Overview of NGO Registration
NGO registration is a profit that enables nonprofit organizations to offer services to the public, often with the assistance of the government, corporations, individuals, or groups. As a nongovernmental organization serving the majority, NGOs must adhere to policy.
An NGO is a non-governmental organization that engages in philanthropic activities to improve society. For the activity you wish to pursue, start-up options include a trust, society, or non-profit company.
In India, all non-profit organizations, including trusts, societies, and Section 8 companies, are collectively referred to as NGOs. People also refer to these non-profit organizations as ‘Sangathan’, ‘Sangh’, and ‘Sangam.’ Income tax exemptions are available to all non-profit NGOs.
Sometimes, people mistake these for non-profitable enterprises, a sign of a conventional company that lacks profitability. The legal dost will guide you through the entire NGO company registration process and assist you in making the most informed decision.
Types of NGOs
In India, there are three widely registered NGOs.
Section 8 Company
Section 8 of the Companies Act, 2013 governs the registration of a company, a type of non-profit organization. The sole objective of its registration is to advance commerce, art, science, religion, charity, or any other beneficial object, rather than to generate revenue. People also refer to this type of organization as a non-governmental organization (NGO) or non-profit organization.
Trust
In India, the process of legally establishing a trust is known as trust registration. A trust is a type of non-profit organization (NPO) committed to advancing specific causes like education, health care, and community development. The Indian Trusts Act, of 1882, regulates the trust registration process, generally managed by a team of legal experts and professionals.
Society
The Societies Registration Act of 1860 governs the process of establishing a society. This procedure is known as society registration. A society is a collection of individuals who unite to accomplish a shared objective or purpose. Individuals establish societies to promote religious, charitable, educational, scientific, or social causes.
Why is NGO Registration Required?
- The operations of local NGOs may be able to develop with the aid of NGO company registration, which ensures greater exposure for the organization.
- Individuals who contribute funds are more likely to associate themselves with registered NGOs, enhancing the organization’s credibility and establishing an aura of authenticity.
- The expansion of both financial and human resources is important. The NGO will benefit from an increase in the number of volunteers.
- The ITR Filing Return Act of 1961 does not restrict companies recognized as NGOs from selling their assets or interest-earning claims.
- Register your business as an NGO in India by the 2013 Companies Act to receive a variety of benefits for the company’s directors. In India, NGOs are exempt from a variety of taxes, which enables businesses to save money and allocate it to future projects.
- The ITR Act of 2013 exempts all businesses organized as NGOs from stamp duty, thereby providing businesses with additional opportunities to reduce their tax burden. The company then allocates the entire tax savings from registration duty to promote its philosophy.
Benefits of NGO Registration
- To receive a tax exemption from the Income Tax Authority, an NGO must register.
- An NGO-registered organization upholds our society’s moral, social, and legal standards.
- Legal status grants a registered non-governmental organization (NGO) responsibility for the funds it receives. For example, when an individual contributes funds to a charitable trust, the organization receives the funds and allocates them to its operations. Anyone can steal an unregistered company’s assets and profits.
- A bank account in the organization’s name is a fundamental requirement for an NGO’s operation. To establish an account, it is necessary to register as a trust, society, or Section 8 company.
Who is Eligible to Start an NGO?
- A minimum of three directors is required for incorporation as a public limited company.
- To establish an NGO as a private limited company, a minimum of two directors is necessary.
- A private limited company has a maximum of 200 members.
- There is no member limit for a public limited company.
- There is no fee if you register as an NGO.
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Steps to Take Before Submitting an Online NGO Registration Application
- Obtain a Certificate for a DCS (Digital Signature)
Proposed directors are required to submit digital signatures before submitting the registration documents online. The Indian government certifies organizations that issue digital signature registration (DSC). Candidates are required to obtain a DSC in either Class 2 or Class 3 category. The certifying organization determines the cost of obtaining a DSC. - Apply for a Director Identification Number (DIN).
DIN requests must be included in all potential company directors’ applications. Completing the application Form DIR-3 facilitates the allocation of a DIN. Scanned copies of the director’s identification and address evidence, self-attested copies of the PAN, and any other necessary supporting documentation must accompany the application form. You can submit the application form online.
Online NGO Registration Forms
Here are the necessary NGO registration forms:
- DIR 12: Appointments of Directors
- DIR 2: Consent of Directors
- Please submit the DIR 3 application to the ROC to obtain a DIN.
- INC 1: Business name approval
- INC 12: Applications for License
- INC 13: Memorandum of Association
- INC 14: A practicing CA provides an INC 14 declaration.
- INC 15: Each applicant has signed the INC 15 Declaration.
- INC 16: The INC 16 license is required for incorporation as an NGO.
- INC 22 Situation of the Registered Office
- INC 7 Applications for Company’s Incorporation
- INC 8 Declarations
- INC 9: INC 9 has received affidavits from each director and subscriber.
Documents Required for NGO Registration
An NGO must submit specific documents before receiving a registered deed.
Section 8 Company
The following documents are required for a Section 8 company registration:
- Provide the company’s name for approval.
- Address proof of the office. It can be an electricity or water bill, or a house tax receipt.
- All directors must provide identity proof.
- Driving License
- Copy of Passport
- Voter ID
- Aadhaar card The Company’s Memorandum of Association and Articles of Association are in place.
Trust Registration
The following documents are mandatory for the trust registration:
- An electricity or water bill with the registered address is required.
- At least two members of the company must provide identity proof. The proof can be:
- Voter ID
- Driving License
- Passport
- Aadhaar Card
The Indian Trust Act of 1882 needs about 8 to 10 days to complete the online registration after payment. Before the deed becomes valid in the country, the settler needs to deliver a presentation at the registrar’s office.
Society Registration
The following documents are essential for a society’s registration:
- The name of the society.
- Address proof of the office.
- All nine members are required to provide identity proof, which can be:
- Driving License
- Copy of Passport
- Voter ID
- Aadhaar card
- The society has two copies of its Memorandum of Association and by-laws.
Process of NGO Registration
- Determine the type of NGO: Based on the organization’s objectives and activities, determine the most suitable NGO structure, including a trust, society, or section 8 company.
- Select a Unique Name: Choose an NGO name that is unique, reflects its mission and purpose, and is not similar to any existing registered entities.
- Prepare the Memorandum of Association (MoA) and Articles of Association (AoA): Drafting the MoA and AoA is necessary to outline the objectives, rules, and regulations that govern the operation and management of the NGO.
- Formulate the Governing Body: Establish a governing body or managing committee that consists of individuals who are to oversee the NGO’s decision-making processes and operations.
- Provide a Registered Office Address: Designate a registered office address for the NGO, which will serve as the location for the submission of official communications and legal documents.
- Prepare the Required Documentation: Gather identity proofs, address proofs, and photographs of the members of the governing board.
- Fill out the registration application: Depending on the selected NGO structure, submit the registration application and the necessary documents to the appropriate authority, such as the Registrar of Societies, the Registrar of Companies, or the Registrar of Trusts.
- Review and Approval: The registration authority will evaluate the application as well as supporting documents. Furthermore, if required, they may request clarification or additional information.
- Obtain the Registration Certificate: The registration authority will issue a registration certificate, which will confirm the legal status of NGOs after a successful review and approval.
- Apply for Tax Exemptions: To apply for tax exemptions under the Income Tax Act, obtain certifications such as 12A and 80G after receiving the registration certificate.
- Ensure Compliance and Reporting: Ensure compliance with ongoing statutory requirements, which include the submission of audited financial statements, the maintenance of accurate accounts, and the filing of annual returns.
How do I raise funds for NGOs?
There are various methods to raise funds for an NGO:
- This includes the solicitation of small donations from many individuals through online platforms.
- NGOs can apply for grants from various sources, including government agencies, private foundations, and international organizations that provide funding for social causes.
- They can sponsor programs and donate to causes with companies that share their values.
- Organizing fundraising events such as charity walks, concerts, and auctions, as well as online campaigns like Giving Tuesday, can effectively attract donors and raise funds.
- NGOs can directly approach potential benefactors or utilize online donation portals to encourage them to donate to their cause.
- Non-governmental organizations (NGOs) can utilize social media platforms such as Facebook, Instagram, Twitter, and LinkedIn to raise awareness of their cause and reach potential donors.
What are the NGO registration fees?
The NGO registration fee differs depending on the country and the specific registration procedure. The regulatory bodies’ requirements, the type of NGO, and its location all have an impact. The registration fee can range from a nominal amount to a substantial sum, depending on the NGO’s specific character and the country’s laws and regulations. Additionally, it is necessary to account for the expenses that are linked to legal compliance, documentation, and other regulatory requirements.
How long does it take to register an NGO?
- There is a trust incorporation process that will take 20 days.
- The process for Section 8 company takes 10–14 days.
- The society registration process will take another 25 days.
Summary
In order to operate legally and receive benefits like tax exemptions and increased credibility, nonprofit organizations need to register as nongovernmental organizations (NGOs). In India, the Indian Trusts Act of 1882 and the Societies Registration Act of 1860 govern the registration of NGOs as trusts, societies, or Section 8 corporations. The registration process includes choosing a unique name, drafting important documents such as the Memorandum of Association, establishing a governing body, and submitting the required documentation to the appropriate authorities. Once registered, NGOs must adhere to continuous legal requirements and can raise funds through various methods. Registration fees and processing periods are subject to change; however, trust incorporation typically requires approximately 20 days, Section 8 company registration typically requires 10–14 days, and society registration typically requires 25 days.
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FAQ’s
In India, specific acts and regulations govern the registration of NGOs as Trusts, Societies, or Section 8 Companies. The Indian Trusts Act of 1882 governs Trusts, the Societies Registration Act of 1860 governs Societies, and the Companies Act of 2013 governs Section 8 Companies.
Various benefits are available to registered NGOs, including the ability to attract volunteers and resources, eligibility for grants and donations, increased credibility, the ability to establish a bank account in the organization’s name, and tax exemptions.
Registration times vary depending on the nature of the non-governmental organization. Typically, the registration of a trust takes approximately 20 days, while that of a Section 8 company takes 10–14 days. That of a society takes approximately 25 days.
NGO registration documents require the identity proofs of members (e.g., Voter ID, Driving License, passport, Aadhaar Card), address proof of the office (e.g., electricity bill, water bill), a Memorandum of Association, Articles of Association, and additional forms specific to the type of NGO.
To start an NGO, a minimum of two directors is required for a private limited company and at least three directors for a public limited company. For public limited companies, there is no member limit, whereas private limited companies can have a maximum of 200 members.
Yes, NGO registration fees differ depending on the country, the type of NGO, and the specific registration process. These fees can range from nominal amounts to substantial sums, influenced by regulatory requirements and legal compliance costs.
Yes, NGOs can apply for tax exemptions under the Income Tax Act by obtaining certifications such as 80G and 12A. These exemptions allow NGOs to allocate additional resources to their operations and projects, thereby reducing their expenditures.
NGOs have the ability to raise funds through a variety of methods, such as online donations, corporate sponsorships, fundraising events, direct donor appeals, and social media campaigns, in order to increase awareness and attract potential donors. Additionally, they may receive grants from government agencies and private foundations.