Non-Government Organisation (NGO) is a unique type of business structure that works with the motive of social development instead of earning profits. Many people who desire to incorporate NGO are skeptic about its registration process.
Do you want to start an NGO in India? First of all, we would like to congratulate you on this decision. With the drastic increase in awareness the number of NGO startups emerging in India. Before proceeding with the idea to incorporate an NGO you must become well versed with it registration process and the rules and regulation applicable to it.
The basic motive behind the introduction of the concept of NGO was to promote the specific cause or welfare of humanity. These are the charitable organization that survives on the donations by the wealthier section of society. Before moving forward to the registration of NGO we will first take a look at the meaning of NGO.
What is an NGO?
Non- Government organization (NGO ) is a voluntary association of people who desire to come together and work for the development of the society. Unlike conventional profit-making business units, the NGOs are basically non- government organizations that don’t work for any profit. Any person who desires to work for the betterment of the society can incorporate an NGO under the Indian laws. One important thing to be noted here is that as the NGO is a non-profit organization thus any profit earned by it can only be applied in the promotion of its objects only.
How do you get started?
It is not very easy to start an NGO in India. There are a lot of things that the person desiring to incorporate an NGO is required to look out for. Below we have listed out the steps to incorporate NGO in India-
1. The first step for every business is to conceive the idea. Initially, the person desiring to incorporate the NGO is required to determine the objectives of the NGO.
2. Further, the person is required to set-up a governing body that will be responsible for handling all the decisions taken by the NGO. The function of governing body will include long term and short term planning, the management of financial affairs and human resource management.
3. Finally, you are required to register your NGO under the specified acts of Indian Law depending upon the mode of operation of the NGO.
Registering the NGO
In India, NGO can be registered under three acts which state the certain laws and regulations to facilitate the management of the company. The three Indian law acts for NGO registration includes the following-
Indian Trust Act
Wherein the use of property or infrastructure is concerned with hospitals and school the registration under Indian trust Act must be obtained. Most of the states have their own trust acts under which the NGO must be registered. However, for the states who do not have their own act Indian Trust Act, 1882 is applicable. When an applicant desire to register his NGO under this act he is required to file all the essential information about financial management and funds collection.
For filing the application a form is required to be filled and the applicant is required to affix a court fee stamp and a nominal registration charge is to be paid which depends upon the value of the property. The application form filed should be accompanied by the trust deed.
Societies Registration Act, 1862
If you desire to reduce the number of regulations then registering your NGO under society registration Act 1862 is the idol option for you. The NGO registration under this Act can be obtained at the district level or the state level. For registering the NGO under this act it is mandatory for the proposed NGO to have minimum 7 members who will act as president, vice president, financial officer, director, and members.
As the registration of society can be done at state or district level the procedure of its registration may vary from state to state. However one of the basic requirements of registration of NGO under this act includes the filing of the memorandum of association, the applicability of rules and regulation, consent of every member with identity proof and an affidavit from the president is required.
Indian Companies Act 2013
Under Companies Act 2013 multiple types of organizations are registered including the private limited company, One Person Company, public company and limited liability partnership etc. NGO can be registered under Companies Act 2013 as the section 8 company with the objective of promoting commerce, art, science, religion, charity or any other useful object’. To register the company under this act minimum three members are required and a memorandum of association shall also be filed.
To register the section 8 company first of all the name approval must be sought to form the ministry by filing the form. Further after the name approval INC -12 must be filed for obtaining the license of NGO. Then a form called Spice must be filed containing the memorandum of association of company and article of association. After the approval for all forms filed your NGO will be incorporated under this Act.
Obtaining special licenses
Apart from obtaining registration under any of these three acts, an NGO is also required to obtain several special licenses. If the office of NGO I required to set up in tribal areas then the Special Licensing, like the Shop and Establishment Act (for opening an office), inner line permit (for offices in Tribal and restricted areas) shall be acquired. Further, in case of employing foreign national FCRA registration, no-objection certificate along with work visa is required.
Moreover if the NGO desire to enjoy tax exemption they have to file an application along with their annual report to acquire 80G certification.