NGO Registration: An Overview

Certain organizations in India work purely intending to create a difference in society as they take certain objectives and work on them passionately to bring a positive change in society which are known as Non-Governmental Organizations (NGOs). They act as independent entities who realize and raise various social and economic matters and make efforts to eradicate such issues by raising awareness, educating and training through workshops, promote subjects such as art, culture, science sports, etc. for the betterment of society the funds raised by way of Government aid, charity, or donations received from corporates and philanthropists. Continue reading to understand what an NGO is, its different forms, the benefits afforded to a registered NGO in India, the process of registration, and the time involved in obtaining NGO registration.

What is NGO Registration?

Non-profit organisation or NGO is a non-profit organisation which is formed by a group of persons with the objective to promote non-profit causes such as science, art, society welfare, sports, health, religion, charity, protection of wildlife, protection of environment or any other charitable reason. NGO uses all its receipts in order to fulfil its objectives rather than making any profits.

Types of NGO Registration

There are different types of NGO registrations in India:

• Trust Registration: Under the provisions of the Indian Trusts Act 1882, Charitable trusts are registered as public trusts under which a person (settlor of trust) assigns ownership of the property towards a trustee who holds and manages property for the benefit of the public at large (beneficiary).
• Registration as a Society: As provided under the Society Registration Act 1860, a society is an organization that has seven or more members to operate more social or charitable causes. The affairs of society are governed by its governing body and a separate management committee, which is elected through a special resolution.
• Registration as a Section 8 Company: A non-profit company, or section 8 company, is an organization incorporated as a company under the provisions of the Companies Act 2013 aimed at social or charitable purposes and not generating profits. Such a company shall not be allowed to keep its earnings or distribute any part of them to its members or promoters but rather for purposes such as encouraging art and culture, the advancement of faith, or fields such as science, art, commerce, sports, etc., or any other basis for the social or economic growth of society.

Pre-requisites for NGO Registration in India

For Registration as a Section 8 Company

• Not less than two initial directors in the case of a private company and not less than three in the case of Registration as a public company.
• Minimum one director to be an Indian resident.
• A key objective of the company shall be for non-profit.
• Profits earned cannot be shared among shareholders.
• Registered office .

For Registration as a Trust

• Should have at minimum two members.
• The object of the trust shall be non-profit only.
• All the members of the trust shall be residents of India.
• Registered address.

For Registration as a Society

• Needs to have at least seven working members.
• Members must be chosen as the president, secretary, and treasurer of the proposed society.
• Members should be residents of India.
• Registered office address .

Documents Required for NGO Registration

For Trust Registration

• Passport-sized pictures of the trustee and beneficiary recently.
• Proof of identification for the trustee and beneficiary.
• Proof of address for the trustee and beneficiary.

For Society Registration

• Passport-sized pictures of the proposed members (self-attested).
• Self-certified copy of identification proof for the members.
• Proof of residence for the key members and office-bearers (self-attested).

For Section 8 Registration

• Passport-sized pictures for the proposed members and directors.
• Proof of identification for the initial members of the proposed company (self-attested).
• Proof of residence for the key members and directors (self-attested).

Advantages of NGO Registration in India

NGO registration in India offers several advantages, some of which are outlined below:

• Distinct Legal Identity: NGOs registered with the due process of law have the benefit of holding a separate legal identity apart from its stakeholders, which enables trust and confidence among them.
• Eligibility for Grants and Assistance: Registered NGOs are qualified to apply for grants and assistance available under various Government policies and programs, apart from private institutions, enabling the availability of better resources to achieve their objectives.
• Separate Assets: An NGO having a separate existence from its members could facilitate ownership of property, which could be bought and sold to retain fixed assets.
• Tax Benefits: Any revenues or profits NGOs generate are reused for social or charitable purposes and thus exempt from tax payments.
• No Minimal Share Requirement: NGOs registered under the legal provisions have been relieved of any minimal share capital requirements to meet their operational needs, allowing them to start their activities more easily.
• Easier Access to Credit: Post-registration, it becomes easier for NGOs to access credit from financial institutions or lenders to meet their operational expenditures, take loans, or buy or sell fixed assets compared to unregistered NGOs.
• Perpetual Existence: Unlike partnership firms or sole proprietorships, NGOs in India enjoy perpetual existence until dissolved through due process of law.

Process of NGO Registration in India

In case you decide to register your NGO as a trust, you should prepare an application that includes information such as the proposed name of the trust, the trustee, the mode of succession, the trust deed, and a nominal trust registration fee, which varies state-wise, and apply to the registration authority having authority over where the property is located.

Upon receiving the application, the Registrar will verify the contents of the application to the effect that the application is complete in all respects and may allow the Registration of the trust by entering the name into the Register of Trusts.

NGO Registration Process as a Society in India

An NGO could be registered as a society by seven or more members who could be foreign nationals, foreign corporations, or any other registered society in India, along with other Indian citizens and corporations. The Registration process could be initiated by preparing the Memorandum of Association of the proposed society, which all the members shall be required to sign.

Step 1: Select Proposed Name

To start with the process, choose a name for the proposed society with the consent of all the members, for which:

• The name shall not be similar/identical to the functioning society incorporated under the Societies Act 1860;
• It should not indicate any close link with any government body;
• The name proposed shall not contravene the provisions of the Names and Emblems Act 1950.

Step 2: Draft Governing Documents

Now, the applicants need to get their governing documents ready, which will define the key objectives of the society, its office-bearers, powers of the society, and bylaws, which describe the rights and duties of the members, rules for day-to-day management, and decision-making process for the business operations—a post which, the documents shall be signed by all members and notarized by a public notary.

Step 3: Form Submission for Society Registration

After preparation of the Memorandum and bye-laws of the society, the applicant shall submit an application for Registration of Society with requisite attachments along with the following:

• Drafted cover letter along with a formal request for Registration;
• Copy of drafted memorandum and by-laws of the proposed society signed by members;
• Affidavit on oath by the presiding officer of the society that affirms the association.

Step 4: Issue of Registration Certificate for Society

On receiving the application, the Registrar of Societies may process the application and, upon satisfaction regarding meeting all requirements for Registration of Society, allow Registration by granting a certificate to the same effect.

Process of Section 8 Company Registration in India

For applicants who wish to register the proposed NGO as a Section 8 company, the registration process has been simplified through one comprehensive form-filling process through the MCA portal.

Step 1: Sign in to the MCA Portal

To start the registration process, sign in to the MCA portal by clicking Business User and creating a login ID by feeding general information like a mobile number and registered email address, after which an OTP will be generated.

Step 2: Make an Application to Obtain a DSC

Now, the applicant shall apply for DSC registration, which will be essential to affix signatures to the incorporation form.

Step 3: Fill in Part A and Part B for Incorporation

To begin with the process of incorporation of the company, start by filling Part A for name reservation by recommending at least two new names while adding words that specify its non-profit nature, i.e., Foundation, Federation, Academy, Association, etc. Next, fill out Part B of the SPICe+ to accomplish other requirements for incorporation, such as:

• Incorporation of a Section 8 company;
• Request for issue of DIN;
• Request for PAN and TAN registration;
• Request for PF and ESI Registration;
• Setting a bank account for business.

After submitting all the details and the requisite documents, verify the contents and attach digital signatures. Submit the application online.

Step 4: Issue a Certificate of Incorporation and License from the Government

Once the MCA authority receives the application, the Registrar of Companies shall verify whether the application is genuine and complete in all respects and may issue a Certificate of Incorporation. Since a Section 8 company needs to obtain additional licenses from the Union government, it can start its business operations.

Fees for NGO Registration in India

Typically, registration fees for a non-profit organization may be around ₹1,000–5,000 or more depending upon the state rates as per the statutory laws, as NGO registration falls under the state subject.

Time Involved in NGO registration

While Registration of a trust may require around 15-20 business days, subject to completion of the verification, it may take around 10-15 working days, subject to fulfilment of the verification process for company registration. However, applicants looking to register their NGO as a society may have to wait longer, up to 25 working days, depending on the verification completion.

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Conclusion

Therefore, an NGO in India could be registered as a trust, society, or non-profit company, which has been further simplified due to the convenient online application procedure for smooth execution of the registration process. However, insufficient knowledge with respect to NGO registration in India could make the process lengthy and worrisome for you. If you have any questions or require any assistance in regard to NGO registration in India, you may consider getting advisory assistance from experienced professionals at BizFoc.

Frequently Asked Questions about NGO Registration in India