NGO Registration In India

Generally we believe that most of the businesses work with the motive of earning huge benefits, expansion and global recognition. However, there are certain organisations which may or may not be in the form of a company, but they do work for various social causes such as poverty alleviation, child health & education, encouragement for sports or any other subject, preservation of art & culture, environmental issues etc. by undertaking various activities. Such organisations are known as Non-Governmental Organizations (NGO or Non-Profit organizations, Charitable Organisations etc (NGO Registration).

The concept of an NGO was first introduced under Article 71 of the Charter of United Nations Act in 1945.It is established with a particular objective along with a separate and independent existence from that of the Government of India, yet is subject to the rules & regulations made for its functioning and is not allowed to either share profits among its members nor to hold profits/funds in the long run. Such funds or profits must be invested towards the social/political or religious objectives pursued by such organizations.

Following are the salient features of NGO’s in India-

  • NGOs are self-governing bodies existing separate from Government bodies and undertake activities apart from the schemes launched by the Government of India. Sometimes, they may work closely in association of the Government to implement schemes better. They may also take up issues to Government for their resolution.
  • Registered NGOs have deemed legal status and enjoy various privileges under the law having their separate existence with an ultimate aim to provide aid to the needy and opportunities for growth and a better future.
  • Sometimes, NGOs also act as a mediator between the Government bodies and citizen of India, taking up causes and issues that need to be looked upon and need to be resolved. Due to this, they have played a major role in socio-economic development of the country.
  • NGOs may either specifically choose one social cause and undertake activities related to resolution of the problem or choose more activities for the promotion of social, political and moral welfare of the society which may include-
    • Human Rights.
    • Promotion of Sports/science/research or any similar subject.
    • Women rights and empowerment.
    • Alleviation of poverty and means of employment.
    • Environment conservation.
    • Social injustice etc.

Thus, NGOs have an important role in the socio-economic development of the country by filing the gaps left by the government policies and schemes. However, in countries with huge population, there is still a large section of population, who’s social and political rights need to be considered such as education and means of employment. Thus, there is a large need of self-governing bodies like NGOs in growing India.

Forms of NGO Registration in India-

A NGO could be registered as any of the following depending upon the eligibility criteria and the convenience of the applicant/s-

  • Registration as a Trust, under Indian Trusts Act 1882.
  • Registration as a Society under Society Registration Act 1860.
  • Registration as a Section 8 Company, under Companies Act 2013.

Let’s know a little about each of them-

  • Registration as a Trust: By definition, a trust is a fiduciary relationship created between the owner of the property and a third person to whom it is given for the sole and absolute benefit of the beneficiary. Thus, a NGO could be registered as a public trust which cannot be revoked once established until and unless the same is approved by the beneficiaries of the trust.
  • Registration as a Society: Section 8 company or Non-profit organizations are the entities that are registered as a company but for charitable or social purposes and not for earning profits. Thus, such company cannot hold the profits or distribute profits among the members or promoter of the company and must invests such in the chosen purposes promotion of art & culture, promotion of religion or subjects such as science, art, commerce, sports etc. or any other cause for the socio-economic development of the society.

NGO Registration with Legalmart

The process of NGO registration is online process that is simple and hassle-free to complete, but requires application filling with precision, as not undertaking the same with care can lead to failure of application or requirement to file the form all again leading to additional time and unnecessary costs of doing it all again. Thus, for expert assistance in document preparation, form submission and getting registration certificate, please refer to Legalmart.

Benefits of NGO Registration

Provided below are the benefits of registering your entity as a NGO-

  • Avail Tax Benefits: NGO registration of an organization makes it eligible to avail various tax benefits including tax exemptions and other tax benefits for the members/directors of the NGO. Such tax benefits lead to savings in funds and hence more funds for the fulfilment of NGO’s objectives and investments for future projects.
  • No minimum share capital requirement: There is no condition regarding the minimum share capital requirement in case an NGO is being registered as a Section 8 company under the provisions of Companies Act 2013, unlike other business entities like a company or LLP. Such NGO can be either with or without share capital depending upon the decision made by the members of the NGO.
  • Structure of Body corporate: When registered as a society or a section 8 company, NGO is a legal entity holding separate legal recognition and a separate existence apart from the members. Thus, it holds a legal status and perpetual succession, it can enter contracts in its own name, could sue any person or could be sued under its own name etc.
  • Exemption from payment of stamp duty: NGO’s are exempted from the payment of stamp duty charges on the documents such as MOA & AOA under the privileges allowed to them by the Government of India.
  • Confidentiality: NGOs have been provided with exemption from adding words such as Private or Public Limited Company with just adding words like “Foundation, Forum, and organization etc. along with the name of the NGO in pursuance of the license issued by the Government of India. It helps them to maintain confidentiality without having to reveal legal status or the limited liability of the entity.
  • Transfer of shared/ownership in the company: Unlike other business entities, it is relatively easier for an NGO to permit transfer or ownership in the organization. Under the provisions of the Income-Tax Act 1961, the members of NGO can transfer their ownership interests which could be either movable or immovable in nature.
  • Credibility: Since a NGO is formed for a non-profit motive, it has to obtain an additional license from the Central Government which is subject to strict rules and regulations. Thus, an NGO enjoys better credibility as compared to any other entity.

Disadvantages of NGO Registration

  • Limited scope- Most of the NGO’s have a specific goal for their functioning and do not generally go beyond such goals. Thus, the available resources are utilized towards a specific goal which makes them inefficient and prone to malpractices and corruption in the long run.
  • Inability to distribute profits- Unlike other business entities where members are allowed a share in the profits of the company, members of a NGO cannot receive share in the profits made and can only reimburse themselves for expenses paid out of their pockets in the NGO activities.
  • Limited Resources- Usually, the functioning of NGOs is primarily dependent on the amount of charities & donations received from the Government as well as business entities. Further, Moreover, they hold limited staff who are overburdened with the pressure of functioning in different activities such as fundraising, project management operations, finance and other activities related to the organization. Thus, due to limited resources there is lack of training or expertise attained in one specific field.
  • Strict Rules & Regulations- NGOs when registered as a Section 8 company is required to obtain license from central government seeking initiation of NGO operations. Thus, whenever a NGO intends to alter its MOA & AOA, it needs to obtain permission from the central Government explaining sufficient reasons for such alterations.
  • Grounds of Cancellation- As provided before, a NGO is subject to strict rules and regulations and any failure to comply with the same can lead to cancellation of license.

Documents Required For NGO Registration

Provided below is the list of documents required for the purpose of NGO registration in India

  • A letter seeking registration of society signed by all proposed members of the society.
  • Duly prepared Memorandum of Association for the society, signed and stamped by all members in duplicate attached with a certified copy.
  • Drafted and duly prepared rules and regulations of the society duly prepared and submitted in duplicate duly signed by all proposed members.
  • An affidavit duly sworn by the President/Secretary of the society asserting relationship between the subscribers.
  • Proof of registered address of the Society and a No objection Certificate from the owner of the premises from the owner of property (in case property is taken on rent/ or on lease).
  • Details of all the members proposed along with their occupational details.
  • A Declaration duly made and signed by the proposed authorised officer of the NGO.

Online Process of NGO Registration

  • Process of NGO registration as a trust

Provided below is the process of registration of a trust-

  • As the first step of registration, the applicant needs to prepare an application and submit it to the registering authority having jurisdiction over area where the trust is proposed to be located. An application for registration of trust must include-

The application for Trust registration must include details like

  • Name of the Trust.
  • Names of  settlor of Trust and the mode of succession.
  • MOA & AOA  of the Trust.
  • Court fee on a stamp of Rs.2 and a nominal Trust registration fee, which varies from state to state.
  • Scanned and certified copy of drafted trust deed.
  • Once a trust registration application is prepared, the application must be submitted to the registration authority authorized for registration of trust in the jurisdiction of the area where trust is proposed to be located.
  • On receipt of the application, where the registrar is satisfied that all the requirements have been fulfilled for registration purposes and the documents are in order, then the Registrar may register the trust and issue a trust registration certificate which should be preserved by the trustee.

Process of NGO registration as a Society

A Society could be registered by seven or more persons who may be foreign individuals, foreign companies or any other registered society in India apart from Indian citizens as well as companies. The members shall be required to subscribe to the Memorandum of Association of the society by giving their consent to act as a member of the society and putting their signatures in the MOA.

Though, a society could be a registered or an unregistered one in being. However, registration under the Act provides it a legal status allowing various benefits such as holding properties in its own name, filling suits or legal action society in its own name, enter contracts in its own name etc.

A registered society is governed by the provisions of the Society Registration Act as applicable within each state and the provisions are administered by the concerned State/UT government. Therefore, if the applicant wishes to register the NGO as a society, such applicant needs to apply to the State Government where the NGO is proposed to be located.

Here is the step-by-step process of NGO registration as a Society-

Step 1- Selection of Name for society
For the purpose of registration of a society, it is necessary to propose a name with the consent of all the members of such society. However, the name of the proposed company should not be, such that-

  • Should not be either too similar to or identical to any existing society registered under the provisions of the Societies Registration Act 1860.
  • Should not be such to suggest any patronage with the Government of India or any State Government.
  • Should not fall as under the restrictions provided under the Emblem and Names Act, 1950.

Step 2- Preparation and signing of the Memorandum of Society

After choosing a name for the proposed society, the applicant must prepare a memorandum of association providing for the rules and regulations of the society. Once it is prepared, it should be signed by the proposed members witnessed by an Oath Commissioner, Notary Public, Gazetted Officer, Advocate, Chartered Accountant or Magistrate 1st Class by putting official stamp and complete address.

After MOA is prepared, signed and stamped, it must be submitted for society registration to the Registrar of Societies along with the following documents-

  • A Cover letter seeking registration of society signed by all proposed members of the society.
  • Duly prepared Memorandum of Association for the society, signed and stamped by all members in duplicate attached with a certified copy.
  • Drafted and duly prepared rules and regulations of the society duly prepared and submitted in duplicate duly signed by all proposed members.
  • An affidavit duly sworn by the President/Secretary of the society asserting relationship between the subscribers.
  • Proof of registered address of the Society and a No objection Certificate from the owner of the premises from the owner of property(in case property is taken on rent/ or on lease).

All these documents must be attached with the application for registration along with the prescribed fee to the Registrar of Societies. On being satisfied of the fact that all the requirements related to registration of society have been complied with, the Registrar of Societies may issue a certificate of registration.

Process of NGO registration as a Section 8 company

If the applicant wishes to register the proposed NGO as  a Section 8 company, he/she needs to log on to the MCA portal and create a user id and password for registration purposes by providing contact details like mobile number and registered email id.

  • Step 1. Application for Digital Signature Certificate (DSC)
    As a first step of registration, the applicant needs to make an application for DSC registration which will be required for affixing signatures in the incorporation form. However, the applicant also has the option to make an application later along with the incorporation form later.
  • Step 2. Apply for Reservation of Unique Name (RUN)
    Next, the applicant needs to fill the “RUN facility” form available on the MCA portal to submit at least two proposed names for the Section 8 Company to be registered and provide them protection so that no other entity could take the name of the proposed entity as their own. Also, the applicant must add words like Foundation, Federation, Academy, Association etc. along with the proposed name of the company, so as to suggest the non-profit nature of the entity.
    Once the “RUN“ application is submitted and approved, the name so proposed shall be provided protection for at least 20 days of time-period.
  • Step 3. Submit SPICe+ for Incorporation
    SPICe+ is the new form for incorporation of a company under the MCA portal that allows 10 types of applications from three Central Government Ministries/Departments at once for simplifying the process of incorporation.
    The applicant shall fill and submit Part A as well as Part B of the application along with all required attachments and documents, which includes application for-
    The new integrated web form offers the following services:–

SPICe+ Part A – Application for Reservation of Unique Name for new companies only
SPICe+ Part B- Application for various services such as-

  • Incorporation of company.
  • DIN application for directors of the company.
  • Application for PAN number of the entity.
  • Application for TAN number for the entity.
  • GST identification number of the entity application.
  • Application for PF registration.
  • Application for ESI registration.
  • Bank Account opening for the business entity.

Once both parts of the application forms are filled completely, verify all the contents once  and affix digital signatures followed by the final submission of the application.

Step 4: Get COI & apply for License from Central Government
Once the application is submitted, the Registrar of Companies will check the application and on satisfaction that all the requirements for incorporation of section 8 company have been complied with, may issue certificate of incorporation. On receiving certificate of registration from the MCA, the applicant will be required to apply for a license to operate from the central government.

Why Choose Legalmart?

We at Legalmart are a group of expert professionals coming with a vast field of expertise and years of experience. Thus, incorporation/registration of a NGO is a simple and hassle-free process if you have expert guidance related to preparation of documents and their submission as per the applicable rules and regulations. Also, as there are different ways to register an NGO, which allows various benefits based on the type of entity you prefer. Further, we offer to provide following services in case you intend to apply for NGO registration

Collection of Documents and Form Submission

We understand that it is not easy for a business owner or manager to handle every aspect of business perfectly. Further, initiation of business operation and managing it all could be overwhelming for you. Thus, our professionals will guide through the whole process, collect necessary documents, and prepare your application ready to be submitted online in a simple, quick and efficient manner.

End to End assistance from registration to receipt of certificate

Once documents are collected, our professional experts will fill and submit application on the portal online. Once the form is submitted with all necessary documents and attachments, the registration certificate will be issued after verification within such time as prescribed under rules. We also entertain customer queries 24*7 to ensure timely assistance and complete our services efficiently at reasonable prices.