- INC 7 Applications for Company’s Incorporation
- INC 8 Declarations
- INC 9 Affidavit from each director and subscribe
Before a registered deed is delivered to an NGO, submission of specific documents is required.
Trust Registration
For the trust registration, the following papers are mandatory:
- A bill of electricity or water stating the address that needs to be registered.
- The identity proof of at least two members of the company. The proof can be:
- Voter ID
- Driving License
- Passport
- Aadhaar Card
Once the payment for the registration is done, it takes about 8 to 10 days for online registration to be completed under the Indian Trust Act – 1882. Before the deed becomes valid throughout the country, the settler has to deliver a presentation at the registrar’s office.
Note: On the scheduled date for registration, the Author of the Trust shall be present in the Register Office for registration
Society Registration
For a society registration, the following papers are essential:
- The name of the society.
- Address proof of the office.
- Identity proof of all the nine members which can be:
- Driving License
- Copy of Passport
- Voter ID
- Aadhaar card
- Two copies of the Memorandum of Association and By-laws of the society.
Note:Once the payment for the registration is done, it takes about 8 to 10 days for drafting the MoA and By-laws of the Society. Thereafter it takes 21 to 30 days for the Society to be registered.
Section 8 Company:
For a Section 8 company registration, the following papers are essential:
- The name of the Company for approval.
- Address proof of the office. It can be electricity or water bill or house tax receipt.
- Identity proof of all the Directors which can be:
- Driving License
- Copy of Passport
- Voter ID
- Aadhaar card The Memorandum of Association and Articles of Association of the Company.
Note:Once the payment for the registration is done, it takes about 8 to 10 days for drafting the MoA and AoA of the Society. Thereafter it takes about 2 months for the entire Company registration to be completed.
Step 1: Determine the Type of NGO: Choose the appropriate type of NGO structure, such as a trust, society, or section 8 company, based on the organization’s objectives and activities.
Step 2: Select a Unique Name: Select a distinctive name for the NGO that represents its mission and purpose and is not similar to any existing registered entities.
Step 3: Prepare the Memorandum of Association (MoA) and Articles of Association (AoA): Draft the MoA and AoA, which outline the objectives, rules, and regulations governing the NGO’s operations and management.
Step 4: Formulate the Governing Body: Establish a governing body or managing committee comprising individuals who will oversee the NGO’s functioning and decision-making processes.
Step 5: Provide a Registered Office Address: Designate a registered office address for the NGO, where official communications and legal documents can be sent.
Step 6: Prepare the Required Documentation: Gather the necessary documents, including identity proofs, address proofs, and photographs of the governing body members.
Step 7: File the Registration Application: Submit the registration application, along with the required documents, to the appropriate authority such as the Registrar of Societies, Registrar of Trusts, or Registrar of Companies, depending on the chosen NGO structure.
Step 8: Review and Approval: The registration authority will review the application and supporting documents. They may seek additional information or clarification, if necessary.
Step 9: Obtain the Registration Certificate: Upon successful review and approval, the registration authority will issue a registration certificate, confirming the legal status of the NGO.
Step 10: Apply for Tax Exemptions: After obtaining the registration certificate, apply for tax exemptions under the Income Tax Act by obtaining certifications such as 12A and 80G.
Step 11: Ensure Compliance and Reporting: Adhere to ongoing statutory requirements, including maintaining proper accounts, filing annual returns, and submitting audited financial statements.
In India, for NGO registration process anybody is free to do social activities without forming an association or organization. But when an individual wants to create a group that involves volunteers, activities, and resources, it becomes important to have proper management in place. To run such companies, trusts and Societies in the correct manner, a certain set of rules need to be followed.
There are several ways to raise funds for an NGO, including:
- This involves soliciting small donations from a large number of people through online platforms.
- NGOs can apply for grants from various sources like government agencies, private foundations, and international organizations that fund social causes.
- They can partner with companies that share their values to sponsor their programs and donate to their causes.
- Organizing fundraising events like charity walks, concerts, and auctions, or online campaigns like Giving Tuesday can help attract donors and raise funds.
- NGOs can appeal to individuals to donate to their cause through online donation portals or by directly approaching potential donors.
- NGOs can leverage social media platforms like Facebook, Instagram, Twitter, and LinkedIn to reach out to potential donors and create awareness about their cause.
The NGO registration fee varies based on the country and the specific registration process. It depends on factors such as the type of NGO, the location, and the requirements set by the governing bodies. The registration fee may range from a nominal amount to a substantial sum, depending on the type of NGO and the country’s laws and regulations. Additionally, there may be other expenses related to documentation, legal compliance, and other regulatory requirements that need to be taken into account.
- Step 1: The first step is to choose the type of NGO that best suits the goal and activities of the organisation
- Step 2: Once the type of NGO has been selected, choose a unique name for the organisation
- Step 3: The Memorandum of Association (MOA) and Articles of Association (AOA) Should be drafted
- Step 4: The MOA and AOA documents must be notarized by a notary public
- Step 5: Once the documents have been notarized, the NGO can be registered with the appropriate authority. The registration process may vary depending on the type of NGO
- Step 6: After registration, the NGO should apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN)
- Step 7: Once the PAN and TAN have been obtained, the NGO can open a bank account in the name of the organisation
- Step 8: To obtain tax exemptions, the NGO should apply for registration under Section 12A and 80G of the Income Tax Act
- Step 9: If the NGO plans to receive foreign funds, it must apply for registration under the Foreign Contribution (Regulation) Act (FCRA).
- The process of section 8 company is 10-14 days
- There is a process of trust incorporation that will take 20 days
- The society registration process will take another 25 days.
Consultation for selecting registration type
- We do a thorough consultation to understand which registration would suit you the best- NGO / Society/ Trust registration.
- We will inform you of all the documents required to check ngo registration online form.
- The final step is the formation of your NGO.
Voluntary organisations, also known as nonprofits or non-governmental organisations (NGOs), can be funded through a variety of sources, depending on their mission, scope, and activities. Here are some common ways voluntary organisations are funded:
1. Donations from Individuals: Many voluntary organisations rely on donations from individual supporters. These can be one-time donations or recurring contributions. Individuals who believe in the organisation’s cause may contribute financially to support its work.
2. Grants: Voluntary organisations often apply for grants from foundations, government agencies, and other funding bodies. Grants can provide significant financial support for specific projects or operational expenses. Organisations typically need to submit detailed proposals outlining their plans and how the funds will be used.
3. Corporate Partnerships: Some businesses and corporations align themselves with nonprofit organisations by providing financial support or in-kind donations. This can include sponsorships, cause-related marketing campaigns, or donations of goods and services.
4. Events and Fundraisers: Voluntary organisations frequently organise events and fundraising campaigns to generate funds. These can include charity galas, benefit concerts, charity runs, auctions, and more. These events not only raise money but also engage the community and raise awareness about the organisation’s mission.
5. Membership Fees: Certain voluntary organisations have membership structures where individuals or groups pay an annual fee to become members. In return, members might receive benefits such as access to exclusive content, events, or services.
6. Earned Income: Some voluntary organisations generate income through the sale of goods or services related to their mission. For instance, a conservation organisation might sell eco-friendly products, or an art nonprofit might offer workshops or classes.
7. Crowdfunding: Online crowdfunding platforms have become popular for nonprofits to raise funds from a large number of individuals, often through small contributions. Platforms like Kickstarter, GoFundMe, and Indiegogo can help organisations reach a wider audience and gather support for specific projects.
8. Endowments and Trusts: Voluntary organisations may establish endowment funds or trusts that generate investment income over time. This provides a stable source of funding for the organisation’s activities and allows for long-term planning.
9. Government Funding: Some voluntary organisations receive funding from local, regional, or national government agencies for specific projects or services that align with government priorities.
10. International Aid and Foundations: Voluntary organisations working on global issues or in developing countries may receive funding from international aid agencies, intergovernmental organisations, and international foundations.
11. Partnerships and Collaborations: Voluntary organisations may collaborate with other nonprofits, government agencies, and private sector entities on joint projects or initiatives. These partnerships can bring additional funding and resources to support shared goals.
1. Register on the NGO Darpan Portal: If your NGO is not already registered on the NGO Darpan portal, you need to create an account by visiting the official website of NGO Darpan
2. Login to Your Account: Once registered, log in to your NGO Darpan account using your credentials.
3. Access the Certificate: Depending on the specific certificate you are looking to download (e.g., registration certificate, profile certificate, etc.), navigate to the relevant section or dashboard within the NGO Darpan portal.
4. Download the Certificate: Locate the option to download or generate the certificate. This might involve clicking on a link or button associated with the certificate you need. Follow any on-screen instructions.
5. Verify and Use the Certificate: After downloading the certificate, make sure to verify the accuracy of the information it contains. You can use the certificate for various purposes as required, such as submitting it for grant applications, partnerships, or other interactions with government agencies or stakeholders.