NGO Registration

NGOs, or non-governmental organizations, are nonprofit corporations founded to aid the disadvantaged segment of society. It aims to advance a variety of concerns, including social, cultural, legal, environmental, artistic, and scientific ones. They are run by residents on voluntary initiatives, as their name implies, and neither the federal government nor the state governments are involved.

 

Registration of NGO is Required

If you want to start a nonprofit organization and work with the goal of advancing a specific group within society, it is advised that you complete the NGO Registration process. Obtaining NGO registration gives the organization legal legitimacy and increases its appeal to donors and the legal system.

In India one can go for NGO registration in three legally possible ways;

The 3 NGO registrations in india

NGO Registration Procedure in India

 

Registering Societies

A society is created primarily to further science, the arts, and trade. The society engages in only non-commercial activities. Therefore, society’s actions are carried out for charitable reasons. The Societies Registration Act of 1860 governs societies.

If you want to register an NGO under the guise of a society, you must do the following basic steps:

STEP 1: Select an appropriate name for your non-profit organization.

STEP 2: The second step involves the state government’s reservations about registering NGOs as societies. To the Registrar of the Societies of the State Government, you must provide all required documentation in two copies.

STEP 3: Following examination of all of your submitted documents, the Incorporation Certificate and an NGO Registration Number will be issued.

STEP 4: The process of allotment Incorporation Certificate generally takes about a month to complete.

 

Trusts Registration

Trusts are divided into Private Limited Trusts and Public Limited Trusts:

Private Limited Trusts: Private Limited Trusts are formed for conducting activities for individuals, families, or close ones. This can include close individuals who form the beneficiaries of private trust. The Trusts Act, 1882, governs private limited trusts.

Public Limited Trusts: Public limited trusts are typically formed where the beneficiaries include the public at large. Usually, public trust will be established for charitable, educational, and religious purposes. In India, the most common public trusts are charitable and religious trusts.

As per Indian trust Act following are the minimum requirement as a Trust in India:

  • Clarity as to for what purpose it is created
  • Intention to create a Trust
  • Clear definition of the beneficiary
  • Trust property assigned by the assignee

Once all the above-required pre-requisites are met with you can proceed by following these basic steps;

STEP 1: Draft the Trust Deed

STEP 2: Choose an appropriate name for your NGO

STEP 3: Determine the settler, minimum 2 trustees, and a clear definition of who will be the beneficiary.

STEP 4: Prepare the MOA and by-laws and execute a proper trust deed containing all the key provisions and clauses.

STEP 5: The Trust Deed must be executed on stamp paper of sufficient value based on the value of the property assigned to the Trust.

STEP 6: Finally, the Trust Deed must be signed by all the trustees and settlor and registered with the Local Registrar of the area in which the registered office of the NGO is located.

Company registration under Section 8

Section 8 of the Companies Act permits private limited companies. These businesses, however, are unable to operate for profit. The promotion of education, crafts, science, the arts, sustainability development, and environmental activities are the goals of the businesses created under this. No dividends of any kind may be declared by these businesses. All profits made by this business must be invested back into it for future growth.

There are additional processes that must be completed if you intend to register an NGO as a Section 8 Company. In the case of a Section 8 Company, the following actions are necessary:

STEP 1: Pick a suitable name for your non-profit organization, making sure it is distinct from any previously existing Limited Liability Partnerships or registered businesses. This proposed name has to be submitted for a reservation using the MCA portal’s Reserve Unique Name feature. A maximum of two names may be submitted at once.

STEP 2: The MOA and AOA of the organization, as well as other needed documents like a projected profit and loss statement, a statement of assets and liabilities, a brief description of the activity, etc., must be prepared once the name of the company has been approved.

STEP 3: Submit the application for incorporation in the SPICe Form with the necessary documents attached.

STEP 4: Following thorough application verification, a Certificate of Incorporation (COI) and License will be issued.

The Choice of Model for NGO Registration: Influencing Factors

Many excellent people are becoming aware of the importance of helping the poor and other deserving social concerns in modern society. A significant portion of society is involved in social causes and aims to establish nonprofit organizations in an effort to aid them.

The first important choice among several throughout the NGO registration procedure is selecting the sort of model from among trust, society, and Section 8 Company. There are many possibilities available, as we have just covered, therefore one must reduce their decision. There are numerous elements that affect this decision, which we shall briefly go over here.

The following elements are crucial when choosing an NGO’s legal status:

 

  • What are you oriented towards?: One must explicitly state the organization’s mission or vision, aside from the fact that NGO work is done for humanitarian purposes. The decision was also affected by the vision.
  • Efficacy of Operation: The proposed organization’s operational level will be another important consideration. A crucial factor to take into account is the operation’s size. Therefore, it must be determined in advance if the operational area will be regional, state-level, national, etc.
  • Structure of the business: Before starting the NGO registration process, the organization’s structure is also defined. A Section 8 Company is a superior alternative from a societal standpoint if the donors are different from the real management, and vice versa.
  • Compliance Conditions: Before making a final choice regarding an NGO, one must take into account all of the compliance criteria for various sorts of setups. Trust and Society are subject to the same yearly compliance obligations under the Companies Act of 2013 as apply to Section 8 Companies.
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