Non-Government Organisation (NGO)
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An Overview Icegate Registration
NGO (Non-Governmental Organisation) is a voluntary group or institution with a social mission, which operates independently from the government. Non-governmental organizations (NGOs) play a pivotal role in New Delhi's socio-economic development by addressing various social issues and advocating for change. In this blog, we will explore the legal framework governing NGOs in New Delhi, along with the registration process, to provide clarity and guidance for aspiring social entrepreneurs and activists. Establishing and operating an NGO in New Delhi involves navigating a multifaceted legal framework and adhering to specific registration procedures.
- Legal Framework for NGOs in New Delhi:
- Different Types of NGOs:
- What eligibility criteria should be for the formation of an NGO?
- Online Registration Process for NGOs:
- List of Documents Needed for NGO Registration:
- Benefits of Registration NGOs:
- Differences between trusts, societies, and Section 8 companies.
- How RegisterKaro Can Assist You in the ISP Licence Registration Process?
- Why RegisterKaro?
- Frequently Asked Questions
Non-government-organisation
Legal Framework for NGOs in New Delhi:
NGOs may operate under various legal structures, including trusts, societies, and Section 8 of the Companies Act. Each structure has its own set of regulations and requirements, governed primarily by:
Indian Trusts Act, 1882: It regulates the formation and administration of public trusts.
Societies Registration Act, 1860: It governs the registration and functioning of societies engaged in charitable activities.
Companies Act, 2013: It provides for the establishment of it under Section 8 companies, primarily for promoting charitable objectives.
Different Types of NGOs:
There are different compositions of NGOs as below:
1. Trust: Trust should be a public charitable trust. However, a written instrument of trust can be signed by the author and registered. A public trust is governed under Indian Trusts Act, 1882 whether relating to movable or immovable property, may be created by mere delivery of possession with a direction that the property is to be held under trust.
2. Society : Society is governed under Section 20 of the Societies Registration Actwhich described as charitable societies and societies established for the promotion of science, literature of the fine arts may be registered under that Act. A society registered under the said Act becomes a legal entity apart from its members. As per the provision prescribed under section 6 of the said Act, it can sue or be sued in the name of its President, Chairman, Secretary, or members of the governing body or Trustees.
3. Company : If the Central Government is satisfied that it is about to be formed as a limited company for promoting commerce, science, religion, charity, or any other useful object and it intends to apply its profits, if any, or other income in promoting its objects and to prohibit the payment of any dividend to its members. The provision for registration of any association is given under Section 25 of the Companies Act, 1956. In such cases, the Central Government may by license direct that the association may registered as a company with limited liability without the addition to its name of the word “Limited” or the words “Private Limited”.
What eligibility criteria should be for the formation of an NGO?
To establish an NGO, prospective founders must adhere to specific eligibility criteria. These prerequisites vary depending on the chosen legal structure:
Directors and Members:
1. A minimum of 2 directors is mandatory for incorporation as a private limited company under the Companies Act. However, the maximum number of members permitted is 200 for such entities.
2. Charitable Trusts necessitate a minimum of 7 members for registration.
3. If opting for incorporation as a public limited company, a minimum of 3 directors is required.
4. There is no upper limit on the number of members for this structure.
5. NGOs can opt to register under Section 8 of the Companies Act, 2013, with the Registrar of Companies (ROC). This provision is specifically designed for non-profit organizations.
6. Registering an NGO under the Companies Act offers several advantages, including legal recognition and various benefits. Understanding these benefits is crucial for prospective founders to make informed decisions regarding the structure and registration process of their organization.
Online Registration Process for NGOs:
The registration process for NGOs in New Delhi typically involves the following steps:
Step 1.Selection of Legal Structure:
Determine the most suitable legal structure for your NGO based on factors including size, scope, and objectives.
Step 2. Reservation of the Name:
Select a unique and meaningful name for your NGO and ensure its availability for registration.
Step 3: Preparation of the Memorandum and Articles of Association:
MAO and AOA draft the governing documents outlining the objectives, rules, and regulations of the NGO.
Step 4: Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN):
Obtain DSC and DIN for the proposed directors if registering as a Section 8 company.
Step 5: Apply for Registration:
Apply for registration along with the required documents to the respective regulatory authority.
Step 6: Review and Approval:
The regulatory authority reviews the application and documents submitted. If authority is satisfied and all compliances are met, registration will be granted.
Step 7: Certificate of Registration:
Once the registration process is completed successfully, the NGO receives a Certificate of Registration, validating its legal existence.
Step 8: Tax Registration:
To avail of tax benefits NGOs may proceed to register for tax exemptions under sections 12A, 80G, and 35AC of the Income Tax Act, 1961.
List of Documents Needed for NGO Registration:
Here is a list of documents essential for different types of NGO registration.
1. Documents Required for Trust Registration:
1. Electricity or water bill of registered office as address proof.
2.Identity proof (Voter ID, Driving Licence, Passport, Aadhaar Card) of at least two members of the company.
2. Documents Required for Societies Registration:
1.Name of the Society.
2.Identity proof of all members (Driving Licence, Copy of Passport, Voter ID, Aadhaar card)
3.Address proof of the registered office.
4.2 copies of the Memorandum of Association (MoA) and By-laws of the society.
3. Documents Required for Section 8 Company Registration:
1. Identity proof of all the Directors (Driving Licence, copy of Passport, Voter ID, Aadhaar card).
2.Address proof (electricity or water bill or house tax receipt) of the registered office.
3.Name of the Company for approval.
4.Memorandum of Association (MoA) and Articles of Association (AoA) of the Company..
Benefits of Registration NGOs:
They can experiment freely with innovative approaches and, if necessary, to take risks.
1. They are flexible in adapting to local situations and responding to local needs and therefore able to develop integrated projects, as well as sectoral projects.
2.They enjoy a good rapport with people and can render micro-assistance to underprivileged people as they can identify the most in need and tailor assistance to their needs.
3.They can communicate at all levels, from the neighbourhood to the top levels of government.
4.They can recruit both experts and highly motivated staff with fewer restrictions than the government.
5.Other advantages include Tax benefits, Personal liability protection, No Minimum capital requirement, ownership transfer, the right to acquire assets, credit acceptance, and legal protection.
Differences between trusts, societies, and Section 8 companies.
| Trusts | Societies | Section 8 companies |
|---|---|---|
| Trusts are governed by the Indian Trusts Act and involve a trustee managing assets for the benefit of beneficiaries | Societies are registered under the Societies Registration Act and are managed by a governing body. | Section 8 companies are registered under the Companies Act and are incorporated for promoting charitable objectives |
| The owner of the property/assets called the ‘author of the trust’,entitles its ‘trustee’ to hold his property/assets for the benefit of other authors and beneficiaries. | A society is the simplest form of a Non-Governmental Organization in New Delhi and can be registered to operate on state level or national level for educational, charitable, religious, and social welfare purposes or the promotion of art, music, culture, science, literature, and political education. | All the income, donations, and grants that are earned by a Section 8 Company, must be completely spent on the promotion of the prescribed objects only. |
How RegisterKaro Can Assist You in the ISP Licence Registration Process?
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FAQs
What are the eligibility criteria for registering an NGO?
Mainly, NGOs must primarily engage in charitable activities for the public good. Eligibility criteria vary based on the chosen legal structure.
Can foreign nationals establish NGOs in India?
Yes, foreign nationals can establish NGOs in India, subject to compliance with Foreign Contribution (Regulation) Act (FCRA) regulations.
What are the tax benefits available to registered NGOs?
Registered NGOs are eligible for tax exemptions under sections 12A, 80G, and 35AC of the Income Tax Act, 1961, for donations received and income generated.
What are the documents required for NGO registration?
Documents typically include identity and address proofs of founders, Memorandum and Articles of Association, and proof of registered office address.
How long does it take to register an NGO in India?
The registration process may take anywhere from a few weeks to a few months, depending on the chosen legal structure and the efficiency of the regulatory authority
Can an NGO be registered for specific purposes or activities?
Yes, NGOs can be registered for specific purposes or activities aligned with their charitable objectives, as outlined in the governing documents
Are there any compliance requirements post-registration?
Yes, registered NGOs must comply with statutory filing requirements, maintain proper accounts and records, and adhere to regulations under FCRA, if applicable.
Can an NGO change its legal structure after registration?
Yes, subject to compliance with legal requirements and obtaining necessary approvals, NGOs can change their legal structure through a process of conversion or re-registratio