How to Start an NGO in India

Last Updated at: October 27, 2020
3425
The administration of Bruhat Bengaluru Mahanagara Palike (BBMP) has partnered with more than 50 civil society organizations (NGOs) and relies on their expertise and experience in handling Covid-19 in the wake of spiraling coronavirus cases in the tech city.

 

‘Service to others is the rent we pay for our room on the Earth’

Selfless service was one of the fundamental principles advocated by the father of our nation, Mahatma Gandhi. While all of us may think of doing some form of voluntary work, and may actually do so, constituting an NGO for this purpose is a legitimate and organized step forward in this direction. If you own an NGO or plan to start one, here are a few pointers to be mindful of.

  1. Forming an idea for your charitable entrepreneurship

Starting an NGO is no less than the groundwork required for a business venture. In fact, it is more work as you need not just financial resources but community support, a strong moral backing and commitment to your idea. If you haven’t decided what field of charitable and social work you’d like to engage in, it’s a good idea to introspect and understand your interests and compare them with what you feel you can contribute best to.

2. Deciding a name, mission and vision document and preparing for registration     To establish a non-governmental organization in India, you are legally required to document a trust deed/ Memorandum of Association /Rules & Regulations that contain the name and address of the NGO and the process with which it is likely to take decisions, mission and objectives, details of administration and governance of the NGO. In case of a society, a minimum of seven persons, eligible to enter into a contract are required to be registered under the Societies Registration Act, 1860. If you plan on creating a trust, only two persons are sufficient.

Make your NGO more legal now

  1. Gathering financial resources and understanding implications

A trust is entitled to accept donations; even international remittances may be possible subject to the limitations imposed by the Foreign Contribution Regulation Act. Another trending option to explore is receiving earmarked funds under the Corporate Social Responsibility expenditure that large companies need to undertake.

Since the Companies Act defines a company type NGO to be an association that is formed for the promotion of art, science, commerce, religion or charity, it can be registered as a not-for-profit company but the members of it cannot be paid a dividend. All income and profits should be utilized for furthering the objectives of the company. Although you can sell your NGO products, whether handicrafts or organic food or any service, it is important to note that the profit and proceeds should only be used for the furtherance of the purpose of the NGO and cannot be diverted elsewhere.

It is also important to note here that you must apply for a Section 80G registration, which entitles all donors to claim tax exemption for the amount donated to your NGO. It also serves as a tax planning tool to prospective donors and enhances the value and credibility of your organization.

  1. Seeking a Section 12A registration for claiming tax exemption

It is imperative for an NGO to do to seek an exemption certificate, which is known as a 12A registration. Without an NGO registration, the receipts would be entitled to normal tax rates and the beneficial exemptions available would evade you. This registration also helps in seeking grants from government or organizations abroad, as it serves as a legitimate proof of the existence and purposes of your NGO. It is also worth mentioning that regardless of whether the NGO is constituted as a trust, society or a not-for-profit company, it will have to seek a 12A certification to avail tax exemption.

  1. Fostering partnerships

Since it isn’t profits that drive the business but it’s ultimate social focus, it is imperative that necessary partnerships with government agencies, businesses, and media be fostered, to help promote the cause and engage stakeholders fruitfully.

To know about NGO : Click here

You should also read:
1+

How to Start an NGO in India

3425
The administration of Bruhat Bengaluru Mahanagara Palike (BBMP) has partnered with more than 50 civil society organizations (NGOs) and relies on their expertise and experience in handling Covid-19 in the wake of spiraling coronavirus cases in the tech city.

 

‘Service to others is the rent we pay for our room on the Earth’

Selfless service was one of the fundamental principles advocated by the father of our nation, Mahatma Gandhi. While all of us may think of doing some form of voluntary work, and may actually do so, constituting an NGO for this purpose is a legitimate and organized step forward in this direction. If you own an NGO or plan to start one, here are a few pointers to be mindful of.

  1. Forming an idea for your charitable entrepreneurship

Starting an NGO is no less than the groundwork required for a business venture. In fact, it is more work as you need not just financial resources but community support, a strong moral backing and commitment to your idea. If you haven’t decided what field of charitable and social work you’d like to engage in, it’s a good idea to introspect and understand your interests and compare them with what you feel you can contribute best to.

2. Deciding a name, mission and vision document and preparing for registration     To establish a non-governmental organization in India, you are legally required to document a trust deed/ Memorandum of Association /Rules & Regulations that contain the name and address of the NGO and the process with which it is likely to take decisions, mission and objectives, details of administration and governance of the NGO. In case of a society, a minimum of seven persons, eligible to enter into a contract are required to be registered under the Societies Registration Act, 1860. If you plan on creating a trust, only two persons are sufficient.

Make your NGO more legal now

  1. Gathering financial resources and understanding implications

A trust is entitled to accept donations; even international remittances may be possible subject to the limitations imposed by the Foreign Contribution Regulation Act. Another trending option to explore is receiving earmarked funds under the Corporate Social Responsibility expenditure that large companies need to undertake.

Since the Companies Act defines a company type NGO to be an association that is formed for the promotion of art, science, commerce, religion or charity, it can be registered as a not-for-profit company but the members of it cannot be paid a dividend. All income and profits should be utilized for furthering the objectives of the company. Although you can sell your NGO products, whether handicrafts or organic food or any service, it is important to note that the profit and proceeds should only be used for the furtherance of the purpose of the NGO and cannot be diverted elsewhere.

It is also important to note here that you must apply for a Section 80G registration, which entitles all donors to claim tax exemption for the amount donated to your NGO. It also serves as a tax planning tool to prospective donors and enhances the value and credibility of your organization.

  1. Seeking a Section 12A registration for claiming tax exemption

It is imperative for an NGO to do to seek an exemption certificate, which is known as a 12A registration. Without an NGO registration, the receipts would be entitled to normal tax rates and the beneficial exemptions available would evade you. This registration also helps in seeking grants from government or organizations abroad, as it serves as a legitimate proof of the existence and purposes of your NGO. It is also worth mentioning that regardless of whether the NGO is constituted as a trust, society or a not-for-profit company, it will have to seek a 12A certification to avail tax exemption.

  1. Fostering partnerships

Since it isn’t profits that drive the business but it’s ultimate social focus, it is imperative that necessary partnerships with government agencies, businesses, and media be fostered, to help promote the cause and engage stakeholders fruitfully.

To know about NGO : Click here

You should also read:
1+

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Avani Mishra is a graduate in law from the National Law Institute University, Bhopal. She qualified the Company Secretary course with an All India Rank 1 and is a recipient of the President’s Gold Medal for her academic distinctions. She also holds a B.Com degree with a specialization in Corporate Affairs and Administration.