NGO is a non-governmental organization that is operated under the local level or national level or even international. The ones which are on international level are referred to as INGOs.
NGOs are usually nonprofitable and work for several causes- it could be for welfare of society, environmental cause, health cause, social upliftment, animal rights, human rights and so on.
Before you plan for an NGO registration process, you should know that it requires more than just the funds- Determination, hard work, strong network, desire for social service, willingness to work without profit.
The relevance of 12A and 80G Certificates for NGO’s
An NGO acquiring a 12A certificate is exempted to pay income tax for the entire lifetime on its surplus income. Also, an NGO must obtain an 80G certificate. This certificate allows donors to avail deduction under income tax.
In India, the NGO Registration process can be set up in three ways governed by the following laws
– Section 8 Company Registration governed by Companies Act
– Trust Registration governed by the Indian Trusts Act and
– Society Registration governed by Indian Societies Act
Section 8 Company Registration
Section 8 company is suitable for non-profit objectives and it may be a private limited or a public limited company. It is one of the most preferred methods when someone goes for an NGO registration process.
It is governed by the laws of companies act, 2013. According to section 8 (1a 1b 1c) of companies Act,2013, a section 8 registration company in India can be done for below purposes:
-promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object above objects subject to the condition that
It “intends to apply its profits, if any, or other income in promoting its objects” and “intends to prohibit the payment of any dividend to its members.”
Therefore any income that a section 8 company makes, it has to be used for the purpose of objects for which section 8 company was formed, but not for the profit of members.
Minimum Requirements for section 8 company registration:
- Pvt Ltd co. minimum shareholders 2, Public Ltd. Co. minimum shareholders 7
- Pvt Ltd co. minimum directors 2, Public Ltd. Co. minimum directors 3
- directors can be shareholders
Advantages of section 8 company
– No minimum paid up capital requirement
– No stamp duty to be paid on registration
– Several Tax Benefits are given for section 8 companies
– Section 8 companies have more credibility than other forms such as trust or society
– In section 8 company members can easily transfer their shares
Documents required for section 8 company registration
– ID Proof ( PAN Card) of all proposed directors
– Address Proof 1( Aadhaar/Voter ID/Passport/Driving License)
– Address Proof 2( Electricity Bill/Telephone Bill/Bank Statement)
– Photograph of all proposed directors
– Electricity Bill and Rent Agreement of premises
Other information of proposed Directors:
– Educational Qualification
– Experience with area of Operation
– Citizenship and Residential Status
– Place of Birth
– Permanent & Present Residential Status
– Contact Numbers and email ids
Trust Registration In India:
Another way of Ngo registration process is by way of Trust. Trust is a separate legal entity. A trust can be created by the execution of a trust deed; there are two types of trust, a public trust (charitable) which is created for the benefit of the general public whereas a private trust is created for the benefit of a particular group of individuals known as the beneficiary.
The founder of the Trust will initially contribute to the corpus of the trust list down the objectives for which it can be used and sets a goal of the Trust.
As per Section 6 of The Indian Trusts Act, 1882 a Trust is created when the Author of the Trust indicates with reasonable certainty by any words or acts the following:
An intention on his part to create a Trust
The purpose of the Trust
The Beneficiary
The Trust Property
And transfers the Trust Property to the Trustee.
Here are important terminologies in Trust
Author of the Trust : Person who reposes or declares the confidence
Trustee: Person who accepts the confidence
Beneficiary: Person for whose benefit the confidence is accepted
Trust Property: Subject-matter of the trust
Trust Deed: The instrument if any, by which the Trust is declared
Minimum Requirements
Number of trustees: Minimum 2 trustees
Advantages of Trust registration in India
– Charitable trust are trusted by public
– There are several tax benefits
– Grant from Government is easy
– 80G certificate benefit
– Expenditure made in trust is an investment
Documents required for Trust registration
– Trust Deed
– Self attested copy of the proof of identity of the author (Aadhaar card or passport or voter ID or driving license)
– Self attested copy of the proof of identity of each trustee (Aadhaar card or passport or voter ID or driving license)
– PAN card copy of all
– Proof of the registered office address of the Trust (electricity/water bill or registration – certificate/ rent agreement along with NOC)
Society Registration In India:
Society Registration Act was enacted under the British Rule in India but is still in force in India and a popular form of NGO today also. Societies are also the member-based nonprofit organizations that operate for charitable purposes. These organizations are almost always run under the authority of a governing body or a management committee. Societies are governed by laws of Societies Registration Act, 1860.
According to section 20 of Society Act, 1860, a society registration can be done for the following purposes:
– Promotion of fine arts
– Diffusion of political education
– Grant of charitable assistance
– Promotion of science and literature
– Creation of military orphan funds
– Maintenance or foundation of galleries or public museum
– Maintenance or foundation of reading rooms or libraries
– Promotion or diffusion or instruction of useful knowledge
Minimum Requirements
– Minimum of 7 or more than seven persons.
– Societies can be registered or unregistered. But only registered Societies can be legally protected and can take benefits of societies which are legally available.
Advantages of Society registration in India
– There are several tax benefits
– Grant from Government is easy
– 80G certificate benefit
Documents required for Society registration
– PAN Card Copy of all the members
– The Residence Proof of all the members (aadhar card or bank statement or passport or DL or utility bill)
– Memorandum of Association (which has objectives of the society for which it is being formed, registered address of society)
– Articles of Association (which has rules and regulation information of society)
– covering letter (signed by founding members of society)
– Address proof of registered office( utility bill, rent agreement along with NOC)
– List of all the members along with their signatures.
– A declaration by the president of the proposed society that he is willing and competent to hold the said post.
FAQ’s
What is niti aayog ngo registration?
Niti aayog registration’s objective is to bring about greater partnership between government & voluntary sector and foster better transparency, efficiency and accountability.
Niti ayog ngo registration is mandatory for ngos in order to receive beb=nefits/grants offered by ministries or Government bodies.
Who is eligible for niti aayog ngo registration ?
Trust, Societies, Section 8 companies are eligible for niti aayog registration ngo.
What is the best type of ngo registration?
Most popular form is section 8 company registration
How to do ngo registration online ?
To apply for ngo registration online, you can contact professionals such as CA, CS who knows the law and help you with ngo registration online. CA services online in India can help you with such things.
How long does ngo registration process takes in India?
NGO registration process depends on the type of structure you choose to form you ngo registration online.
What is ngo registration fees in India?
NGO registration fees depends on type of ngro registration you have selected, state in which you want to register. It is best to go for CA Services online and check with professionals and compare the cost of professional fees also along with the government fees.
What is the role of Ca Services Online in NGO registration?
Role of ca services online is to make ngo registration online process a fair and transparent and cost efficient
Is FDI possible in NGO?
Yes it depends on the type of NGO. Better to check with professionals through ca services online
Can NRI be a member or shareholder of an NGO?
Yes it depends on the type of NGO. Better to check with professionals through ca services online
How to get tax benefits in an NGO?
By taking registration such as niti ayog registration, apply for form 80G and 12
certificates.
