A non-government organization (NGO), is a charitable organization that is created for the betterment of society. An NGO can be created as a Trust/Society/Non-profit company [Section 8 Company]. This completely depends on the charitable activity an individual wishes to undertake. In our country, NGO is an umbrella term that is used for all non-profit organizations such as Trust, Society, Section 8 Company, Sangathan, Sangh, Sangam etc. All such organizations are exempted from paying income tax. Our team at ACE ALLIANCE will help you select the right option and guide you through the entire NGO registration process.
ACTS THAT GOVERN NGO REGISTRATION PROCESS
There are different laws for Trust Registration, Society Registration, and Section 8 Company Registration. An individual must choose the right kind of registration procedure for the intended charitable organization. Our team of experts at ACE ALLIANCE will help you choose the best option that suits your vision. They will guide you throughout the whole online registration process
BENEFITS OF REGISTERING AN NGO IN INDIA
- When an NGO is registered, it becomes a legal entity. The NGO then becomes accountable for the funds it receives. For example, when an individual donates funds to an NGO, the funds are received under the name of the organization. These funds are then for the NGO’s activities. In an unregistered NGO, the assets may be received under anyone’s name and misused for the individual’s own profit.
- A registered NGO gains more respect and acceptance in society.
- The only requirement to run an NGO is to have a bank account under its name. In order to open an account, it is compulsory that the NGO be registered as a Trust, Society or Section 8 Company.
- The registration of an NGO is essential to seek tax exemption from the Income Tax Authority.
REGISTRATION OF NGO IN INDIA
- TRUST: One of the ways to register an NGO is as a charitable trust. A trust is a legal entity which is 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”. A Trust is always formed to support the marginalized sections of society. Any group of individuals can register a trust in India. 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 formed by a group of individuals united in their vision to promote science, the fine arts, literature, social welfare etc. A society also works for the creation of military orphan funds, to maintain public museums and libraries. A society is governed by the Societies Registration Act, 1860. It has to be registered with the respective state Registrar of Societies to be eligible for tax exemption
- SECTION 8 COMPANIES: A Section 8 company is similar in structure to a trust and society. The objective of a Section 8 Company is to promote the fine arts, science, commerce, sports, social welfare, religion, charity and environmental protection activities. A Section 8 company is registered under the Companies Act, 2013 for charitable purpose. It has good credibility amongst government bodies, donors and other stakeholders
NGO REGISTRATION METHODS IN INDIA FOR TRUST, SOCIETY AND SECTION 8 COMPANY
In India, any citizen is allowed to do social welfare activities without having to form an association/organization. However, when a person wants to create a group that will have volunteers, partake in activities, and have resources, it becomes important to have a proper management in place. To run such a company, one should create a Trust or Society. The regulations to do that are mentioned below:
- One has to collate the important documents for online society registration & trust registration
- Before a registered deed is delivered to any NGO, all the specific documents have to be submitted to the registering authority
The following papers are mandatory to register a trust
- The electricity or water bill for address proof
- The identity proof documents of at least two members of the company. One can present the Voter ID, Driving License, Passport and Aadhaar Card for registration purposes
Once the payment for a Trust registration is done, it takes around 8 to 10 days for the online registration to be completed under the Indian Trust Act – 1882. Before the deed is considered valid throughout India, the settler has to deliver a presentation at the registrar’s office. On the scheduled date for registration, the Author of the Trust has to be present in the Register Office for registration
The following papers are needed for a society registration
- The name of the society.
- The address proof of the society office
- The identity proof of all the nine members of the society such as mentioned below:
- Driving License
- Copy of Passport
- Voter ID
- Aadhaar card
- Two copies of the Memorandum of Association and By-laws of the society.
Once the payment for the society registration is completed, it takes around 8 to 10 days to drafting the MOA and by-laws of the Society. After that it usually takes around 21 to 30 days for the said society’s registration to be completed.
SECTION 8 COMPANY:
For a Section 8 company registration, the following papers are needed:
- The name of the Company for approval
- Address proof of the office. It can be electricity or water bill or house tax receipt
- The Memorandum of Association and Articles of Association of the Company
- Identity proof of all the Directors which can be:
- A copy of the Driving License
- A copy of the Passport
- A copy of the voter ID
- A copy of the Aadhaar card
Once the payment for the registration is complete, it takes around 8 to 10 days to draft the MOA and AOA of the Section 8 company. Post which, it takes about 2 months for the entire 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, the maximum is unlimited||Minimum of 2 Directors/Shareholders|
|Jurisdiction:||Where the registered office of the Trust is located. It has to done before the Sub – Registrar or the District Registrar in the particular area or the Charity Commissioner.||Where the registered office of the Society is located. It has to be done before the District Registrar in the particular area or the Charity Commissioner.||Online Registration|
|Document:||The Trust Deed||The Memorandum of Association, By-Laws, Forms||The Memorandum of Association and Articles of Association|
|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 Trust properties cannot be sold by the Trustees without getting 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. For example, with the consent from the Executive Committee Member.||The property of the company vests in the name of the Section 8 Company. The same can be sold as per the rules mentioned under the Companies Act. For example, with the consent of the Board of Directors in the form of a resolution.|
|Revocation/ Dissolution or Winding Up||The trust is irrevocable in nature. For reasons such as the disqualification of trustees, the absence of trustees, mismanagement of the trust, the said trust can be merged with another trust which has a similar objective, after obtaining permission of the court.||Dissolution as per the By-laws of the society. After dissolution and settlement of all debts and liabilities, the funds and property of the society cannot be distributed among the members of the society. Rather, the remaining funds and property have to 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 have to be given or transferred to some other society, preferably one with similar objectives.|
|Annual Compliance||There is no annual filing but the board of trustee has to maintain the books and accounts in the proper manner.||A Society has to file annually with the Registrar of Societies with the list of the names, addresses and occupations of the managing committee members.||There is a mandatory requirement of annual compliance to file annual accounts and returns of company with the Registrar of Companies.|
Once you get in touch with us at ACE ALLIANCE with your request to create an NGO agreement, we will start the process. After our team receives all the details, our expert team of lawyers and attorney will create the NGO agreement sample and send it across for your reference within 2- 3 business days. The price you pay for these services will includes three rounds of iterations. Therefore, if you need any changes done to the NGO agreement format, our team of lawyers at ACE ALLIANCE will do the needful.