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why NGO is needed to be registered in India

A non-governmental organization (NGO) is a citizen-based association that operates independently of government, usually to deliver resources or serve some social or political purpose. 

What is a Voluntary Organization (VO) / Non Governmental Organization (NGO)?

Voluntary Organizations (VOs) / Non Governmental Organization (NGOs) include Organizations engaged in Public Service, based on Ethical, Cultural, Social, Economic, Political, Religious, Spiritual, Philanthropic or Scientific & Technological considerations.

VOs include formal as well as informal groups, such as:

  • Community Based Organizations (CBOs);
  • Non-Governmental Development Organizations (NGDOs);
  • Charitable Organizations;
  • Support Organizations;
  • Networks or Federations of such Organizations;
  • As well as Professional Membership Associations.

VOs / NGOs should broadly have the following characteristics:

  • They are private i.e. Separate from Government
  • They do not return profits generated to their owners or directors
  • They are self-governing i.e. not controlled by Government
  • They are registered organizations or informal groups, with defined aims and objectives

In India a Voluntary Organization / Non Governmental Organization can be registered as Trusts, Societies, or a Private Limited Non Profit Company, Under Section – 8 Company of the Indian Companies Act, 2013.

NGO Registration Startup Scratch

What is minimum number of People required to start an NGOs

  • To start a NGO in Trust registration, you need at least 2 people.
  • To start an NGO in Society registration, you need at least 7 people.
  • To start an NGO at a nation level, you need at least 8 people.

Can I be eligible for an Ngo if I reside in one state but my documentation is from another?

Yes, you can if you are an Indian citizen and if you have proof of ID. Then you can go.

Can NGO members receive a salary for living expenses?

Yes. As an employee, you will get a salary, although NGOs are nonprofits. They need employees to make NGOs functional.

How can I make a profit from an NGO?

The purpose of NGOs is purely nonprofit based. Thus, if you want to make a profit, an NGO is not for you, as all proceeds must be put to the causes the NGO cares for.

Can I open an NGO on disputed land?

No. You need private land. Any person can donate land to the government for construction of an NGO.

 

STEP TO START YOUR OWN NGO IN INDIA

  1. Lay down the issues that your NGO wants to address, and identity the mission and vision.

 

  1. Before registering the organization, you need to have a governing body in place, that will be responsible for all activities and decisions of the organization
  • The Government Body will be involved in all matters of strategic relevance, including strategic planning, financial management, human resources and networking.
NGO Registration Process Startup Scratch
  1. Every NGO in India is legally required to document a trust deed/ Memorandum of Understanding/Bylaws that contain the name and address of the NGO, mission and objectives, details of governing body members, human resource and staffing information, rules and regulations, administrative laws and procedures.

 

  1. In India, you may register an NGO under any of the following Acts:
  • Indian Trusts Act: A Charitable Trust is not legally obliged to obtain registration; unless the Trust wants to claim income tax exemptions or is based in a state that is governed by the Public Trusts Act, such as Maharashtra.
  • Societies Registration Act: A society can be formed by a group of seven or more people. Its formation is more complicated than that of a trust, but it also affords more flexibility in terms of regulations.
  • Companies Act: An association that is formed for the promotion of art, science, commerce, religion or charity can be registered as a company but its members cannot be paid a dividend. All profits should be utilized for furthering the objectives of the company.

 

  1. Raise funds through internal sources (membership fees, sales, subscription charges, donations, etc.) or grants-in-aid from the Government, private organizations or foreign sources. Inflow of foreign funds is governed by the Foreign Contribution Regulation Act (FCRA) 1976. Many NGOs are eligible for tax exemptions – be sure to check your eligibility status and file your application if the exemption applies to you.

 

  1. Besides meeting the above mandatory requirements, you need to build a wide professional network with other NGOs, government agencies, media and the corporate sector. Like most other organizations, an NGO thrives primarily on the strength of partnerships.

How To Start An NGO In India – NGO Registration Process

If you have reached to this thought of starting an NGO (Non-Governmental Organization) in India, well indeed, you deserve a good pat on your back! There are many NGO start ups emerging in the lands of India in the recent years. If you are at the search of how to register an NGO in India, your search ends here! Starting an NGO in India can be little difficult, but not farfetched! Some good knowledge about its registration process on ‘how to register’ and other formalities helps you to go ahead with it.

Well, NGO intends to promote a specific cause or welfare of humanity. These are non profitable organizations unlike other business entities, so here you know the purpose of your NGO, which is mainly a charitable intended venture, but not profit making. Before you proceed with its set up, a detailed check on the government regulations on starting an NGO would be needed. To give more clarity in starting an NGO in India, here are some steps you need to follow:

  1. First and foremost analyze the mission and ultimate goal of your NGO. By this, you can figure out that what you have to do and from where exactly you have to start!
  2. After this, form a governing body that focus on the decision making in the NGO. This is in fact to be formed before the registration of your NGO in India. The focus of he governing body has to be strategic formulations, to plan things, fund raising aspects, managing the people and IT related activities.
  3. As per the Indian rules, while you open an NGO, you have to do trust deed documentation. In other words, form a Memorandum of understanding that describes your NGO contact details, its goal, mission and vision, policies, procedures, laws and so on.

 How To Register An NGO In India?

All these are to be arranged and done before you start the registration process. Now it’s the turn to register your NGO, which has to be according to the Indian laws. In India, to start an NGO, it can be done through some acts, as below:

Indian Trust Act: If you are forming a charitable trust, then it is mandatory to get a registration. However, in case of a need for income tax exemption, you can go for its registration. Also, if you are planning to start an NGO in a state where Public Trust Act is applicable, say, Maharashtra, it is better to get a registration.

Companies Act: If the intention of your NGO is to promote any art forms, or science, business or religion related activities, The registration of the NGO has to be in the form of a company. However, unlike a profitable business organization, the profits of the NGO go to the objectives of the NGO, and not to its members.

Societies Registration Act: If your NGO is having more than seven members, it is ideal for you to start NGO as a society. However, on a dim side, the process of registration is more difficult compared to other types. On a lighter side, this type of registration is comparatively tightened with fewer regulations.

Raising Fund for your NGO.. How To Raise Funds?

Next comes about raising fund for your NGO. You can either opt for internal resources. This can be through claiming membership fees for the events conducted, or through selling the products like handicrafts etc, by getting donations from people or institutions etc. Funds are also raised from government’s aids, foreign companies/people. As per Foreign Contribution Regulation Act (FCRA) 1976, fund raising from foreign sources can give you tax exemptions!

A look at NGO Registration process in India

Any nonprofit organization or NGO can be registered as a trust, society or Section 8 Company in India. Your decision on its choice can be related to the NGO objectives also. Let’s see how these turn to be:

  1. Trusts: Formation of a charitable trust is basically done when you plan to involve a property like land or building.

LegislationBased on the state that you plans to start the trust, there will be difference in each trust act in different states. Hence, you need to look at the norms of the local trust act. In case the state does not have trust act, then you can carry out the registration process based on the norms of Indian Trust Act 1882.

Main Instrument: Trust Deed is the main instrument of a public charitable trust, in which there will be the objectives of the management. Trust deed also shows the number of trustees, the ways of managing the trust, the trust objectives, whom to be appointed or to be removed and so on. Signing of Trust Deed is to be done by both settler and trustee in front of two witnesses. In a trust, the number of trustees has to be two at least.

Registration application: You have to forward the registration application to the officer who have the jurisdiction in the place where you plan to open the NGO. Details regarding the name of the trust, number of trustees etc to be filled in the application form, which is to be affixed with a Rs.2 court fee stamp. You can submit both trust deed and this application form together.

  1. Society:As per Societies Registration Act, 1860 (section 20), restriction to the registration as society applies to societies formed with the intention to promote art, science, Political studies, formation of libraries, galleries and museums, history or mechanical based societies, military orphan funds etc.

Trustees: For a society, there is a requirement of minimum seven members and no maximum limit. The management can be formed as a governing body or a body of executive committee.

Application for registration of an NGO: You can register the society in the registrar office at a state level or in the district magistrate office or Registrar of society local office, at a district level. The registration process is different in each state. While submitting the application form, you have to also submit the memorandum of association (MOA), all members consent letters, authority letter that I signed by all the society members, the president’s affidavit in Rs.20/- stamp paper and also the declaration given by all committee members stating that the society fund will be utilized for only its object and aim. The duplicate of these forms to be submitted along with a nominal registration fees. Here, the MOA need not to be submitted in stamp paper.

  1. Section 8 Company

If your intention is to promote art, science, charity purpose etc, as per the company act of 2013, then you can form the NGO as a Section 8 company. However, its income is used only for the objectives of NGO and no divided is shared among the members.

Legislation: Registration of Section 8 Company is done as per the Indian companies Act, 2013.

Main Instrument: The main instrument of your Section 8 company is Memorandum and articles of Association. However, you are not required to register it in a stamp paper.

Trustees: Trustees number limits to a minimum of three members for a section 8 company with no upper limit of trustees.

Application for Registration: In a prescribed INC – 1, you need to submit the application form to the registrar of companies for choosing the NGO name, along with a Rs.1000/- fee. A choice of Six names can be given so that the registrar can choose as per the name availability. After name availability, you need to write the application to the regional director along with the printed copy of memorandum. The memorandum should include promoters name and address, statement showing asset details, statement showing work description, consent of each members that application is made in their sound mind etc. The application is to be submitted to the registrar of companies.

NGO Registration Process Startup Scratch

Comparision among Trust, Society and Non profit Company

 TrustSocietySection-8 Comapny
Statute/LegislationRelevant State Trust ActSocieties Registration Act, 1860Indian Companies Act, 2013
JurisdictionDeputy Registrar/Charity commissionerRegistrar of societies (charity commissioner in that State).Registrar of companies
RegistrationAs trustAs Society
In Maharashtra, both as a society and as a trust
As a company u/s 8 of the Indian Companies Act.
Registration DocumentTrust deedMemorandum of association and rules and regulationsMemorandum and articles of association. and regulations
Stamp DutyTrust deed to be executed on non-judicial stamp paper, vary from state to stateNo stamp paper required for memorandum of association and rules and regulations.No stamp paper required for memorandum and articles of association.
Members RequiredMinimum – two trustees. No upper limit.Minimum – seven managing committee members. No upper limit.Minimum three Members. No upper limit.
Board of ManagementTrustees / Board of TrusteesGoverning body or council/managing or executive committeeBoard of directors/ Managing committee
Mode of Succession on Board of ManagementAppointment or ElectionAppointment or Election by members of the general bodyElection by members of the general body

NGO Registration Process : Trust, Society and Non Profit Company

 

Procedures, Rules and RequirementsCompanySocietyTrust
Registration processes have the status of Non Profit Organisation (NGO) / Non Profit Organisation (NPO)Non Profit Company is an NGO/ NPO.Society is an NGO / NPO.Trust is an NGO / NPO
There is no difference in the registration process in the status of ‘NGO’ in any organisation registration process.
Law/Act applied for to register NGOCompanies Act.Societies Registration Act, 1860Indian Trusts Act
Time takes to Form3-6 Months.1-2 Months.From 2 days to one week.
Registering AuthorityRegistrar of Company.Registrar or Deputy Reg. of Societies of the concerned State/ Charity Commissioner.Sub-Registrar of Registration/ Charity Commissioner.
Issue of Name approvalBefore registration name approval is required by application to ROC.If any other NGO is not registered with the required Name in the particular jurisdiction of registration, then it is possible. And if any other Society (NGO) is registered with the name in that registrar then it can not be approved and provided.Name approval is not required, if the name is not under Emblem Act.
The State Emblem of India (Prohibition of Improper Use) Act, 2005Name cannot be approved if the name is restricted under the Emblem Act.Name cannot be approved if the name is restricted under the Emblem Act.The names restricted under the Emblem Act can be disapproved. But sometimes some Deputy Registrars and Readers refuse the other names which are not under the Emblem Act, just due to their personal and unofficial reasons, this is illegal they can not do it. If they do such actions, they can be legally challenged against their offensive and unauthorised actions.
Eligibility of Family Members to be Member of OrganisationAnybody can be the director of a Company. But certain Government Ministries/ Departments and funding agencies can refuse funding for the Company having same family members as directors.Members of the same family can not be member in a Society.There is no restriction in formation of a Trust with members of the same family.
But certain Government Ministries/ Departments and funding agencies can refuse funding to the Trusts those are having same family members as Trustee. So initially family members can be there to form NGO but at the time of funding from certain Ministries or Funding agencies the Trustees can be changed.
Minimum Members/ Directors/ Trustees at state level Registration requiredMinimum Two Directors.Minimum Seven Members.At least (Minimum) Two Trustees.
Minimum Members at National level requiredMinimum Two Directors.Minimum Eight Members from 8 different states are required in National level Society.Minimum Two Trustees only, no limit of maximum Trustees/ Members.
Governing Structure1. General Body of Directors.
2. Board of Directors.
1. General Body.
2. Executive Committee.
1. General Body/Board of Trustees.
2. Executive Committee.
Or Only one General Body of Trustees.
Area of operation of NGOCompany can be operated throughout India. National validity is there as the registration is granted by the Central Government.Society can be operated throughout India when registered as a National level society. When a society is registered in one State, area of operation will be in that state only.Registration under Trust Act has national validity and can operate throughout India. Some certain terms, clauses and processes are applicable during registration and after registration.
Status for Rights of Vote and PowerProvision of the voting rights vary on the basis of share holding capacity of Directors.All members of a society have equal rights in the General Body.All Trustees have equal rights except the Settler, if there are any specific powers are provided. Authorised persons have different powers.
Can get funding. There is no difference to get funding in any of the NGO form.Company can have funding possibilities.Society can get funding if it is eligible according to the terms of the funding agencies or Government Ministries or departments.Trust can get funding if it is eligible according to the certain terms of the funding agencies or Government Ministries or departments.
Annul Reports and other Documents to be submitted or filed apart from Income tax departmentCompany  has to submit Annual Return and audited accounts at the financial year end.According to the Section 4 of Societies Registration Act Annual list of managing body is to be filed every year. Resolutions are also submitted for approval in certain cases in certain states and in all or certain cases in some states.No Annual report, resolution or any documents are required to be submitted or filed after registration of Trust to Registering authorities.
Only the General body and other executive committees or any sub committees have to maintain their own registers of meetings, resolutions, decisions and/or any other activities regarding decisions.
General Body and Board meetingsIn the Companies Act there are specific provisions of meetings. At least one Annual General Meeting and 4 Board meetings are required to be held every year.General Body and Board meetings are required to be held as prescribed in the bye laws of the society. To follow the democratic pattern of society, regular meetings should be held for active societies.No provisions exist to organise meetings. But to follow the democratic pattern of working of NGO registered under Trust Act, regular meetings should be organised for active Trusts. To organise meetings, adequate rules can be framed in the trust deed.
Transfer of Directorship/ Membership/ TrusteeshipDirectorship can be transferred. Restriction on the transfer can also be placed.Membership of Society is not transferable according to the Act.There is no provision to transfer the Trusteeship in the Indian Trust Act.
Can use Foundation, Trust, Society, Samiti, NGO words with the name of organisationFoundation, Samiti word can be used with the name.Foundation, Samiti, Society, Organisation words can be used with the name of society.In the name of Trust the words Foundation, Trust, Samiti, Society or any words can be used. No need to use Trust word along with the name during Trust registration.
Can a foreigner be a director/ member/ trusteeForeigners can be directors.A foreigner can be a member of society.There is no restriction and provision to foreigners to be or not to be members. So foreigners can be members of a Trust.
If there is a foreigner in any NGOThere may be certain difficulties to get FCRA registration.It is difficult to get FCRA registration if there is any foreigner member in a Society.If there are any foreigner members in a Trust then it may not possible to get FCRA.
Provision of Recurring expenditureAnnual Returns and balance Sheet are filed with certain fees. Have to pay fee if there is any resolution to approve.Negligible and minimum statutory compliances are required.No statutory recurring expenditure after registration.
Eligible for School/ College FormationNon Profit Company is eligible for School/ College formation except in certain States of India.Society is eligible for School/ College formation in all States of India, including Rajasthan.Trust is eligible for School/ College formation except in few certain States of India like Rajasthan. So if you want to form school/ college in those states you have to register a separate society and can run a Trust as an NGO for social development works.
Can members get Payment or can notGeneral body of Company can approve to get payment.General body can permit and approve to get payment.Trustee can not receive Payment but if there is a provision to get funds in the trust deed then Trustees can receive payment for project or if the Trustee is providing professional service or consultancy.

So it must be clear that there can be any kind of NGO but status are equal as NGO.

NGO Registration Process Startup Scratch

Why to Register NGO

Why social workers need to register their Group, Organisation Voluntary Organisation, People’s Organisations Non Profit Organisation (NPO)/ Non Governmental Organisation (NGO)
In our society if we are doing social, voluntary, charitable, welfare, development work and activities then can do at our own level and along with like minded persons then we do not need and we do not have to register  the group to perform social service. In case if we are working with or we want to work with any social organisation/NGO then we can do social or voluntary service without our responsibilities for the resources, if we are not reliable for manage it and associated in the management team of the organisation. And if someone or some people are doing voluntary, social work and social service then initially the required resources can be managed by their own capacities, with the help of the persons and contributions of their like minded persons or some organisations. But the social workers, social activists or volunteers want to plans to form an organisation then they have to register it legally as a registered organisation.

Sometimes we want to organise and run social development programmes, projects and activities then there must be a legal registered status of the organisation in which or under which we want or planning to work. Initially we can run and organise programmes at our level but if we want to run, manage, operate and organise the programmes at vast and broader level then we have to make a team and group. And the team and group of people must be formed as a registered organisation/body if we are planning or we want more resources for the organisation and if we want to work in more organised way. Many persons are involved in many social development programmes and activities in rural and urban areas individually, with other organisations/NGOs but in some areas where there is no such NGO or organisation already working or working according to the parameters of the people want to provide social service in their sector or the group of people or any individual persons want to start their own social entrepreneurship so they have to register the organisation. And the organisation can be registered as NGO.

 

Why we have to register organisation even when we are capable to run and organise the programmes and social activities without the registration?

Due to many issues, reasons and circumstances we have to get registered to our organisation just due to some certain reasons:

  • When any person or a group of persons working and raising funds and getting donations for their task then for the accountability there must be a legal status of the organisation.
  • When we need assets for the social task we are performing or actively associated with the group and organisation then the assets or resources can be gained or received individually from others if any organisation is not registered.  But when the organisation is registered then the assets and resources can be received in the name of the organisation. It is well known that the registration status leads to the development of systematic thinking and functioning of the NGO.
  • There are certain ethical, social and legal regulations and rules of society, if we are working as a social group or organisation then we have to follow them, in this case the registration matters.
  • If we want to get funds and money to run, organise and manage programmes and activities then we have to save and deposit the fund and money in bank account according to social and legal parameters. To open a bank account it is compulsory to have a registration of the body or organisation according to bank laws and parameters. The banks need registered oraganisation’s memorandum, registration certificate resolution to open, manage and handle the bank account and transactions of bank account of the organisation.
  • If some people or group of people want resources, money and funds from the support organisations, funding organisation, government bodies/miniseries/corporations/departments then the organisation must be registered along with their required agendas and parameters whatever can be.
  • If the organisation/NGO want funds from foreign funding agencies or foreign supporters then the NGO must be registered to get the certificate to get the foreign funding. The certificate to get foreign funding is required temporary prior permission or permanent registration under Foreign Contribution  Regulation Act (FCRA) and it is provided by Home ministry according to certain rules and formalities. So if NGO want to get FCRA so apply for the FCRA registration, the applicant NGO must be registered.
  • If the NGO wants Tax rebate for its own fund that is deposited in bank or to provide Tax exemption to the donors then registration from Income Tax department is necessary. To get the Tax exemption certificate under 12 A and 80 G then it must be registered NGO.
  • So the registration decides the status of NGO and it is the base to get help from all kind of required and relevant registration authorities, funds and support from the relevant departments, available opportunities for legally registered organisations, technical support and rebates to get resources, assets, equipment and commodities
  • It is clear that a NGO as registered organisation more opportunities and credibilities to get fund from the funding agencies those who want to provide certain limit of funds to certain registered NGOs. The individuals or not registered groups can get a limited funds or resources if any funding agency have such options to provide funds; but in case of registered and recognised NGO, there are more options to get the funds for which the NGO is formed. Registered NGO can obtain legal status get funds in order to enable them to interact at the official level among donors and funding partners.
  • If the organisation is registered as NGO and want support to run it like a change making organisation then the beneficiaries and funding agencies require its mission statement, vision, aims, objects and programmes and projects on which it wants to implement the aims and objects. The mission, vision, aims, objects, targets are part of the memorandum of the registered organisation. The Memorandum of Article is included with the Bye-laws, applicable rules and regulations of the certain acts and laws under which the NGO is to be register or registered. The registered NGOs has to manage its profile, programme and activity reports, annual activity reports, financial, income and audit reports that include income and expenditure resources, management of NGO to maintain the record of programmes and meetings by maintaining the register of minutes of the General Board/Body, Executive Board/Body those endorse and manage the the NGO and other assets, resources and documents.

 

To register an NGO is not a big matter but how it is registered and under which act and laws it is registered and what aims, objects and bylaws are included to register the NGO it matters most. After registering it is a social entrepreneurship to manage and run the organisation with its predecided and ongoing targets and new challenges. To run a profitable business and to run an non-profit organisation takes almost same process to run and mange it with certain obligations associated with registration. The main difference is that in profitable business the owner, proprietor, partner or director can get profit but in Non-Profit Organisation the members or formers can not get profits but the income or any earning have to contribute and provide to the reliable beneficiaries for social and public charitable purpose.

NGO Registration Process Startup Scratch

After establishing an NGO it is necessary to manage and maintain it and in that process it include many thing such as reporting to the authorities and government bodies/ministries/corporations/departments, keeping detailed and transparent record of social activities, income and financial activities, income and expenditure records, establish, set up and manage offices, organise programme/activity centers and other required resources that are applicable according to tasks, programmes and related issues.

 

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