Have you been wondering how to turn your good intentions into good actions? Starting an NGO might just be the answer you’re looking for. Keep reading for a comprehensive guide on starting an NGO in India.
|Various Non-Government Organisations (NGOs) in India have teamed up with TikTok, the popular short video app, to reach out to their target audience. NGOs have launched campaigns on TikTok to spread awareness about their causes.|
In India, work in the social sector is anchored by non-governmental organisations (NGOs). These organisations are crucial to supporting the poorer classes of society and weaker aspects of our economy that are often neglected by the government. Therefore, it is often said that NGOs do work that a wealthy welfare state would take up. In India, on the other hand, NGOs, more often known as charitable organisations, survive on the donations made by the wealthier sections of society.
Starting an NGO
One can register an NGO in India under the three acts in India: Indian Trust Act, 1882, Societies Registration Act, 1862 and Companies Act, 2013. However, before commencing the registration process, one needs to:
- Formulate the mission and vision of the NGO. Just as you would require for a company, an NGO needs to have goals and a mode for achieving those goals
- Form a governing body, which is one of the first steps in the NGO start-up process.
Get in touch with our experts to know more about how to commence an NGO in India.
Forming a Governing Body
To form an NGO a governing body needs to be set up. This body is required to look into the functioning of the NGO and its activities. Moreover, they must look into matters of financial management, human resources and planning.
The governing body must also decide on strategies pertaining to the fund-raising and management of the organisation, as well. Typically, the governing body is the most important element of an NGO, as an organisation that relies on charitable donations must have a well-respected set of individuals at the helm.
Trust Deed Documentation
Before registering the NGO, the governing body must frame its own bylaws, memorandum of association (in case of Section 8 company) or trust deed, which will contain the name and address of the NGO, details of members, rules and regulations and a set of administrative laws it operates according to.
Registration of an NGO
An NGO can be registered under three Acts in India, depending upon the modes of operation. Each Act lays down certain laws and regulations to facilitate the management and functioning of a non-profit organisation.
One-click away to know more about the pros of registering under 12A and 80G for an NGO.
Indian Trust Act
Every state in India has different Trust Acts, and those states without a distinct Trust Act, are governed by the Indian Trust Act, 1882. Additionally, NGOs are usually registered under this Act if the property is involved (let’s say the building of schools or hospitals).
A trust deed, with all essential information about the trust’s financial management and fund collection details, is mandatory for registering under the Indian Trust Act, 1882.
An application for registration is to be moved to register such an NGO. In case of a trust, a form is to be filled and the applicant has to affix a court fee stamp and a nominal registration charge is to be paid which depends upon the value of the property. Likewise, the application form is to be submitted along with the trust deed.
Societies Registration Act, 1862
The most convenient way of setting up an NGO is through Societies Registration Act, 1860. Section 20 of the Societies Act clearly specifies which organisations and societies can be registered under this Act. Moreover, registration of an NGO under the Societies Act can be done at the state or district level.
A minimum of seven managing committee members is required to form a Society under this Act. Moreover, these members will be designated as president, vice president, treasurer, director and members.
In the case of a society, registration can be done at the state or district level. Moreover, the procedure varies from state to state, but, usually, the memorandum of association, rules and regulations, consent letter of all the members along with ID proofs, and an affidavit from the president are required.
Indian Companies Act, 2013
An organisation can be registered under Section 8 of the Companies Act, 2013 ‘for promoting commerce, art, science, religion, charity or any other useful object’. Profits from such an organisation must, however, be used for the further development of the company and not be paid as dividends to its members.
A minimum of three members (no upper limit) is mandated and a memorandum of association according to which the charitable company will function is required.
In the case of a company, an application is to be filled to check for the availability of the name of the company. Once the availability of the name is confirmed, the incorporation process is continued through the Spice + form.
An application is also given to the company law board along with the memorandum of association, and a declaration by an advocate to assure that the memorandum of association complies with the Act. The applicant has to also publish an advertisement in two newspapers (one in the regional language and another in an English newspaper) circulated in that district.
Apart from registration under the three acts, if an NGO wants to open an office in tribal areas or locations which require special permission, or employ foreign nationals, they require a special licensing, like the Shops and Establishments Act (for opening an office), inner line permit (for opening offices in tribal and restricted areas), FCRA registration and a no-objection certificate, with work visa (for employing foreign nationals).
Also, if any foreign national or an international NGO wishes to set up an office in India they need to seek special permission from the Reserve Bank of India and a no-objection certificate from the concerned departments before registration under any one of the above-mentioned acts.
Moreover, if an NGO wants to seek tax exemption, they have to file an application along with their annual report to acquire 80G certification. Get in touch with our experts to know more!