Types of NGO Registration and its benefits

Last Updated at: January 04, 2020
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Types of NGO registration and the benefits

If you are looking forward to start an NGO in India, then the first thing that you would require is NGO registration. Besides, you would also require information about the different NGOs in India. In this blog, we will explore different types of NGOs and what are their advantages. 

What are the different laws that govern NGO registrations in India?

The following laws govern the NGO registration:

  • Societies Registration Act, 1860
  • Indian Trusts Act, 1882
  • Section 8 company registration

Types of NGO Registration

There are three ways through which you can register NGOs in India:

  • Society registration
  • Trust registration
  • Section 8 Company registration

Purpose of registering NGOs in India

If you desire to serve society and help the people, then the best way to achieve this goal is by going for NGO registration. Various reasons for registering a society in India are:

  • These are self-governing bodies which aim towards the betterment of society by helping the poor and the needy
  • The ultimate goal of NGO is to help the underprivileged people and provide them with an opportunity for growth
  • Once you have defined the agenda of NGO, you can go ahead with NGO registration; there are several benefits that NGOs enjoy and will be discussed ahead.

Make your NGO more legal now

Non-Governmental Organization Registration

Trust Registration:

The registration for trust can be done via the Society Registration Act, 1882. These are public charitable trusts and are usually formed when the land or property is involved. Indeed, usually, the usage of trust is for the relief of poverty, education, medical aid, etc.

Advantages of Trust Registration

  • Trusts get land from the government
  • Trust registered under the Trust Act uses Gov. registered name
  • Tax benefits
  • 80G certificate benefit
  • White money for constriction of building
  • Benefit on service tax or income tax

Society Registration:

Another way in which you can register NGO is in the form of society. To form a society, the individual comes together for promoting scientific purpose, charitable purpose and various other objectives, as mentioned in Section 30 of the Society registration Act 1860.

Benefits under Society Registration

  • A registered society gets a separate legal identity. Each member of this society is responsible for their actions and not the other members.
  • Limited liability – Since society NGO is a separate legal identity, the liability of members is limited to their share only.
  • Benefits on income tax.
  • Legal protection, nobody can use your name, and in case there is an issue as such, they will be large for a penalty.

Section 8 Company Registration:

The third way to register an NGO is by Section 8 of the Indian Companies Act, 2013. These companies are established to protect the charity, religion, trade, etc. But, the earnings of this company are not used by the shareholders, rather it is used by the company for promotion work. You can register the company as a public limited company (requires three directors) and a private limited company (2 directors).

Benefits of Section 8 company registration

  • There is no minimum capital requirement for establishing NGO as per section 8 company.
  • Similar to the trust, a Section 8 company also gets the special recognition of a separate legal entity.
  • One of the benefits that every NGO reaps is the benefit of tax. Apart from the stakeholders, the contributors to the NGO can also get tax exemption for the donation made to the NGO.
  • NGOs are exempted from stamp duty which is otherwise applicable for the registration process.
  • There is no title requirement. Moreover, section 8 companies are not required to use a suffix to its name, which the public limited or private limited company has to use.
  • There is better credibility. When compared with any other NGO structure, a Section 8 company is more credible. The central government does not govern section 8 company, and hence the MOA and AOA remain sacrosanct. Thus making its legal structure more trustworthy as compared to society NGO or trust.
  • Easy transfer of ownership is something that Section 8 Company enjoys. As per Section 8 of the Income Tax Act of 1961, people can transfer the ownership of both moveable and immobile assets without any restrictions.

How to register an NGO in India?

Registering an NGO in India is quick, easy, and can be done online with Vakilsearch in 3 simple steps:

  1. Right Entity Selection – We address all your queries pertaining to entity selection and guide you choose the most appropriate one.
  2. Online Paperwork – We help you get the entire process of filing and registration completed.
  3. Registration – We will register the NGO and handle all the formalities (Trust Act, Society Registrations Act or the Companies Act, depending on the entity chosen).

Wrapping it up:

Forming an NGO in India is a simplified process only if you have complete documents and other papers ready as per the protocol. However, the information mentioned above gives the details of different types of NGO registration in India and what are the different benefits of registration for the same. Therefore, the paperwork requirement may vary based on different types of NGOs that you want to register.

 

Types of NGO Registration and its benefits

488

If you are looking forward to start an NGO in India, then the first thing that you would require is NGO registration. Besides, you would also require information about the different NGOs in India. In this blog, we will explore different types of NGOs and what are their advantages. 

What are the different laws that govern NGO registrations in India?

The following laws govern the NGO registration:

  • Societies Registration Act, 1860
  • Indian Trusts Act, 1882
  • Section 8 company registration

Types of NGO Registration

There are three ways through which you can register NGOs in India:

  • Society registration
  • Trust registration
  • Section 8 Company registration

Purpose of registering NGOs in India

If you desire to serve society and help the people, then the best way to achieve this goal is by going for NGO registration. Various reasons for registering a society in India are:

  • These are self-governing bodies which aim towards the betterment of society by helping the poor and the needy
  • The ultimate goal of NGO is to help the underprivileged people and provide them with an opportunity for growth
  • Once you have defined the agenda of NGO, you can go ahead with NGO registration; there are several benefits that NGOs enjoy and will be discussed ahead.

Make your NGO more legal now

Non-Governmental Organization Registration

Trust Registration:

The registration for trust can be done via the Society Registration Act, 1882. These are public charitable trusts and are usually formed when the land or property is involved. Indeed, usually, the usage of trust is for the relief of poverty, education, medical aid, etc.

Advantages of Trust Registration

  • Trusts get land from the government
  • Trust registered under the Trust Act uses Gov. registered name
  • Tax benefits
  • 80G certificate benefit
  • White money for constriction of building
  • Benefit on service tax or income tax

Society Registration:

Another way in which you can register NGO is in the form of society. To form a society, the individual comes together for promoting scientific purpose, charitable purpose and various other objectives, as mentioned in Section 30 of the Society registration Act 1860.

Benefits under Society Registration

  • A registered society gets a separate legal identity. Each member of this society is responsible for their actions and not the other members.
  • Limited liability – Since society NGO is a separate legal identity, the liability of members is limited to their share only.
  • Benefits on income tax.
  • Legal protection, nobody can use your name, and in case there is an issue as such, they will be large for a penalty.

Section 8 Company Registration:

The third way to register an NGO is by Section 8 of the Indian Companies Act, 2013. These companies are established to protect the charity, religion, trade, etc. But, the earnings of this company are not used by the shareholders, rather it is used by the company for promotion work. You can register the company as a public limited company (requires three directors) and a private limited company (2 directors).

Benefits of Section 8 company registration

  • There is no minimum capital requirement for establishing NGO as per section 8 company.
  • Similar to the trust, a Section 8 company also gets the special recognition of a separate legal entity.
  • One of the benefits that every NGO reaps is the benefit of tax. Apart from the stakeholders, the contributors to the NGO can also get tax exemption for the donation made to the NGO.
  • NGOs are exempted from stamp duty which is otherwise applicable for the registration process.
  • There is no title requirement. Moreover, section 8 companies are not required to use a suffix to its name, which the public limited or private limited company has to use.
  • There is better credibility. When compared with any other NGO structure, a Section 8 company is more credible. The central government does not govern section 8 company, and hence the MOA and AOA remain sacrosanct. Thus making its legal structure more trustworthy as compared to society NGO or trust.
  • Easy transfer of ownership is something that Section 8 Company enjoys. As per Section 8 of the Income Tax Act of 1961, people can transfer the ownership of both moveable and immobile assets without any restrictions.

How to register an NGO in India?

Registering an NGO in India is quick, easy, and can be done online with Vakilsearch in 3 simple steps:

  1. Right Entity Selection – We address all your queries pertaining to entity selection and guide you choose the most appropriate one.
  2. Online Paperwork – We help you get the entire process of filing and registration completed.
  3. Registration – We will register the NGO and handle all the formalities (Trust Act, Society Registrations Act or the Companies Act, depending on the entity chosen).

Wrapping it up:

Forming an NGO in India is a simplified process only if you have complete documents and other papers ready as per the protocol. However, the information mentioned above gives the details of different types of NGO registration in India and what are the different benefits of registration for the same. Therefore, the paperwork requirement may vary based on different types of NGOs that you want to register.

 

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Senior Executive - Content in Vakilsearch | Former TEDxSKCET Licensee | Content Marketing | Psychology | Engineering (IT) | Google Developers Group (GDG) co-organizer | WTM Ambassador