Are you looking to register an NGO in India? Congratulations! You are in the correct place. Here you will get the exact step-by-step process to register your NGO in India.
In India, registering an NGO is not necessary. One can function individually or in a group for the betterment of society without getting officially registered. However, if you want effective management and access to more volunteers and resources for your NGO, it is essential to get registered. A registered NGO enjoys many privileges over an unregistered NGO.
The following are the advantages of getting an NGO registered:
- Separate legal entity – After getting registered, the NGO becomes a separate legal entity and can operate with its name; for example, acquiring assets and liabilities in its own name.
- Separate Bank Account – An enlisted NGO can have a bank account in its name. This motivates donors to donate more to the NGO as they hesitate to draw a cheque in the trustee’s name. When an NGO has a bank account, donors feel more confident in investing in it.
- Having A Registered Name – An NGO gets its name reserved by getting registered. It means any other entity within India cannot use the same name.
- Tax Exemptions – NGOs enjoy various tax exemptions under Income Tax Act 1991. For example – Donations to NGOs are tax-deductible. An unregistered NGO has to pay taxes at normal rates. Stamp Duty is also exempted for NGOs.
- No Minimum Share Capital Requirement – Unlike companies, no minimum share capital is required to register an NGO. NGOs can start operating with donations and grants received.
- No Personal Liability – NGOs act as separate entities after getting registered. Therefore, the trustee is not personally liable for any liability of the NGO.
- Access to credit facilities – Once an NGO is registered, you can get financial assistance from lenders and financial institutions using its name, which you can use to promote the organisation’s activities and objectives.
- Help in Gaining Public Confidence – Lastly, a registered organisation is more trusted than an unregistered one. It is perceived as having effective leadership; thus, more people trust and collaborate with it.
Trust, Society, or Section 8 Company?
NGOs can be registered in the following three ways –
- Section 8 Company
Trust is the oldest form of a not-for-profit organisation. A minimum of 2 members can form it. Trust is governed under the Indian Trust Act of 1882. It is easy to operate a trust as there is no statutory requirement for annual returns or document filing.
Society is a relatively new way of getting an NGO registered. To incorporate a society, seven members from one state or eight from different states come together for a mutual objective. It is governed under the Societies Registration Act of 1860. Society works more democratically and must file the list of body members yearly.
SECTION 8 COMPANY
As the name suggests, section 8 companies are incorporated as companies under the Companies Act of 2013. It can be limited by share capital or guarantee. The government issued a special license to section 8 companies to incorporate. These companies can utilise the funds to promote their objectives and cannot distribute dividends to their shareholders.
Every organisation is best at its level. There is no thumb rule to decide which Not-For-Profit Organization is better. One can choose to register as per the need and requirements.
How To Get Registered as a Trust?
- The first step is to decide the name of the trust, which is not restricted under the Emblems and Names Act of 1950.
- After deciding on the name, draft the trust deed. A trust deed is a document that contains all the information about the trust. It needs to be presented before the registrar during registration.
- Select the name of the trustee and settlor. There must be a minimum of two trustees to get registered.
- Prepare a Memorandum of Association (MOA). MOA is a charter of an organisation that defines its relationship with outsiders.
- The next step is to submit the documents and requisite fee to the registrar. Documents to be submitted are Trust Deed on Proper Stamp Value, Particulars of Trustee and Settlor, and Documentation for the trust registered address.
- Once the registrar is satisfied with the documents you have submitted, it will issue the certificate within 2 weeks.
How To Get Registered as A Society?
- The first step to getting an NGO registered as a society is to decide the society’s name. The name must be unique and non-identical.
- Design the memorandum of society and get it signed by every founding member. Also, it must be witnessed by an Oath Commissioner, notary public, gazetted officer, advocate, chartered accountant, and Magistrate I class with their official stamp.
- Then, apply to the registrar with the following documents –
- Memorandum of Society
- Address proof of the trust
- Particulars of all the members
- Name of the Society
- Once the registrar is satisfied with the documents, he will issue the Certificate of Registration.
How to Get Registered as a Section 8 Company?
- The first step is to obtain a Digital Signature Certificate which can be used for affixing the signature in digital form.
- The next step is to reserve the name of the company. This can be done through SPICE and the part A form on the Ministry of Corporate Affairs website.
- After reservation of name, download the SPICE and part B form for the incorporation process.
- Prepare and file a Memorandum of Association and Article of Association in SPICE form.
- The next step is to fill in all the details in the Agile Pro form, i.e., GST, Bank Account, etc.
- Next, the INC 9 form shall be filled, including the declaration by the subscriber and first director.
- After filing all the forms, do a pre-scrutiny check and submit the requisite fee for the incorporation of the section 8 company.
- If the registrar finds the information appropriate, he will issue a Certificate of Incorporation to the applicant company.