Summary: A Non-Governmental Organization (NGO) is an independent, non-profit entity that operates separately from government control, though it may receive government funding. In India, NGOs can be registered under three main structures: as a Trust under the Indian Trusts Act, 1882; as a Society under the Societies Registration Act, 1860; or as a Section 8 Company under the Companies Act, 2013. Each structure serves different purposes: Trusts for charitable and religious activities, Societies for cultural and educational goals, and Section 8 Companies for various non-profit objectives with legal status and tax exemptions. NGOs are categorized based on orientation—charitable, service, or participatory—and operation—community-based, city-wide, national, or international. Benefits of registration include legal recognition, tax exemptions, and credibility. To raise funds, NGOs can seek donations, apply for grants, or use crowdfunding. Registration involves selecting a structure, preparing legal documents, and submitting them to relevant authorities. Continuous compliance with legal requirements and transparency are crucial for sustaining NGO operations and impact.
♦ TYPES OF NGO REGISTRATION IN INDIA:
i. Trust under Indian Trusts Act, 1882
A trust is a legal entity created when the owner (trustee) transfers property to another person (trustee) to be held for the benefit of specific individuals or purposes.
Trusts are governed by the Indian Trusts Act of 1882.
Trust registration is ideal for charitable activities, educational institutions, and religious purposes.
ii. Society under Societies Registration Act, 1860
A society is a voluntary association of individuals who come together to promote a common objective, such as cultural, educational, or charitable goals.
Societies are governed by the Societies Registration Act 1860.
Society registration is suitable for organizations engaged in cultural, educational, or charitable activities.
iii. Section 8 of Companies Act, 2013
A Section 8 not-for-profit company is registered under the Companies Act 2013.
These companies are formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, or protection of the environment, and the profits are reinvested for achieving these objectives.
Section 8 companies enjoy legal status, limited liability, and tax exemptions
♦ CLASSIFICATION OF NGO IN INDIA:
I. Based on Orientation
ii. Charitable Orientation
It covers NGO with campaigns directed towards fulfilling the needs of the poor – clothing or medicine, food distribution, housing provision, school, transport etc. Such NGO also take active participation in case of natural catastrophe to support troubled lives.
iii. Service Orientation
Service Orientation includes NGOs with campaigns dedicated toward the promotion of education, health, and family planning.
iii. Participatory Orientation
Participatory Orientation is symbolized by self-help projects where local individuals are engaged with the deployment of a project by contributing in terms of money, land, tools, labour, material etc.
II. Based on Operation:
i. Community-based Organizations (CBOs)
Community-based Organizations come to light with the effort of people’s own initiatives. These can encompass women’s organizations, sports clubs, educational organizations, and neighborhoods organizations.
ii. City wide Organizations
City wide Organizations includes entities such as lion’s club, chambers of commerce and industry, associations of community organizations, and ethnic or educational groups.
iii. National NGO
National NGOs include entities such as the Red Cross, professional organizations, YMCAs/YWCAs etc. Some of these possess state & duty branches & provide support to local NGOs.
For Knowledge:
- Red Cross: Doctors without border
- YMCA: Young Male Cristian Association.
- YWCA: Young Female Cristian Association.
iv. International NGO
International NGOs encompass secular institutions such as Save the Children agencies, Care, Oxfam etc.
Examples of NGO:
- Educational NGOs
- Health NGOs
- Human Rights NGOs
- Environmental NGOs
- Community Development NGOs
♦ Benefits of NGO Registration:
i. Legal Recognition: Registration gives an NGO a legal identity, allowing it to operate freely and independently.
ii. Tax Exemption: Registered NGOs are often eligible for tax exemptions, enabling them to allocate more resources to their causes.
iii. Credibility and Trust: Registration enhances an NGO’s credibility, helping to build trust with donors, partners, and beneficiaries.
iv. Access to Funding: Registered NGOs can apply for grants, funding, and partnerships with government agencies, foundations, and corporations.
v. Protection of Assets: Registration provides protection for an NGO’s assets, ensuring they are used solely for the organization’s purposes.
vi. Ability to Open a Bank Account: Registered NGOs can open a bank account, facilitating financial transactions and management.
vii. Compliance with Laws and Regulations: Registration ensures an NGO complies with relevant laws and regulations, minimizing legal risks.
viii. Enhanced Transparency and Accountability: Registration promotes transparency and accountability, as NGOs must submit annual reports and financial statements.
ix. International Recognition: Registration can facilitate international recognition, allowing NGOs to participate in global initiatives and networks.
By registering, an NGO can establish a strong foundation for its operations, enhancing its ability to achieve its mission and make a positive impact.
♦ TAX BENEFITS FOR REGISTERED NGOS:
i. One of the significant advantages of NGO registration is access to various tax benefits and exemptions:
ii. 80G Certificate: Registered NGOs can apply for an 80G certificate, which allows them to offer tax benefits to donors. Donations made to an NGO with an 80G certificate are eligible for deductions under Section 80G of the Income Tax Act.
iii. 12A Certificate: NGOs can also apply for a 12A certificate, which grants them exemption from income tax. This means that the income and profits of the NGO are not taxable.
iv. Exemption from GST: Registered NGOs engaged in charitable activities may be eligible for an exemption from Goods and Services Tax (GST) on certain services.
♦ HOW TO RAISE FUND FROM NGO:
i. Donations: Reach out to individuals, corporations, and foundations for one-time or recurring donations.
ii. Grants: Research and apply for grants from governments, foundations, and corporations.
iii. Crowd funding: Utilize platforms like GoFundMe, Kickstarter, or Indiegogo for online campaigns.
iv. Events: Organize charity events, runs, walks, auctions, or galas to raise funds.
v. Corporate Partnerships: Collaborate with businesses for sponsorships, cause-marketing, or employee engagement.
vi. Membership Programs: Offer membership benefits in exchange for recurring donations.
vii. Volunteer Fundraising: Engage volunteers to raise funds through personal networks.
viii. Online Fundraising: Leverage social media, email marketing, and online platforms.
ix. In-Kind Donations: Accept donations of goods or services, like food, materials, or expertise.
Remember to stay compliant with local regulations, maintain transparency, and express gratitude to donors.
♦ DOCUMENTS REQUIRED FOR REGISTRATION:
For an NGO registered in India, the following documents are typically required for registration:
| For Section 8 Company | For Trust | For Society |
| Memorandum of Association (MOA) | Trust Deed | Memorandum of Association |
| Articles of Association (AOA): | Certificate of Registration | Rules and Regulations |
| Certificate of Incorporation | PAN (Permanent Account Number) | Certificate of Registration |
| PAN (Permanent Account Number) | ID Proof of trustee | PAN (Permanent Account Number) |
| TAN (Tax Deduction and Collection Number) | Address Proof (Registered office address proof) | ID Proof (Member’s ID proof) |
| ID Proof (Director/Founder ID proof) | No Objection Certificate (From the owner of the Registered office) | Address Proof (Registered office address proof) |
| Address Proof (Registered office address proof) | Affidavit (From the trustees, stating their background, occupation, and purpose) | No Objection Certificate (From the owner of the Registered office) |
| No Objection Certificate (From the owner of the Registered office) | Declaration (A declaration stating that the trust will not distribute profits and will utilize them for charitable purposes.) | Affidavit (From the members, stating their background, occupation, and purpose) |
| Affidavit (From the founders/directors, stating their background, occupation, and purpose) | Annual Report | Declaration (A declaration stating that the society will not distribute profits and will utilize them for charitable purposes.) |
| Declaration (A declaration stating that the company will not distribute profits and will utilize them for charitable purposes.) | FCRA Registration (If the company intends to receive foreign funding) | Annual Report |
| License under Section 8(issued by ROC) | 12A Registration (income tax exemption) | FCRA Registration (If the company intends to receive foreign funding) |
| Annual Report | 80G Registration (tax exemption on donations) | 12A Registration (income tax exemption) |
| FCRA Registration (If the company intends to receive foreign funding) | Trusteeship Deed (A document outlining the roles and responsibilities of the Trustees.) | 80G Registration (tax exemption on donations) |
| 12A Registration (income tax exemption) | Mutual Fund/ Bank Account Details | Society Membership List: |
| 80G Registration (tax exemption on donations) | Registration Fee | Registration Fee |
♦ PROCESS TO REGISTER AN NGO:
NGO is a non-profit organization that works separately without the intervention of governmental authorities. In our country, NGOs can be registered as Trust, Society & Section 8 companies based on the undertaking a person wishes to perform. An NGO is an institution that functions for a social cause.
The criteria for registering NGOs under the aforesaid heads is also different. If you opt to register the NGO under the section 8 company, then you have to file an online application, viz SPICe+, on the MCA’s portal.
In view of the above, those who wish to register an NGO under trust needs to follow an entirely different process altogether. The procedure below will make you understand how one should approach when it comes to NGO registration under trust.
a. Type Determination: Choose the suitable NGO structure – Trust, Society, or Section 8 Company – based on your organization’s objectives.
b. Choose a name: Select a unique name for your NGO that reflects its purpose and mission
c. Define the mission and objectives: Clearly outline the NGO’s purpose, goals, and activities.
d. Prepare a Trust Deed, Memorandum of Association (MOA), and Rules and Regulations:
Depending on the type of registration, you will need to draft and execute the appropriate legal document:
- Trust Deed: For trust registration.
- Memorandum of Association (MOA):For Section 8 company registration.
- Rules and Regulations: For society registration.
These documents should outline the objectives, governance structure, and operational guidelines of your NGO.
e. Registered Office Designation: Provide an official address for communication.
f. Gather required documents: Collect necessary documents, such as:
- ID proofs of founding members
- Address proof
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Constitution or bylaws
g. Submission of Documents:
- Apply and supporting documents to the respective authorities:
- For trust registration: To the local registrar of the area where the NGO’s registered office is located.
- For society registration: To the registrar of societies in your state.
- For Section 8 company registration: To the Registrar of Companies (ROC).
h. Registration Fee: Pay the requisite registration fee as per the relevant Act and government regulations. The fee varies depending on the state and type of registration.
i. Scrutiny and Verification: Once the application and documents are submitted, the relevant authority will review and verify the details. This may involve scrutiny of the trust deed, MOA, and other submitted documents.
j. Obtain a registration certificate: Upon successful verification, the authority will issue a certificate of registration for your NGO. This certificate serves as proof of your NGO’s legal status and registration.
k. Apply for tax exemption: If applicable, apply for tax exemption or registration with the relevant tax authority.
l. Register with other authorities: Register with other relevant authorities, such as:
- Ministry of Foreign Affairs (for international NGOs)
- State or local government offices
m. Maintain compliance: Ensure ongoing compliance with legal and regulatory requirements, such as annual reporting and financial disclosures.
CONCLUSION:
In conclusion, the process of NGO registration in India is not merely a legal formality; it is a gateway to making a meaningful and sustainable impact on society. By obtaining legal recognition, NGOs gain access to a plethora of benefits, including tax exemptions, credibility, and eligibility for government grants.
The choice of registration type, whether as a trust, society, or Section 8 company, should align with the specific goals and objectives of the organization. It is a strategic decision that influences the legal framework, compliance requirements, and operational flexibility.
However, the journey does not end with registration; it is the beginning of a commitment to transparency, compliance, and impactful work. NGOs must diligently adhere to reporting and compliance obligations, maintaining accountability and trust with stakeholders.
Further related questions, What is the procedure to register a NGO? What are the steps for creating an NGO? What is the fee for NGO registration in Maharashtra? Can we start NGO without registration? What documents are required for NGO? How much money is required to start a NGO? How to get a NGO certificate? Can one person start an NGO? How to start NGO without money? What is the qualification for NGO?
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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
Author Bio
Difference between a charitable/religious trust and NGO may also be discussed.