A non-governmental organisation (NGO) is a group dedicated to charitable objectives. In India, NGO registration is required. An NGO is a non-profit organisation that promotes culture, technology, sports, education, study, welfare programs, religious causes, charities, and other causes. There are numerous types of NGOs registered in India under the Trust Act, the Society Registrations Act, and the Companies Act. The NGO is registered as a Section 8 company under the Companies Act of 2013. This statute requires all not-for-profit and charitable trusts to register. The difference between a trust and a non-governmental organisation (NGO) is that the latter is registered with the Ministry of Corporate Affairs (MCA).According to the laws mentioned in the following acts, any Section 8 company may register as an NGO in India. Section 8 of the Companies Act of 2013 Registration of trusts under the Indian Trust Act of 1882 society as defined by the Society Registration Act of 1860.
After the conditions are met, the NGO can be registered under one of three Acts: the Companies Act (2013), the Societies Registration Act (1860), or the Indian Trusts Act (1882).
- NGO as a “Section 8 Company”: If the NGO is intended to be in the form of an organisation “for promoting trade, art, science, sports, education, research, social welfare, religion, charity, environmental protection, or any other such object [2],” the NGO can be registered as a “Section 8 Company.”
- If an NGO has seven or more members, it can be registered as a society under the provisions of the Societies Registration Act. Even if the registration process is more time-consuming and complex than other techniques, a society offers greater operational and working flexibility.
- An NGO as a Trust: The most straightforward method of creation is a charity trust. It is not required by law to register a trust.
NGO registration requirements in India
Obtaining a Certificate of Digital Signature: Because NGO registration papers in India must be digitally signed before being filed online, the proposed directors must provide digital signatures. Certifying bodies under the Government of India issue digital signature certificates. The cost of obtaining a DSC varies depending on the certifying organisation.
The next critical step is the development of a “governing board” that will be in charge of making all decisions regarding the establishment, operation, and future of the NGO. As a result, such a body would deal with all critical issues such as planning, raising money, human resources, information technology, and so on.
The next step is to draught a Memorandum of Association. It is a legal necessity, not just a procedural formality. The MEA should include information such as the name of the NGO, its members, the address of the office, the addresses of the members, the mission and objectives of the NGO, the rules and regulations of the NGO, and so on.
Procedure for NGO Registration:
Step 1: The applicants must obtain a DSC from the directors of the prospective NGO. To obtain a DIN, submit Form DIR-3 to the ROC after acquiring a DSC.
Step 2: After DIR-3 approval, the ROC will assign the nominated directors a DIN.
Step 3: To apply for a business name, the applicant must submit Form INC-1 to the ROC. A list of six names can be submitted, and ROC will select one depending on availability.
Step 4: After receiving clearance from the ROC, submit Form INC-12 to apply for an NGO license.
Step 5: Once the Form INC-16 has been authorised, the NGO licence will be granted.
Section 8 of the Companies Act, 2013
To register as a Section-8 company, the requirements of the Companies Act, 2013, governing company incorporation, would apply. As a result, Section-8 businesses would be subject to the same legislation across the country. They are similar to other limited companies in this regard. There are just a few peculiarities, such as the fact that a section-8 business does not have to include the word “limited” at the end, that the money created by its operations cannot be delivered as a dividend to the shareholders, that it enjoys tax benefits similar to trusts, and so on. Section-8 company incorporation and registration are also identical to those of regular corporations.
Completing the paperwork and legal requirements normally takes 3-6 months. Even though it takes a longer time to set up, many people favour it since it can create a lot of money on the one hand (by issuing new shares) and it also leads to the democratisation of decision-making power because every member has voting rights commensurate to their shares. As a result, it ensures a better degree of participation and involvement from the greatest number of people.
Societies
A society is an entity that can be formed by a collection of people who share the common goal of fostering science, the arts, literature, social welfare, and useful knowledge. Furthermore, societies aim to establish military orphan funds and preserve public museums and libraries. The Societies Registration Act of 1860 governs societies. To qualify for tax exemption, they must be registered with the respective state Registrar of Societies.
