In India, there are three primary methods for NGO registration, each with its own distinct legal structure and requirements. These methods are:
- Trust Registration:
- Trust registration is governed by the Indian Trusts Act, of 1882.
- A Trust is formed by executing a Trust Deed that outlines the objectives, rules, and regulations of the Trust.
- It must have at least two trustees, who act as custodians of the Trust's assets and carry out its activities.
- Trusts are commonly used for charitable and philanthropic activities and may be set up for a specific cause or purpose.
- Society Registration:
- Society registration is governed by the Societies Registration Act, of 1860 (subject to State Amendments).
- A Society is established by preparing a Memorandum of Association (MOA) and Rules & Regulations.
- It must have a governing body or committee to manage its affairs and operations.
- Societies are well-suited for organizations with cultural, educational, charitable, or literary objectives.
- Section 8 Company Registration:
- Section 8 Company registration is governed by the Companies Act, 2013.
- A Section 8 Company is formed to promote art, science, education, sports, charity, or social welfare activities without any intention of profit distribution.
- It must obtain a license from the Central Government to use the words "Section 8" in its name.
- Profits earned by a Section 8 Company are reinvested for the organization's objectives.
Each method of registration has its own benefits and considerations. NGOs must carefully choose the most suitable method based on their objectives, scale of operations, long-term vision, and compliance requirements. Properly registering the NGO ensures legal recognition, credibility, and access to various benefits and opportunities in pursuing its mission to create a positive social impact.
Different Laws Governing NGO Registration in India under Different Methods
In India, the registration of NGOs under different methods is governed by specific laws. Here's an overview of the laws that apply to NGO registration under each method:
- Trust Registration:
- Governing Law: Indian Trusts Act, 1882
- Key Features: Trust registration involves creating a Trust Deed that outlines the objectives, rules, and regulations of the Trust. It must have at least two trustees responsible for managing the Trust's assets and activities. Trusts are commonly used for charitable, religious, and philanthropic purposes.
- Society Registration:
- Governing Law: Societies Registration Act, 1860 (subject to State Amendments)
- Key Features: To register as a Society, the organization needs to prepare a Memorandum of Association (MOA) and Rules & Regulations. Societies often focus on cultural, educational, charitable, literary, or social welfare activities. They are managed by a governing body or committee.
- Section 8 Company Registration:
- Governing Law: Companies Act, 2013
- Key Features: A Section 8 Company is formed for promoting art, science, education, sports, charity, or social welfare activities. Unlike other companies, it prohibits the distribution of profits among its members. It requires a license from the Central Government to use the words "Section 8" in its name.
Each method of NGO registration has its own set of rules, procedures, and compliance requirements as defined by the respective laws. It is essential for NGOs to understand these legal provisions and adhere to them while registering and operating as per the chosen method. Additionally, NGOs must comply with other applicable laws, such as tax regulations, foreign contribution regulations (FCRA), labor laws, and other sector-specific regulations based on their activities and objectives.
By following the relevant laws and procedures, NGOs can ensure their legal recognition, credibility, and eligibility for various benefits, including tax exemptions and access to funding opportunities, as they work toward their social, environmental, and humanitarian missions in India.
What are the Special Benefits, if an NGO is registered as a Section 8 Company?
If an NGO is registered as a Section 8 Company under the Companies Act, 2013 in India, it can avail itself of several special benefits due to its unique legal structure and objectives. Here are some of the special benefits enjoyed by Section 8 Companies:
- No Minimum Capital Requirement: Unlike other types of companies, Section 8 Companies do not have a minimum capital requirement for incorporation. This allows NGOs to register without the need for substantial initial capital investment.
- Tax Exemptions: Section 8 Companies are eligible for various tax exemptions, including income tax exemptions under Sections 10(23C) and 11 of the Income Tax Act, 1961. This means that the income and profits earned by the NGO are exempt from income tax.
- 80G Certificate for Donors: Donations made to Section 8 Companies are eligible for tax deductions under Section 80G of the Income Tax Act. This incentive encourages more donors to contribute to the NGO's cause.
- Foreign Contribution Regulation Act (FCRA) Registration: Section 8 Companies can easily obtain FCRA registration, allowing them to receive foreign contributions and grants for their projects and activities.
- No Stamp Duty on Memorandum and Articles of Association: Section 8 Companies are exempt from paying stamp duty on the Memorandum of Association and Articles of Association, reducing the registration costs.
- Name Reservation without Additional Fee: Section 8 Companies can reserve their desired name with the Registrar of Companies (RoC) without any additional fee, making it easier to secure a unique name for branding and recognition.
- Limited Liability: Like other companies, Section 8 Companies provide limited liability protection to their members, ensuring that personal assets are not at risk in case of any legal liabilities.
- Flexibility in Objectives: Section 8 Companies have the flexibility to pursue a wide range of charitable and social welfare objectives. This enables them to adapt to changing needs and address diverse social issues.
- Prestige and Credibility: Being registered as a Section 8 Company lends credibility and prestige to the NGO. It enhances the NGO's reputation and makes it more appealing to donors, partners, and other stakeholders.
- Government Grants and Support: Section 8 Companies are often given priority for government grants, financial aid, and collaborations due to their recognized status and focus on social welfare activities.
These special benefits make Section 8 Company registration an attractive option for NGOs looking to operate in a structured and legally recognized manner while enjoying financial advantages and credibility to support their social impact initiatives.
How Vakilkaro Helps to Register an NGO?
Vakilkaro provides comprehensive assistance and expert guidance throughout the process of registering an NGO in India. Here's how Vakilkaro helps you with NGO registration:
- Consultation and Planning: Vakilkaro starts by understanding your NGO's objectives, mission, and vision. They provide personalized consultation to help you select the most suitable legal structure (Trust, Society, or Section 8 Company) based on your organization's goals and activities.
- Document Preparation: Vakilkaro's team of legal experts assists in preparing all the necessary documents required for NGO registration, including the Memorandum of Association (MOA), Articles of Association (AOA), Trust Deed, Rules and Regulations, and other relevant paperwork.
- Name Search and Reservation: Vakilkaro conducts a name search to ensure that your chosen NGO name is unique and not already in use. If needed, they reserve the name of your NGO to prevent others from using it.
- Online Application Filing: Vakilkaro handles the entire online application filing process with the appropriate authorities, such as the Registrar of Societies or Registrar of Companies (RoC), ensuring accurate and timely submission.
- Legal Compliance: Vakilkaro ensures that all the legal formalities and compliance requirements are met during the registration process. They help with notarization, attestation, and submission of the necessary documents to comply with the law.
- Tax Exemptions: Vakilkaro assists in obtaining 12A and 80G certificates for tax exemptions, making your NGO eligible for tax benefits, which can attract more donors and funding opportunities.
- Updates and Progress Tracking: Throughout the registration process, Vakilkaro keeps you informed about the status of your application and provides regular updates on any developments or requirements.
- Final Registration: Once your NGO's registration is approved, Vakilkaro ensures that you receive the Certificate of Registration and any other necessary documents, confirming your NGO's legal recognition.
With Vakilkaro's professional support, you can navigate the complexities of NGO registration in India with ease, ensuring a smooth and efficient process. This allows you to focus on your NGO's core mission of creating a positive impact and contributing to the betterment of society.
Read More: