NGO registration in India can be done under any of the following structures:
Trust: A trust is suitable for charitable organisations which are started by individuals persons or families. A trust runs through a corpus fund, which is established by an initial donation from the founding individual or family and then sustained through external donations.
Society: Societies can be formed for charitable as well as recreational purposes. It is usually formed by a collective of like minded people with a common goal or vision that is not commercial in nature.
Company: This structure is usually suitable for NGOs that do not only collect charitable donations but also engage in commercial activity to raise funds for their charitable and social pursuits.
NGO Registration Process
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NGO Registration Online - Overview
An NGO is a non-governmental organisation that works to improve society at large through philanthropic endeavours. Depending on the activity you want to pursue, you can start it as a Trust, a Society, or a Non-Profit Company [Section 8 Company].
All non-profit organisations, including Trust, Societies, and Section 8 Companies, are collectively referred to as NGOs in India. Such non-profit organisations are also known as 'Sangathan', 'Sangh', and 'Sangam.' All non-profit NGOs are eligible for an income tax exemption.
These are occasionally mistaken with non-profitable businesses, which denotes a conventional company that is not turning a profit. Vakilsearch will assist you in making the best decision and will walk you through the full NGO company registration procedure.
What are the Types of NGO Registration in India?
There are three types of NGOs widely registered in India.
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 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).
Difference Between - Trust, Society & Section 8 Company
|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.|
|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|
What Is the Classification of NGOs in India?
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.
Why Is NGO Registration Required?
- 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.
Benefits of NGO Registration
- 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.
Eligibility 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.
Things to Do Before Applying for NGO Registration Online
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.
Online NGO Registration Forms
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
Documents Required for NGO Registration
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.
Process of NGO Registration in India
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.
NGO Registration Procedure
- 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).
How Long Does It Take to Register an NGO?
- 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.
FAQs on NGO Registration
Depending on the type of work you want to do, it is best to apply accordingly. For the best solution, contact one of our experts at Cadeskindia for a better understanding as to which registration method suits your NGO the best.
The answer to this question is yes. Government employees or officers can be part of NGOs provided the NGO is not anti-government. There are a few rules too that these people have to follow, one of them is to make sure that the NGO is not profit making.
Besides having the willingness to work for the welfare of society, legally, there are some procedures to follow, these are:-
- First, lay down the mission of your NGO, this means what cause you would like to take up.
- Form a governing body, this body ensure the smooth running of the NGO.
- Finally, register your NGO with the government authorities. This step can be long and painful. But, for a seamless experience, you can contact Cadeskindia.
Our experts will help you at every stage of the registration process.
Get to know about the steps involved in starting an NGO.
Here's how you can set up an NGO in India.
Why CA Desk India?
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 checkNGO registration online form.
- The final step is the formation of your NGO.