The social sector in India is anchored by non-governmental organizations (NGOs). Our government neglects the weaker aspects of our economy and the poorer classes of society that these organizations support. Therefore, it is often said that NGOs do work that wealthy welfare states would do. While in India, NGOs, more commonly known as charitable organizations, rely on donations from the wealthy.
Establishing an NGO
NGOs can be registered in India under three acts: the Indian Trust Act, 1882, the Societies Registration Act, 1862, and the Companies Act, 2013. Before registering, one must, however,:
- Develop the NGO’s mission and vision. In the same way that a company needs goals and a strategy to achieve them, so does an NGO
- NGO start-up begins with forming a governing body.
Find out how to start an NGO in India by contacting our experts.
Establishing a governing body
An NGO must be governed by a governing body. In this body, the NGO’s activities and functioning are examined. Moreover, they need to consider matters such as financial management, human resources, and planning.
Fund-raising and management strategies must also be decided by the governing body. An NGO’s governing body is usually the most important aspect, since charitable organizations need well-respected individuals to run them.
Documentation for Trust Deeds
An NGO must have its own bylaws, a memorandum of association (if it is a Section 8 company) or trust deed before it can be registered, which must contain the name and address of the NGO, details of its members, rules and regulations, and administrative laws.
In India, there are three types of NGO registration, depending on how the organization operates. Non-profit organizations must comply with certain laws and regulations in order to function effectively.
Act on Indian Trusts
In India, every state has a different Trust Act, and the Indian Trust Act, 1882 governs those states without a Trust Act. Furthermore, NGOs are usually registered under this Act if they own property (for example, a school or hospital).
Registration under the Indian Trust Act, 1882, requires a trust deed containing all essential information about the trust’s financial management and fund collection.
The application process is as follows:
It is necessary for such an NGO to move an application for registration. Forms for trusts are to be filled out, court fees stamps are to be affixed, and a nominal registration fee is to be paid depending on the value of the property. The trust deed must be submitted with the application form.
The Societies Registration Act of 1862 governs the registration of societies
It is most convenient to set up an NGO through the Societies Registration Act, 1860. Organizations and societies that can be registered under the Societies Act are clearly outlined in Section 20. Additionally, an NGO can register under the Societies Act at the state or district level.
A Society under this Act must have a minimum of seven members on its managing committee. Additionally, these members will serve as president, vice president, treasurer, director, and members.
How to apply:
A society can register at the state or district level. A memorandum of association, rules and regulations, consent letter of all members along with ID proofs, and an affidavit from the president are generally required, depending on the state.
Act of 2013 on Indian companies
A company may be registered under Section 8 of the Companies Act, 2013 for the purpose of promoting commerce, art, science, religion, charity, or any other useful purpose. Dividends must not be paid to members of such an organization because profits must be used for its further development.
A charitable organization must have a minimum of three members (no upper limit) and a memorandum of association.
Process of applying
To check whether a company’s name is available, an application must be filled out. Through the Spice + form, the incorporation process is continued once the name is confirmed to be available.
A memorandum of association, as well as a declaration by an advocate, is also submitted to the company law board. In addition, the applicant must place an advertisement in two local newspapers (one in the regional language and one in English).
Aside from registration under these acts, NGOs that wish to open offices in tribal areas or locations that require special permission, or hire foreign nationals, need to obtain special licenses, such as the Shops and Establishments Act (for opening offices), inner line permits (for opening offices in tribal and restricted areas), FCRA registration and a no-objection certificate, along with work permits (for hiring foreign nationals).
Foreign nationals and international non-governmental organizations wishing to establish an office in India must obtain permission from the Reserve Bank of India and obtain a no-objection certificate from the concerned departments before being registered under any of the above-mentioned acts.
To obtain 80G certification, an NGO must submit an application along with its annual report if they would like to seek tax exemption.