In India, starting and running an NGO is almost similar to starting and running a business, with the exception that regulation is required. All non-profit organisations are eligible for income tax exemption. Non-profitable firms, which refers to a regular firm that does not make a profit, are sometimes misunderstood with these.
So many individuals desire to leave high-profile occupations to work in social services! If you’re one of them, you should know that forming a non-profit non-governmental organisation (NGO) is a quick and straightforward process. After establishing an NGO, one must work for the betterment of society without expecting financial gain.
What does a non-governmental organisation (NGO) mean?
A non-governmental organisation (NGO) is a type of organisation that focuses on social, cultural, legal, and environmental issues with non-commercial objectives. The majority of financing for NGOs comes from private sources.
A non-governmental organisation (NGO) is a task-oriented organisation with a shared goal that performs a range of service and humanity duties and communicates public concerns to governments.
What are the different types of NGO registrations available in India?
A set of regulations must be followed in order to run NGOs in the form of (Companies, Trusts, and Societies) properly. An applicant must follow the various laws in order to register in any of the ways listed below. There are three ways to register an NGO:-
- The “Indian Trust Act, 1882” governs trust registration.
- The “Societies Registration Act, 1860” governs society registration.
- Section 8 of the “Companies Act, 2013” deals with company registrations.
A charity trust can be established by an NGO. A Trust is a legal entity created when the “Owner” or “Trustor” distributes assets to the “Trustee” or second party for the benefit of the “Beneficiary” or third party. The trusts are established to assist and support the underprivileged members of society. A trust can be established by any group of people, and there are no special rules in India that govern public trusts. Some states, like as Tamil Nadu and Maharashtra, do, however, have their own Public Trust Act.
A society is a group of individuals who have come together through mutual agreement to discuss, rule, and act cooperatively for a common good. Sports, music, culture, religion, art, education, and other social causes are frequently registered as societies.
Society registration is governed by the Society Registration Act of 1860, which establishes particular procedures for society formation and operation. This act was passed to improve the legal requirements for society registration for the growth of literature, fine arts, technology, or the distribution of recognition for good reasons.
Section 8 company:
An NGO can be registered under the Companies Act 2013, as a Section 8 company, as a trust under the Trust Act 1882.
The procedure of incorporating an NGO under the Companies Act 2013 is known as Section 8 Company Registration.
A section 8 corporation can be formed to promote art, science, commerce, technology, sports, education, social research, social welfare, religion, charity, and environmental protection, among other things. After successfully completing the registration process, a Section 8 Company can work anywhere in India.
Documents necessary for online NGO registration include the following:
- A letter from the founders/trustees explaining the reason for the NGO’s registration in India.
- Articles of Association/Memorandum of Association [MOA/AOA].
- Members’ names, addresses, and full details Address proof [if rented, a letter from the landlord].
- Receipts for donations [if any have been received before].
- Affidavit signed by the NGO’s president.
- Founder’ s declaration, duly signed.
Steps to forming an NGO in India:
- Step 1: Choose your NGO’s purpose and objective.
- Step 2: Form a board of directors and members.
- Step 3: Choose a name for your non-profit organisation.
- Step 4: Memorandum and Articles of Association/Incorporation.
- Step 5: Register your non-profit organisation.
- Step 6: Start collecting funds.
- Step 7: Create a large network
Advantages of NGO Registrations in India:
Right to Acquire Assets:
Once your business is formally registered, you can buy property, hold fixed assets, and/or take on liabilities under your common seal.
NGOs are free from a variety of taxes, allowing the company to save money on taxes and invest the savings in new projects.
No Stamp Duty:
In India, no stamp duty is levied on the creation of a Section 8 company since it goes against the regulation forcing the payment of stamp duty on the Memorandum of Association and the Articles of Association of a private limited company.
Financial Plan with Structure:
Having an NGO can provide you with a tax-free method for the activities you carry out on behalf of the registered NGO. Non-profit organisations are excused from paying taxes since they are not for profit. You can create a well-structured financial strategy that permits your company to operate without incurring any tax liabilities.
Stability is important:
Your organization’s registration may suggest that it has effective and accountable structures in place. When compared to an unregistered group, the public will regard it as more stable. Political parties, the government, donor agencies, financial institutions, charitable groups, and other non-governmental organisations (NGOs) will all wish to work with a recognised organisation to achieve common goals.
Opening a current account with a bank for your NGO may suggest that you are open and honest. Some private individuals, government organisations, donor agencies, and other NGOs will be uncomfortable to write you a check in your own name on behalf of your organisation. A bank account for the NGO would be proof of its validity and ready to accept donations. To open a bank account, you must present confirmation that your organisation is registered with the Corporate Affairs Commission.
How can we help you?
Our best CA/CS will assist you with NGO registration online from anywhere in India. We are cost-effective and then provide affordable services to anyone looking to create a company/business or any other type of organisation.
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