What is an NGO and how does it work

Last Updated at: April 13, 2020
263
What is NGO and how it works

Starting and running your NGO can be a very fulfilling thing to do. However, it requires more than just a good heart and idea. To run a successful NGO, not only do you need to be good with marketing your cause, but you also need to be wary of the legal implications involved. Therefore, starting an NGO requires adequate legal planning and a lot of hard work and a desire to help people. In many ways, running an NGO requires just as much skill as running a company, and sometimes, even more. Indeed, in this article, we will be taking a look at what an NGO is, and how it works.

 

  1. What is an NGO?

  2. What steps to follow when starting an NGO in India?

  3. The features of an NGO in India

  4. Which associations can act as an NGO in India?

  5. In what ways does NGO registration Occur in India?

  6. What are NGO Compliances?

  7. How to register an NGO with Vakilsearch

 

What is an NGO?

A Non-Governmental Organisation, better known as an NGO, is an association that is registered with the government and works for the upliftment of society. However, the association has a clear and definite program or cause, which it supports. Indeed, the causes an NGO supports may be cultural, religious, social or educational in nature. NGOs are commonly called Non-Profit Organisations as times by the general public.

What steps to follow when starting an NGO in India?

  1. First and foremost, decide what cause you want your NGO to work on and back-up.
  2. Draft clear statements regarding your NGO’s mission, vision, and objectives.
  3. Decide on a good Board of Directors who you feel will be able to lead the NGO properly.
  4. Try to include like-minded people so that the team works together at all times.
  5. Draft appropriate Memorandum and Articles of Association
  6. Decide on a good name, and then register your NGO
  7. Once you have undertaken the NGO registration, start trying to get funds for your NGO
  8. Grow your connections and try to build a wide and broad network

The features of a Non-Governmental Organisation in India

  • NGOs have a particular purpose or cause that they support.
  • NGOs are voluntary groups, created by like-minded people who want to help serve society.
  • They function as autonomous bodies, having only a little or no governmental interference.
  • NGOs have their own set of rules, regulations, and policies, depending on their cause.
  • NGOs are not profit-making or profit-sharing companies. Rather, they help in empowering and bettering our society.
  • They generate, create, and manage their funds via contributions and donations from the public.

Which associations can act as a Non-Governmental Organisation in India?

  1. A Trust composed of one or more people can sign up as an NGO, as per the Indian Trusts Act, 1982.
  2. Any company, club or association consisting of professionals can act as an NGO by registering under the Companies Act, 1956.
  3. It is to be noted that any society of people that aims to better society can sign up as an NGO as per the Societies Registration Act, 1860 by approaching the Registrar of the Societies.
  4. Moreover, any statutory body which hands out memberships to persons based on their stature.
  5. Also, any Charitable Trust can sign up as an Non-Governmental Organisation under the Charitable Endowments Act, 1920.
  6. Any other group, society or association that aims to uplift the society.

In what ways does NGO registration Occur in India?

The term NGO serves as an umbrella term that covers all legal entities that work with philanthropic and charitable aims. As per Indian laws, a Non-Governmental Organisation can function as either a Trust, Section 25 Company or Society. Non-Governmental Organisation registration occurs in India, in the following ways:

  • Trust Registration
  • Society Registration
  • Section 8 Company incorporation

Trust Registration-

  1. Formed when the owner of a property agrees that all the benefits from the property will be used for the upliftment of society
  2. The main aim of trust creators is to use the assets they have to empower society
  3. Indeed, does not normally have fixed beneficiaries
  4. Irrevocable without court or legal intervention

Documents Trust Registration

electricity/ water bill

Identity proof of two members

Society Registration-

  • Has valid Memorandum of Association, rules and other regulations
  • Is registered with the Registrar of Society/Commissioner of Trusts 
  • May alter their MOA or change their objectives from time to time
  • Indeed, all changes must reach the Registrar annually 
  • Termination via a clause in their Bylaws 

Documents for Society Registration

Name of the society

Address proof 

Identity proof of nine members 

Memorandum of Association 

By-laws of the society

Section 8 Company –

  1. Requires valid MOA and AOA f
  2. Registration comes under the Registrar of Companies, of the Central Government
  3. The process similar to the incorporation of Public/Private Limited companies
  4. Must conform to annual compliance measures other companies fulfil

Documents for Section 8 Company:

  1. Company name
  2. Address proof of the office
  3. Identity proof of Directors 
  4. Memorandum of Association 
  5. Articles of Association 

Make your NGO more legal now

What are Non-Governmental Organisation Compliances?

  • PAN- Moreover, after NGO registration, they must apply for a PAN
  • IT Act- After NGO registration, the Non-Governmental Organisation must register under Section 12A of the Income Tax Act to avail tax benefits. While this is not a mandatory clause, NGOs must do this, to be exempt from taxation.
  • Income Tax Compliance- Non-Governmental Organisations must also register themselves under Section 80G to allow their donors to be exempt from taxation on their donations. While it is not mandatory, it is highly advantageous to Non-Governmental Organisations.
  • FCRA- In case the Non Governmental Organisation accepts foreign funds, it must have registration from the Home Affairs Ministry’s FCRA division.
  • TAN- However, to remove taxation from source, NGOs must register for TAN.
  • GST Registration- In case the NGO does research or consultancy for gaining money, and that crosses a certain threshold, then the Non-Governmental Organisation must have GST registration.
  • Professional Tax- In case the NGOs want to deposit tax from employees by deducting their salary.

How to register Non-Governmental Organisation with Vakilsearch

Vakilsearch helps a Non-Governmental Organisation to register in 3 simple steps:

  1. Right Entity Selection – Our experts will guide you on which entity is best for you, based on your activity.
  2. Online Paperwork – All the documents are prepared online, in a simple and hassle-free manner.
  3. Registration – We will register the Non-Governmental Organisation under the appropriate law for you and handle all the formalities. (Trust Act, Society Registrations Act or the Companies Act, depending on the entity chosen)

 

0

What is an NGO and how does it work

263

Starting and running your NGO can be a very fulfilling thing to do. However, it requires more than just a good heart and idea. To run a successful NGO, not only do you need to be good with marketing your cause, but you also need to be wary of the legal implications involved. Therefore, starting an NGO requires adequate legal planning and a lot of hard work and a desire to help people. In many ways, running an NGO requires just as much skill as running a company, and sometimes, even more. Indeed, in this article, we will be taking a look at what an NGO is, and how it works.

 

  1. What is an NGO?

  2. What steps to follow when starting an NGO in India?

  3. The features of an NGO in India

  4. Which associations can act as an NGO in India?

  5. In what ways does NGO registration Occur in India?

  6. What are NGO Compliances?

  7. How to register an NGO with Vakilsearch

 

What is an NGO?

A Non-Governmental Organisation, better known as an NGO, is an association that is registered with the government and works for the upliftment of society. However, the association has a clear and definite program or cause, which it supports. Indeed, the causes an NGO supports may be cultural, religious, social or educational in nature. NGOs are commonly called Non-Profit Organisations as times by the general public.

What steps to follow when starting an NGO in India?

  1. First and foremost, decide what cause you want your NGO to work on and back-up.
  2. Draft clear statements regarding your NGO’s mission, vision, and objectives.
  3. Decide on a good Board of Directors who you feel will be able to lead the NGO properly.
  4. Try to include like-minded people so that the team works together at all times.
  5. Draft appropriate Memorandum and Articles of Association
  6. Decide on a good name, and then register your NGO
  7. Once you have undertaken the NGO registration, start trying to get funds for your NGO
  8. Grow your connections and try to build a wide and broad network

The features of a Non-Governmental Organisation in India

  • NGOs have a particular purpose or cause that they support.
  • NGOs are voluntary groups, created by like-minded people who want to help serve society.
  • They function as autonomous bodies, having only a little or no governmental interference.
  • NGOs have their own set of rules, regulations, and policies, depending on their cause.
  • NGOs are not profit-making or profit-sharing companies. Rather, they help in empowering and bettering our society.
  • They generate, create, and manage their funds via contributions and donations from the public.

Which associations can act as a Non-Governmental Organisation in India?

  1. A Trust composed of one or more people can sign up as an NGO, as per the Indian Trusts Act, 1982.
  2. Any company, club or association consisting of professionals can act as an NGO by registering under the Companies Act, 1956.
  3. It is to be noted that any society of people that aims to better society can sign up as an NGO as per the Societies Registration Act, 1860 by approaching the Registrar of the Societies.
  4. Moreover, any statutory body which hands out memberships to persons based on their stature.
  5. Also, any Charitable Trust can sign up as an Non-Governmental Organisation under the Charitable Endowments Act, 1920.
  6. Any other group, society or association that aims to uplift the society.

In what ways does NGO registration Occur in India?

The term NGO serves as an umbrella term that covers all legal entities that work with philanthropic and charitable aims. As per Indian laws, a Non-Governmental Organisation can function as either a Trust, Section 25 Company or Society. Non-Governmental Organisation registration occurs in India, in the following ways:

  • Trust Registration
  • Society Registration
  • Section 8 Company incorporation

Trust Registration-

  1. Formed when the owner of a property agrees that all the benefits from the property will be used for the upliftment of society
  2. The main aim of trust creators is to use the assets they have to empower society
  3. Indeed, does not normally have fixed beneficiaries
  4. Irrevocable without court or legal intervention

Documents Trust Registration

electricity/ water bill

Identity proof of two members

Society Registration-

  • Has valid Memorandum of Association, rules and other regulations
  • Is registered with the Registrar of Society/Commissioner of Trusts 
  • May alter their MOA or change their objectives from time to time
  • Indeed, all changes must reach the Registrar annually 
  • Termination via a clause in their Bylaws 

Documents for Society Registration

Name of the society

Address proof 

Identity proof of nine members 

Memorandum of Association 

By-laws of the society

Section 8 Company –

  1. Requires valid MOA and AOA f
  2. Registration comes under the Registrar of Companies, of the Central Government
  3. The process similar to the incorporation of Public/Private Limited companies
  4. Must conform to annual compliance measures other companies fulfil

Documents for Section 8 Company:

  1. Company name
  2. Address proof of the office
  3. Identity proof of Directors 
  4. Memorandum of Association 
  5. Articles of Association 

Make your NGO more legal now

What are Non-Governmental Organisation Compliances?

  • PAN- Moreover, after NGO registration, they must apply for a PAN
  • IT Act- After NGO registration, the Non-Governmental Organisation must register under Section 12A of the Income Tax Act to avail tax benefits. While this is not a mandatory clause, NGOs must do this, to be exempt from taxation.
  • Income Tax Compliance- Non-Governmental Organisations must also register themselves under Section 80G to allow their donors to be exempt from taxation on their donations. While it is not mandatory, it is highly advantageous to Non-Governmental Organisations.
  • FCRA- In case the Non Governmental Organisation accepts foreign funds, it must have registration from the Home Affairs Ministry’s FCRA division.
  • TAN- However, to remove taxation from source, NGOs must register for TAN.
  • GST Registration- In case the NGO does research or consultancy for gaining money, and that crosses a certain threshold, then the Non-Governmental Organisation must have GST registration.
  • Professional Tax- In case the NGOs want to deposit tax from employees by deducting their salary.

How to register Non-Governmental Organisation with Vakilsearch

Vakilsearch helps a Non-Governmental Organisation to register in 3 simple steps:

  1. Right Entity Selection – Our experts will guide you on which entity is best for you, based on your activity.
  2. Online Paperwork – All the documents are prepared online, in a simple and hassle-free manner.
  3. Registration – We will register the Non-Governmental Organisation under the appropriate law for you and handle all the formalities. (Trust Act, Society Registrations Act or the Companies Act, depending on the entity chosen)

 

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