A Detailed Guide on NGO Registration Process in India

NGOs or Non-governmental Organisations are non-profit or not for profit organisations that work with a charitable objective and towards the betterment of society. In India, NGO is considered an umbrella term and includes Trust, Society, and Section 8 Company. 

Though these are non-governmental organisations and exist for the welfare of society, individuals setting this type of organisation must follow certain rules and regulations and registering it like other business entities is one of these rules. This piece talks about NGO registration process. 

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Individuals can complete NGO registration in three ways. These are as follows -

• Trust
• Societies
• Section 8 Companies

Here are individual discussions on the procedures of these three types of NGO registration in India.

1. How to Register an NGO for Trust in India?

Trusts work with the objective of eradicating poverty by providing education and medical relief. Trusts are segmented into two different categories. These areas are Private Limited Trusts (formed for conducting activities for individuals, families, close ones) Public Limited Trusts (formed for conducting activities for public and for educational and religious purposes). The Indian Trusts Act, 1882 governs the activities of Trusts.

Follow the steps mentioned below to register Trusts in India.

Step 1: Prepare the draft of Trust Deed.

Step 2: Select a suitable name for NG.

Step 3: Select the settlor, trustee (minimum 2) and beneficiary. 

Step 4: Prepare MoA (Memorandum of Association), and execute trust Deed. Execution of Trust Deed must occur on an applicable stamp paper.  

Step 5: Settlor and all Trustees must sign Trust Deed and register with the local registrar where their registered office of NGO is located.

2. How to Register an NGO for Societies in India?

Societies are member-based organisations that operate for charitable purposes. The Societies Registration Act of 1960 governs the activities of Societies. In order to get tax exemptions, Societies need to register themselves with the State Registrar of Societies.  

Follow the steps mentioned below to register Societies in India.

Step 1: Select a suitable name for a Society, a form of NGO. 

Step 2: Submit 2 copies of prescribed documents to the Registrar of Societies of the State Government.

Step 3: After verifying documents submitted by a Society, the respective authority will issue the Incorporation Certificate and NGO Registration Number.

3. How to Register an NGO Online for Section 8 Company in India?

Wondering how to register an NGO online, especially that of Section 8 Company? Read on!

Section 8 Company carries out operations without any monetary benefit and focuses on promoting science, arts, literature, social welfare, and environmental activities. Section 8 Companies cannot declare any form of a dividend. The revenues earned from these activities need to be deposited with these companies and utilised for charitable purposes. The Companies Act, 2013 governs Section 8 Companies.

Follow the steps mentioned below to register Section 8 Company in India.

Step 1: Apply for DSC (Digital Signature Certificate) and DIN (Directors Identification Number).

Step 2: Select a suitable name for a company for Section 8 Company. Before that, they must conduct a search whether there is any similar name already available against a company or Limited Liability Partnership.  

Step 3: File for reservation of company name via the Reserve Unique Name facility available on the MCA (Ministry of Corporate Affairs) portal. Applicants can file for a maximum of 2 names at one attempt. 

Step 4: After successfully choosing a name for the Section 8 Company, prepare MoA and AoA and other essential documents.

Step 5: At this stage, file an application in SPICe Form and attach all the essential documents.

Step 6: After verifying the submitted documents, the respective authority will issue the Certificate of Incorporation and Licence. 

The above-mentioned steps certainly answer the question of how to register an NGO in India. However, individuals must know the eligibility requirements and documentation to ensure a smooth establishment and registration process.

Here is a list of documents essential for different types of NGO registration.

1. Documents Required for Trust Registration

• Electricity or water bill of registered office as address proof.
• Identity proof (Voter ID, Driving Licence, Passport, Aadhaar Card) of at least two members of the company.

2. Documents Required for Societies Registration

• Address proof of the registered office.
• Identity proof of all members (Driving Licence, Copy of Passport, Voter ID, Aadhaar card)
• Name of the society.
• 2 copies of the Memorandum of Association (MoA) and By-laws of the society.

3. Documents Required for Section 8 Company Registration

• Address proof (electricity or water bill or house tax receipt) of the registered office.
• Identity proof of all the Directors (Driving Licence, copy of Passport, Voter ID, Aadhaar card).
• Name of the Company for approval.
• Memorandum of Association (MoA) and Articles of Association (AoA) of the Company.

To be able to start an NGO, applicants have to fulfil certain eligibility parameters. These are as follows:

• Minimum 2 directors and a maximum number of members is 200 if an NGO wants to complete the incorporation process as a private limited company. 
• For charitable Trusts, 7 members are required as members. 
• Minimum of 3 directors if NGO wants to complete incorporation process as a public limited company. There is no upper limit for registering an NGO as a public limited company.
• A non-profit can register under Section 8 Companies Act with ROC (Registrar of Companies). 

Registering an NGO under the Companies Act, 2013 guarantees several benefits. Read on to know about these in detail.

Here is a list of benefits of registering an NGO under Section 8 of the Companies Act, 2013.

1. Tax Benefits

Section 8 Companies can enjoy tax benefits under 80G of the Income Tax Act, 1961.

2. Stamp Duty Exemption

Section 8 Companies registered as NGOs can get stamp duty exemption under the Income Tax Act. With the saved up money, these companies can reinvest the money for its development.

3. Limited Liability

These companies have limited liability as per their subscribed shares. Thus, members of Section 8 Companies are not liable for paying anything in case the company faces loss.

4. No Minimum Capital

To commence a Section 8 Company, members need to have minimum capital.

5. Ease of Transferring Ownership

Section 8 Companies can easily transfer ownership which is not possible for other companies.

Registered companies must follow certain rules and regulations. Otherwise, they have to face the consequences for non-compliance with the Companies Act, 2013. Read along!

Penalties for non-compliance under the Companies Act is discussed below,

• The Government of India can cancel Section 8 Company licence if it fails to comply with the provisions mentioned in the Act.
• Further, GOI can revoke Section 8 Company licence in case that company is involved in fraudulent activities or violated establishment objectives.
• Companies will have to pay from ₹ 10 lakh to ₹ 1 crore for non-compliance with the Companies Act.
• Directors and officers failing to comply with the provisions of the Act may have to pay not less than ₹ 25 thousand up to ₹ 25 lakh or both.

Read the details carefully and complete the registration process for NGO without any hassle.