NGO (Non-Governmental Organization) Registration

What is an NGO in India?

An NGO (Non-Governmental Organization) is a non-profit organization that works towards social, environmental, cultural, and humanitarian causes without being influenced or controlled by the government. NGOs in India play a crucial role in addressing various societal issues, such as poverty alleviation, education, healthcare, women's empowerment, child welfare, and environmental protection. They operate in a variety of sectors and are often involved in advocacy, community development, and implementing welfare programs.

In India, NGOs can be registered as a Trust, Society, or a Section 8 Company (under the Companies Act, 2013). These registrations enable the NGO to legally operate, receive funding, and avail tax benefits under Section 12A and 80G of the Income Tax Act, 1961.

Types of NGO Registration

NGOs can be registered under various legal frameworks in India, including:

1)     Trust Registration:

o    Governed by the Indian Trusts Act, 1882.

o    Suitable for charitable and religious purposes.

2)    Society Registration:

o    Governed by the Societies Registration Act, 1860.

o    Ideal for promoting art, culture, education, and social welfare.

3)    Section 8 Company Registration:

o    Governed by the Companies Act, 2013.

o    Best for organizations with a specific charitable or non-profit agenda.

Legal Provisions Governing NGO Registration

Ø  Indian Trusts Act, 1882: Regulates trusts and their formation.

Ø  Societies Registration Act, 1860: Governs societies formed for charitable or social purposes.

Ø  Companies Act, 2013 (Section 8): Governs non-profit companies.

Ø  Foreign Contribution Regulation Act (FCRA): Regulates foreign funding received by NGOs.

Compliance with these provisions is crucial for the smooth functioning of the organization.

Benefits of Registering an NGO

1. As a Trust:

• Legal Status: A Trust is a legally recognized entity that can own property and enter into contracts.
• Tax Benefits: Trusts can avail themselves of tax exemptions under Sections 11 and 12 of the Income Tax Act, provided they are registered under 12A and 80G.
• Simple Structure: Trusts have a simpler governance structure with fewer formalities compared to societies or Section 8 companies.

2. As a Society:

• Legal Framework: Societies are governed by the Societies Registration Act, 1860, which provides a clear framework for registration and operation.
• Public Trust: Societies are often viewed as credible organizations, which helps in building trust with donors, volunteers, and partners.
• Tax Exemption: Societies can also avail tax exemptions under Sections 11 and 80G of the Income Tax Act, provided they fulfill the conditions for charitable organizations.

3. As a Section 8 Company:

• Non-Profit Status: A Section 8 Company is established for charitable purposes and cannot distribute profits to its members.
• Greater Credibility: Registration as a Section 8 company provides more credibility and legitimacy, especially when dealing with larger grants, donations, and international funding.
• Tax Exemption: Section 8 Companies are eligible for tax exemptions under Sections 12A and 80G, which enables donors to claim tax benefits.
• Perpetual Existence: Unlike trusts and societies, a Section 8 company has a perpetual existence, meaning it continues to exist even if the members or directors change.

Eligibility Criteria for Registering as an NGO

To register an NGO in India, certain eligibility criteria need to be fulfilled, which differ depending on the type of registration chosen (Trust, Society, or Section 8 Company).

1. For a Trust :

• The organization must have at least two trustees, who are willing to take responsibility for the NGO's activities.
• The objectives of the Trust must be for charitable purposes such as relief of poverty, education, health, religion, and other socially beneficial goals.
• The Trust should have a trust deed outlining its mission, objectives, and governance structure.

2. For a Society :

• A Society must have at least seven members to form the governing body.
• The Society must operate with objectives for the promotion of science, literature, education, or for charitable purposes.
• The members must be Indian citizens, and the Society must adhere to the Societies Registration Act, 1860.

3. For a Section 8 Company :

• A Section 8 company must have at least two members and can be formed for promoting art, commerce, education, religion, charity, environment protection, and similar objectives.
• The company must be a non-profit entity, and its profits, if any, must be used solely for the promotion of its objectives and not distributed to members or directors.
• It must comply with the provisions of the Companies Act, 2013.

Documents Required for NGO Registration

The following documents are generally required for registering an NGO:

1. For Trust Registration :

• Trust Deed: The primary document that defines the objectives, rules, and regulations of the Trust.
• Identity Proof of Trustees: Passport, Aadhar card, voter ID, etc.
• Address Proof of the Trust: Utility bill, lease agreement, or property ownership documents.
• PAN Card: For the Trust and its trustees.
• Photographs of Trustees: Passport-sized photographs.
• MOA (Memorandum of Association): If applicable, depending on the Trust's nature.

2. For Society Registration :

• Memorandum of Association (MOA): The charter document stating the objectives and purpose of the society.
• Rules and Regulations of the Society: The internal operational rules and regulations.
• Identity Proof of the Governing Members: PAN, Aadhar, passport, or voter ID.
• Address Proof of the Society: Lease agreement, property documents, or utility bill.
• List of Members: Names, addresses, and contact information of the founding members.

3. For Section 8 Company Registration :

• Memorandum of Association (MOA) and Articles of Association (AOA): These are the fundamental documents of the company outlining its objectives and governance structure.
• Identity Proof of Directors: PAN, Aadhar, passport, etc.
• Address Proof of the Company: Utility bill, lease agreement, or property ownership documents.
• Photographs of Directors: Passport-sized photos of the directors.
• Digital Signature Certificate (DSC): For online filing of the company registration application.
• Director Identification Number (DIN): For all directors of the company.

NGO Registration Process

The registration process for each type of NGO (Trust, Society, or Section 8 Company) involves specific steps. Below is an overview of the general process for each.

1. Trust Registration :

• Step 1: Draft the Trust Deed with details of the objectives, rules, and governance structure.
• Step 2: Choose a name for the Trust and ensure it is unique.
• Step 3: Submit the signed Trust Deed along with the necessary documents to the local Registrar of Trusts or Charity Commissioner in the state.
• Step 4: After verification, the Trust will be registered, and a Registration Certificate will be issued.

2. Society Registration :

• Step 1: Gather a minimum of seven members and decide on the name of the Society.
• Step 2: Draft the Memorandum of Association (MOA) and Rules & Regulations.
• Step 3: Submit the registration application along with the documents to the Registrar of Societies in the respective state.
• Step 4: Upon verification, the Society is registered, and a Registration Certificate is issued.

3. Section 8 Company Registration :

• Step 1: Choose a unique name for the company.
• Step 2: Draft the Memorandum of Association (MOA) and Articles of Association (AOA).
• Step 3: Apply for a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the directors.
• Step 4: File the application with the Ministry of Corporate Affairs (MCA) along with the required documents.
• Step 5: The MCA will review the application and, if approved, grant a license for the Section 8 company.
• Step 6: The company is registered under the Companies Act, 2013.

Post-registration Compliance

Once your NGO is registered, it is essential to adhere to ongoing compliance requirements to maintain its legal standing and credibility. These include:

§  Obtaining 12A and 80G Certifications:

-       Submit applications to the Income Tax Department to secure tax exemptions for the NGO and tax benefits for donors.

-       Ensure compliance with the conditions set by the Income Tax Act for continued eligibility.

§  FCRA Registration:

-       Necessary for receiving and utilizing foreign contributions.

-       Submit Form FC-3A for prior approval or registration as per the Foreign Contribution Regulation Act, 2010.

§  Annual Returns:

-       File annual returns (Form ITR-7) with the Income Tax Department.

-       Societies must file returns with the Registrar of Societies; Section 8 Companies must comply with MCA filing norms.

§  Audited Financial Statements:

-       Prepare and submit audited financial statements, including a balance sheet, income statement, and receipts and payments account.

-       Engage a certified auditor for compliance.

§  Periodic Renewals:

-       Renew registrations like 12A, 80G, or FCRA, where applicable, before their expiry to ensure continuity of benefits.

§  Reports and Updates:

-       Submit activity reports to stakeholders, donors, and regulatory bodies.

-       Maintain updated records of all charitable activities and expenditures for transparency.

Penalties for Non-Compliance

Failure to comply with NGO registration and related legal requirements can result in significant penalties, including:

·         Fines for Non-Registration: Operating an unregistered NGO can attract fines ranging from ₹10,000 to ₹1,00,000, depending on state and regulatory norms.

·         Loss of Tax Benefits: Without 12A or 80G registration, NGOs are ineligible for tax exemptions and donor benefits.

·         Suspension of Operations: Persistent non-compliance may result in suspension or closure of the NGO by regulatory authorities.

·         Foreign Contribution Penalties: NGOs without FCRA registration receiving foreign funds may face penalties up to five times the amount received.

·         Legal Proceedings: Non-compliance with statutory requirements can lead to litigation and reputational damage.

FAQs

1.       What is an NGO?

·         An NGO (Non-Governmental Organization) is a non-profit, voluntary organization that works towards societal development and welfare. It is typically involved in areas such as education, health, social justice, environment, and human rights.

2.      What are the types of NGO registrations in India?

·         NGOs in India can be registered under various laws, such as:

-       Societies Registration Act, 1860

-       Indian Trusts Act, 1882

-       Companies Act, 2013 (Section 8, Non-profit Company) Each type has different compliance requirements and structures.

3.      What is the minimum number of members required to register an NGO?

-       For Society registration, a minimum of 7 members is required.

-       For a Trust, a minimum of 2 trustees is required.

-       For a Section 8 company, a minimum of 2 members is required.

4.      How long does it take to register an NGO in India?

·         The registration process may take from 1 month to 6 months depending on the type of registration and the efficiency of the relevant authorities.

5.      Can an NGO operate without registration in India?

·         While an NGO can start its activities without formal registration, it cannot legally operate as a non-profit entity or receive tax exemptions without being registered. Registration is essential for availing government grants and certain tax benefits.

6.      Is it mandatory to have a permanent office address for registration?

·         Yes, it is necessary to have a permanent office address in India for the registration process. The address will be used for correspondence and other official purposes.

7.      Can an NGO be registered in a state other than where its activities are carried out?

·         Yes, an NGO can be registered in any state in India, but it must follow the legal requirements of that particular state or national laws.

8.      What are the tax benefits for registered NGOs in India?

·         Registered NGOs may be eligible for tax exemptions under Section 80G and 12A of the Income Tax Act, 1961, if they comply with the prescribed regulations. These exemptions enable donors to claim tax deductions on their contributions to the NGO.

9.      Can a foreign national be a member or trustee of an NGO in India?

·         Yes, foreign nationals can be members or trustees of an NGO in India, but there are certain restrictions on the flow of foreign funds. If you are planning to accept foreign contributions, you need to register under the Foreign Contribution Regulation Act (FCRA), 2010.

10.  What is FCRA and when is it required for an NGO?

·         The Foreign Contribution Regulation Act (FCRA) governs the acceptance of foreign donations. If an NGO intends to receive foreign funds, it must be registered under the FCRA and obtain prior approval from the Ministry of Home Affairs (MHA).

11.    How much capital is required for registering a Section 8 Company?

·         For registering a Section 8 company under the Companies Act, 2013, there is no minimum capital requirement. The organization should, however, maintain proper financial records and fulfill compliance under the Companies Act.

12.   What are the compliance requirements for an NGO after registration?

·         NGOs must comply with various regulations such as:

-       Filing annual returns with the relevant authorities

-       Maintaining proper accounts and financial records

-       Conducting regular board meetings

-       Adhering to tax-related compliance (such as obtaining 12A and 80G certificates)

13.   Can an NGO be deregistered?

·         Yes, an NGO can be deregistered if it fails to comply with the registration norms or if the organization becomes inactive. The process of de-registration varies depending on the registration type (society, trust, or company).

14.  Is there any cost associated with NGO registration?

·         Yes, the cost of registration depends on the type of NGO and the specific state requirements. It includes filing fees, legal charges (if applicable), and other associated expenses.

15.   Can an NGO change its registered office address after registration?

·         Yes, an NGO can change its registered office address, but it must update the relevant authorities (Registrar of Societies, Charity Commissioner, etc.) about the new address.

Why Choose Filings Corner?

1.       Expert Guidance: Our professionals ensure accurate and compliant registration.

2.      Customized Solutions: Tailored advice to meet your organization's specific needs.

3.      End-to-End Support: From registration to post-registration compliance, we handle it all.

4.      Transparent Pricing: Clear and competitive pricing with no hidden costs.

5.      Timely Execution: Fast and efficient services to avoid unnecessary delays.

Simplify your NGO registration process with Filings Corner. Contact us now for a consultation and ensure your organization complies with all legal requirements.

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