NGO Registration in India

India is a developing country with a growing need for humanitarian and social services. This is primarily where non-governmental organizations (NGOs) come into picture. NGOs in India are known to be non-profit organizations that work towards bringing about a positive change in the society. With an increasing number of people looking forward to start their own NGO, it is important to understand the legalities and procedures involved in the process. One such crucial step is the registration of an NGO in India. In this article, we will understand the importance of getting an NGO registered in India and the procedure involved in the same.

1. NGO Registration in India

You may be wondering how to register an NGO in India. While it is not mandatory to register an NGO if you wish to engage in social work, it is necessary if you want to receive funds for your cause. Registering an NGO involves legal consultation and requires an entrepreneurial vision if you intend to work professionally. The process differs based on the specific act under which you register, such as the Indian Trust Act, Indian Societies Act, or Companies Act. NGO registration can be done as a trust, society, or a Section 8 company. Trusts are generally used for poverty eradication, education, and medical relief, while societies are member-based organizations that operate for charitable purposes. Section 8 companies are Limited Liability entities formed for social welfare. Once registered, a society registration certificate will be sent. Remember that as an NGO, all profits made by the organization must be invested towards the social cause. 

2. Access to funding and resources by NGO

NGO Registration in India is not mandatory but requires legal consultation if you plan to receive funds and donations for your social work. The registration process can be done under different structures such as a Trust, Society or a Non-Profit Company. All non-profit organisations are referred to as NGOs in India. NGOs play an essential role in improving society through philanthropic endeavours. As an NGO, you can access numerous benefits and resources, such as tax exemption, additional funding, and support from the government and private sector.

By registering as an NGO, you will be seen as a credible organization, attracting more donors and volunteers. The registration process will also expand your resources, allowing you to reach more people and communities. NGOs can receive financial backing from various channels for their social work, such as the government and private sector, foundations, and international organizations. Additionally, there are several funding opportunities available, such as grants, donations, and crowdfunding.

To access funding, resources, and support, it is essential to comply with all legal norms and regulations set by the government for NGOs. NGOs must ensure that they maintain proper documentation and accounting records of all funds received and spent, ensuring transparency and accountability. NGOs play a vital role in creating social change and promoting sustainable development in India. Registering as an NGO gives you access to funding and resources, ensuring that you can effectively create an impact and address critical social issues. 

3. Tax exemption and benefits for NGO in India

When you register your NGO in India, you can enjoy several benefits and tax exemptions. Since NGOs are considered not-for-profit and tax-exempt, you can focus on carrying out your charitable activities without worrying about tax liabilities. NGOs can avail themselves of several tax exemptions, which means that the saved money can be utilized for further projects. Moreover, once your organization is officially registered, it can acquire land and own fixed assets, and you can develop a structured financial plan that allows the organization to do business without having to worry about taxes. Additionally, NGOs are eligible for credit from lenders and financial institutions, which can be used to finance projects, acquire land or fixed assets. By registering your NGO, you demonstrate effective and responsible leadership, which can attract partnerships with political parties, government donor agencies, financial institutions, charity organizations, and other NGOs. This leads to an unlimited lifetime for your NGO, ensuring that it will be able to continue existing even if the founder/trustees die or leave the organization. Furthermore, registering your NGO also protects your corporate name and image from unauthorized use, allowing you to open a corporate account without any hassle. 

4. Steps to register an NGO in India

It is not necessary to register your NGO for social work. However, if you are expecting to receive funds and money for your social work, it is essential to register your NGO first. Legal consultation and consultancy services are necessary in this case. Trust, a Society, and Section 8 Company are some of the types of NGOs you can register in India. Based on the type of NGO registration you choose, you need to follow various laws and procedures prescribed in respective Acts. This article will discuss the steps involved in registering your NGO in India.

For a Trust registration, the procedure involves selecting the trustees, collecting a copy of the Trust deed, and submitting it with the Registrar. Trusts can get land from the government, and an NGO under the Trusts Act can bring into practice the word Govt. Regd. or ‘Regd.’ 80G certificate advantage under the Income Tax Act. They can also get white capital and benefits under Goods & Service Tax (GST). For Society registration, the founding members must first choose a unique name for the Society and prepare the memorandum of the Society. The Memorandum of the Society along with the Rules and Regulations of the Society must be submitted to the concerned Registrar of Societies in the State with the prescribed fee.

The benefits of registering an NGO as a Society include being saved from paying income taxes, separate legal entity, and limited liability of the members. The liability of Society members is limited to their share only, and their assets cannot be utilized to pay the organization’s liabilities. Members of the Society are responsible for their individual actions only. After registration, you can also avail of benefits like the 80G exemption under the Income Tax Act, FCRA registration to receive foreign funds, and other legal and financial benefits. These benefits make registering your NGO a worthy investment. 

5. Types of NGO Registrations Available

If you are looking to make a difference in society and support the underprivileged, registering an NGO in India is an excellent option. The registration process involves legalizing your NGO with the government. There are different types of NGO registrations that you may opt for, depending on your goals and objectives. A trust registration, for instance, involves transferring property to a trustee who is responsible for operating the trust. This type of NGO registration is ideal for offering poverty relief, education, medical aid, and other social activities to the needy. The Indian Trust Act of 1882 oversees the registration process for trusts.

Another available NGO registration option in India is society registration, which involves coming together with individuals to promote social work, science, education, art, and other philanthropic activities. The Societies Registration Act, 1860, regulates the registration of societies. After registration, the society assumes a separate legal existence from its members. The freedom to accept funds and donations and the ease of dissolution make society registration a popular option.

You may also consider the Section 8 company registration, created under the Companies Act of 2013 to promote charity, religion, trade, etc. Section 8 companies represent a profitable option for NGOs as they do not require a minimum capital requirement, unlike other forms of registration. Additionally, Section 8 companies receive legal entity recognition and tax benefits, making them an ideal arrangement for aspiring social entrepreneurs. Suffixes like Pvt. Ltd or Ltd are optional for Section 8 companies, and the stamp duty during registration is waived. If you desire to make a difference in society, these various types of NGO registrations can help you to achieve your philanthropic objectives effectively. 

6. Procedure for NGO Registration in India

Registering an NGO in India can be a challenging process, but it is essential if you want to receive funding for your social work initiatives. The first step is to determine whether you want to register as a Trust, Society, or Section 8 Company. Each type of registration has its benefits and procedures that you must follow. For Trust registration, you will need to select settlers and trustees, collect a copy of the Trust deed, and submit it to the Registrar. Trusts can receive land from the government and take advantage of 80G certificate benefits under the Income Tax Act.

If you opt for Society registration, you will need to choose a unique name for your Society and prepare its memorandum. The name should not suggest patronage of the Indian government or attract provisions of the Emblem and Names Act 1950. You will also need to prepare a Memorandum of the Society, along with its Rules and Regulations. After signing these documents, you will file them with the Registrar of Societies in the State with the prescribed fee. Society registration offers the benefit of saving income taxes, and members’ liability is limited only to their share.

An important point to note is that it is not necessary to register your NGO if you are only doing social work without expecting any funds. However, to receive funding, you must spend on legal consultation for registration. If you plan to work professionally and have an entrepreneurial vision, it is recommended to seek consultancy services. Additionally, while registering your NGO, ensure that you follow the laws and procedures prescribed in the respective Acts.

It is also important to keep in mind that there is no federal law that governs public charitable trusts in India. Thus, certain states like Madhya Pradesh, Maharashtra, Gujarat, and Rajasthan have a specific Public Trusts Act. Lastly, NGO registration provides legal rights and obligations separate from those running and/or owning the entity. Hence, the liability of members is limited to their share, and each member is accountable for their actions only. 

7. Documents Required for NGO Registration

Are you planning to start a non-governmental organization (NGO) in India? Registering an NGO not only gives it a legal status but also offers various benefits. To register as an NGO, you need to submit specific documents to the concerned authority. Here is a list of documents required for NGO registration in India.

To start with, you need to provide the necessary details of the NGO’s proposed directors and obtain their digital signature certificate (DSC). The DSC can be obtained from certified agencies under the Government of India. You also need to apply for a director identification number (DIN) for the directors of the company, for which you need to submit self-attested copies of PAN, identity, and address proofs of the directors.

Next, you need to file Form INC-1 to apply for a company name. You can provide six preferred names, out of which one will be allotted to you based on availability. After getting approval, you must file Form INC-12, which requires a declaration as per Form INC-14, INC-15, draft Article of Association (AOA), and Memorandum of Association (MOA) as per Form INC-13 and an estimated income & expenditure statement for the next three years.

Finally, after approval of the Form, the NGO license will be issued in Form INC-16. You need to file SPICE Form 32 with the Registrar of Companies (ROC) for incorporation. Once the ROC verifies the documents, it issues a Certificate of Incorporation with a unique Corporate Identification Number (CIN). 

8. Advantages of NGO Registration

If you want to serve society and make a difference in people’s lives, registering an NGO is an excellent way to achieve your goal. By registering your organization with the government, you will be able to operate legally and enjoy several benefits. NGO registration is a simple process that involves providing specific information and documents, such as a registration application, memorandum of association, and a list of office bearers.

One advantage of registering an NGO is that you will become a self-governing body that aims to help the poor, the underprivileged, and the destitute. NGOs work to improve society by promoting education, providing medical aid, and raising awareness about social issues that are often overlooked. By registering your NGO, you will have the opportunity to make a genuine difference in people’s lives and contribute to the betterment of society.

NGO registration also provides several benefits, such as tax exemption and easy dissolution. NGOs are eligible for income tax exemption, which means that the funds and donations they receive are not subject to taxes. Additionally, NGOs can be dissolved easily without the burden of complicated compliance or paperwork. By registering your NGO, you will be able to enjoy these benefits and promote your social work more effectively.

Finally, registering an NGO is a significant advantage because it gives you the freedom to accept funds and donations. NGOs can receive funds and donations from various sources, including individuals, government organizations, and international agencies. By accepting these funds, you will be able to achieve your goals more effectively and make a more significant impact in people’s lives. With these advantages, registering an NGO is an excellent way to make a difference and support those in need. 

9. Funding Opportunities for Registered NGOs

As a registered NGO in India, there are various funding opportunities available for you to support your social welfare projects. You can avail grants from government ministries such as Cultural Affairs, Health and Family Welfare, Women and Child Development, Human Resource Development, Social Justice and Empowerment, Tribal Affairs, and Urban Development. In addition, certain NGOs combatting HIV through prevention and care are also funded under The National Aids Control Programme. By catering to specific areas such as women and child development, health-related problems, OBCs/DNTs/EBCs welfare, and environmental protection, you can receive grants that will help further your efforts to promote social good.

Apart from government funding, various private organizations and international grant agencies also offer funding opportunities. However, to be eligible for funding, your NGO must be registered and have a properly formed governing and executive body. Additionally, it must demonstrate that it can utilize the funds efficiently by proving its track record of successfully implemented projects. Maintaining a good profile with social activist groups and voluntary agencies also enhances your chances of getting funded. By collaborating and building networks with like-minded partners, you can ensure financial sustainability and implement your proposed aims and ideas of the organization. 

10. NGO Registration and Land/Asset Acquisition

Registering your NGO in India is a crucial step in contributing towards the betterment of society. With three legal ways of registration – Trust, Society, and Section 8 companies – every organization can choose the one that suits its scope of activities. Registering your NGO under the Companies Act 2013 provides several legal and financial benefits. Your organization gains the right to acquire land, own fixed assets, and acquire liabilities. Moreover, you can buy, acquire, and register assets and stakes in the name of your NGO. NGOs are directly funded with charity, and therefore, there is no minimum share capital requirement needed to function independently.

Acquiring land and assets forms an essential part of functioning as an NGO. Once registered, your organization can acquire such assets under its common seal and protect itself from unlimited liabilities. Registering under the Income Tax Act 1961 provides tax-exempt status to NGOs registered under the Companies Act 2013. In addition, NGOs are exempted from stamp duty, resulting in more tax-saving methods. NGOs operate in a tax-free mechanism, allowing the organization to do business without tax liabilities. The registration of your organization can suggest that there is effective and responsible leadership in place, building the public’s trust.

Registered NGOs have an unlimited lifetime and will carry on existing even if the founder/trustees leave. Partnering with political parties, government agencies, financial institutions, and other NGOs can help achieve common objectives. Registering an NGO can afford access to credit from lenders and financial institutions, enabling promotion of organization activities, financing mortgage, acquiring land or fixed assets. Lastly, your corporate image and name is protected from unauthorized use once an NGO is registered, ensuring your organization’s longevity and trust in the public interest. 

11. Legal Protection and Liability Limitations for Registered NGOs

If you are looking for a way to protect your organization and limit your liability, registering it as an NGO in India is a great option. When officially registered, your NGO is permitted to acquire land, own fixed assets, and/or acquire liabilities under its common seal. Plus, it is against the law for an unregistered organization to buy hold and/or sell land anywhere. With no minimum share capital requirement, your NGO can function independently without needing a higher share capital.

Not only that, but NGOs registered under the Companies Act 2013 are exempt from several taxes, freeing up money that can be reinvested into the organization. Plus, under the Income Tax Act, section 8 companies as NGOs are exempt from stamp duty which results in more tax-saving methods for the company. NGOs are considered not-for-profit and tax exempt which means you can develop a structured financial plan that allows the organization to do business devoid of tax liabilities.

Additionally, registering an NGO can provide legal protection and liability limitations. Once your organization is registered, no one can use the same name or a name similar to it throughout India, protecting your corporate image and name from unauthorized use. Also, NGOs have an unlimited lifetime and will carry on existing even if the founder/trustees die or leave the NGO. The organization’s continuation will only cease if it is formally wound up by the Order of Court of India. Finally, registering an NGO can afford access to credit from lenders and financial institutions, allowing you to further promote the organization’s activities, finance a mortgage, or acquire land or fixed assets. 

12. Disadvantages of NGO Registration in India

As you explore the option of NGO registration in India, it is important to also consider the potential disadvantages of this path. One disadvantage is the lengthy process involved in registering an NGO, which can be time-consuming and frustrating. You may have to navigate complex legal requirements and bureaucratic hurdles, which can delay the start of your organization’s operations. Additionally, there are ongoing compliance requirements that must be met, such as filing annual reports and maintaining accurate financial records. Failure to meet these requirements can lead to penalties and even the revocation of your registration. Another potential disadvantage is the limited scope of activities that an NGO can engage in. NGOs are typically focused on social welfare, education, or public health issues, and may not be able to engage in commercial or political activities. Finally, NGOs may face competition from other organizations, including government agencies and other NGOs, which can make it challenging to secure funding and gain visibility for your work. Despite these challenges, however, many NGOs are successful in creating positive change in their communities and contributing to a better world.