NGO Registration
An NGO is a non-government organization with a charitable objective, for the betterment of the society in general. It can be started as a Trust, a Society or a Non-Profit Company [Section 8 Company], depending on the activity you wish to undertake.
In India, NGO is an umbrella term for all non-profit organizations including Trust, Society and Section 8 Company. Other names for such not-for-profit organizations are “Sangathan”, “Sangh”, “Sangam”. Income tax exemption is available for all non-profit NGOs.
These are sometimes confused with non-profitable companies, which refers to a regular business is not making a profit.
Acts governing NGO registration process
Each law defines the formation of a different type of organization, namely – Trust Registration, Society Registration, and Section 8 Company Registration. Choosing the kind of registration procedure for the charitable firm is crucial. Our experts will help select the suitable option that befits your vision and guide you with the online registration process.
Why register an NGO in India?
Benefits
- A registered NGO gains the legal status and becomes accountable for the funds received. For instance, when an individual donates funds to a charitable trust, it is received under the name of the organization and used for the trust’s activities. In an unregistered firm, the assets can be received under anyone’s name and may be used for their own profit.
- An organization that is registered as an NGO reinforces the ethical, social and legal norms of our society.
- The basic requirement for running an NGO is to have a bank account under its name. In order to open an account, it is mandatory to be registered as a Trust, Society or Section 8 Company.
- The registration of an NGO is necessary to seek tax exemption from the Income Tax Authority.
Registration of NGO in India
Trust
One of the ways in which an NGO can be registered is Trust or more commonly called Charitable trust. Trust is a legal entity created by the “trustor” or “settlor” who transfers the assets to the second party or “trustee” for the benefit of the third party or “beneficiary”. Trusts are formed to help and support the deprived sections of the society. Any group of individuals can register a trust and in India as such there are no specific laws to govern the public trust, however, some states like Maharashtra and Tamil Nadu have their own Public Trust Act.
Societies
A society is an entity that can be created by a group of individuals united in their cause for promoting science, arts, literature, social welfare and useful information. In addition, societies work for creating military orphan funds, maintaining public museum and libraries.
Societies are governed by the Societies Registration Act, 1860. They must be registered with the respective state Registrar of Societies to be eligible for tax exemption.
Section 8 Companies
A Section 8 company is similar to a trust and society. The objectives of a Section 8 Companies are to promote arts, science, commerce, sports, social welfare, religion, charity and environmental protection. They are registered under the Companies Act, 2013 for charitable purpose. They have better credibility among government bodies, donors and other stakeholders.
NGO Registration Methods in India – Trust, Society, or Non-profit Company [Section 8 Company]
A Detailed Process
In India, anybody is free to do social activities without forming an association or organization. But when an individual wants to create a group that involves volunteers, activities, and resources, it becomes important to have proper management in place. To run such companies, trusts and Societies in the correct manner, a certain set of rules need to be followed.
Essential documents for online society registration & trust registration certificate
Before a registered deed is delivered to an NGO, submission of specific documents is required.
Trust Registration
For the trust registration, the following papers are mandatory:
- A bill of electricity or water stating the address that needs to be registered.
- The identity proof of at least two members of the company. The proof can be:
- Voter ID
- Driving License
- Passport
- Aadhaar Card
Note: On the scheduled date for registration, the Author of the Trust shall be present in the Register Office for registration
Society Registration
For a society registration, the following papers are essential:
- The name of the society.
- Address proof of the office.
- Identity proof of all the nine members which can be:
- Driving License
- Copy of Passport
- Voter ID
- Aadhaar card
- Two copies of the Memorandum of Association and By-laws of the society.
Note:Once the payment for the registration is done, it takes about 8 to 10 days for drafting the MoA and By-laws of the Society. Thereafter it takes 21 to 30 days for the Society to be registered.
Section 8 Company:
For a Section 8 company registration, the following papers are essential:
- The name of the Company for approval.
- Address proof of the office. It can be electricity or water bill or house tax receipt.
- Identity proof of all the Directors which can be:
- Driving License
- Copy of Passport
- Voter ID
- Aadhaar card The Memorandum of Association and Articles of Association of the Company.
Note: Once the payment for the registration is done, it takes about 8 to 10 days for drafting the MoA and AoA of the Society. Thereafter it takes about 2 months for the entire Company registration to be completed.
| TRUST | SOCIETY | SEC – 8 COMPANY | |
|---|---|---|---|
| Governed by | Trust Act of each state | Societies Registration Act (State Law) | Companies Act, 2013 |
| Members: | Minimum of 3 members and a maximum of 21 members | Minimum of 7 members and the maximum is unlimited | Minimum of 2 Directors/Shareholders |
| Jurisdiction: | Where the registered office of the Trust is situated. Before the Sub – Registrar or the District Registrar in the particular area or the Charity Commissioner. | Where the registered office of the Society is situated. Before the District Registrar in the particular area or the Charity Commissioner. | Online Registration |
| Document: | Trust Deed | Memorandum of Association, By-Laws, Forms | MoA and AoA |
| Board: | Founder or Author of the Trust, Managing Trustees (Treasurer, Auditor, etc.) | Executive Committee (President, Secretary, Vice President, Treasurer), General Body (All members) | Directors |
| Property Management: | The properties of the Trust will be managed by the Trustees, however, the properties cannot be sold by the Trustees without obtaining the permission from the court. | The property of the Society vests in the name of the Society and the same can be sold as per the terms mentioned in the By-laws of the society. (Eg: Approval from the Executive Committee Member) | The property of the company vests in the name of the Company and the same can be sold as per the rules mentioned under the Companies Act, (Eg: With the consent of the Board of Directors in the form of a resolution) |
| Revocation/ Dissolution or Winding Up | The trust is usually irrevocable in nature. For reasons like disqualification of trustees, the absence of trustees, mismanagement of the trust, the trust can be merged with another trust having a similar objective with the permission of the court. | Dissolution as per the By-laws of the society, upon dissolution and after settlement of all debts and liabilities, the funds and property of the society may not be distributed among the members of the society, rather, the remaining funds and property must be given or transferred to some other society, preferably one with similar objects. | Dissolution as per the By-laws of the society, upon dissolution and after settlement of all debts and liabilities, the funds and property of the society may not be distributed among the members of the society, rather, the remaining funds and property must be given or transferred to some other society, preferably one with similar objects. |
| Annual Compliance | There is no annual filing but the board of trustee must keep the books and accounts proper. | Societies must file annually, with the Registrar of Societies, a list of the names, addresses and occupations of their managing committee members. | There is a requirement of annual compliance by the filing of annual accounts and the return of company with the RoC. |
Our team aims to provide the best legal consultancy services for all charitable, corporate and NGO firms across India. We maintain high ethical standards and work towards delivering every service within the promised time frame. We recommend you to give us a call or drop an email for the first free consultation. Our experts are available to serve you.
Section 8 Company FAQs:
1. How many people are required to register a Section 8 Company?
A minimum of two people is required to register a section 8 company in India.
2. What are the requirements to be a Director?
The Director needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, even foreign nationals can be Directors in an Indian Section 8 Company.
3. Is an office required for starting a Section 8 Company?
An address in India where the registered office of the Company will be situated is required. The premises can be commercial/industrial/residential where communication from the MCA will be received.
4. Do I have to be present in-person to incorporate a Section 8 Company?
No, you will not have to be present at our office or appear at any office for the registration of a Section 8 Company. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.
5. What are the documents required for registration?
Identity proof and address proof are mandatory for all the proposed Directors of the Section 8 Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.
6. How long it will take to incorporate a Company?
We can incorporate a Section 8 Company for in 20-30 days. The time taken for registration will depend on the submission of relevant documents by the client and the speed of Government Approvals. To ensure speedy registration, please choose a unique name for your Company and ensure you have all the required documents prior to starting the registration process.
7. How long is the registration of the Company valid?
Once a Company is incorporated, it will be active and in existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and may be struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.
8. What is a Digital Signature Certificate?
A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Section 8 Company.
9. What is the Director Identification Number?
Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.
10. Can NRIs /Foreign Nationals be a Director in a Section 8 Company?
Yes, a NRI or Foreign National can be a Director in a Section 8 Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be a Resident India.