Why is NGO Registration important in India?

Suppose anyone wants to form or establish a Non-Profit Government Organization (NGO) in India for the improvement and betterment of society. In that case, it is recommended to register NGOs, and it enables you to be evident in the law’s eyes. NGOs are mainly engaged in cultural, legal, social, and environmental activities without any motive of profit. Three different laws govern NGOs registration in India, such as the Societies Registration Act, 1860, Indian Trusts Act, 1882, and Section 8 Company Registration under Companies Act, 2013. Scroll down to check more information regarding the importance and benefits of NGO Rfngo registration in India.

What are the key features of NGOs in India?

Following are some key features of NGOs in India:

  • The main objective of creating a Non –Profit Government Organization is for the betterment of society. NGOs also provide some to underprivileged people and give them a chance to grow.
  • They influence arts, poverty, education, environment, and other areas which are not sustainable through a for-profit business model.
  • NGOs are governed and controlled by a group of peoples or individuals, a board of trustees.
  • NGOs are independent of the state.
  • In India, Non –Profit Government Organizations create and maintain their funds, and they often collect contributions donates by the public. International authorities finance some NGOs.
  • They are conducting different programs to improve youth and bring out their talents.
  • It provides some training in different fields and provides some technical support.
  • NGOs help in times of natural disasters such as earthquakes, tsunami, etc.
  • They also conduct various environmental activities such as planting trees, preserving water, reduce air pollution, etc.

Types of NGO Registration in India

There are three different types of NGO registration in India, and you can check the same below:

Types of NGO Registration India

Trust Registration

Trust registration is regulated under the Indian Trusts Act, 1882. These trusts are for public charities and are usually formed when the property is involved. The usage of this is for education, medical, poverty, etc. To register as a trust in India, you need to submit the following documents:

  • Address proof such as the latest water bill or telephone bill or electricity bill, etc.
  • Identity proof such as driving license, aadhar card, voter id etc.

Society Registration

This registration is governed under the Societies Registration Act, 1860. Society is mainly formed for the promotion of arts, commerce, and science. All the activities conducted by the society are non-commercial and for non-profit purposes. To register as a society in India, you need to submit the following documents:

  • Name of the society.
  • Identity proof and address proof.
  • Submit a copy of MOA (Memorandum of Association) and AOA (Article of Association) of the society.

Section 8 Company Registration

This registration is regulated under the Companies Act, 2013. Section 8 Company is mainly formed for the promotion of education, crafts, sustainability development, and environmental activities. All the Private Limited Companies comes under Section 8 of the Companies Act. To register as a section 8 company in India, you need to submit the following documents:

  • Company’s Name for approval.
  • Identity proof of all the designated directors of the company and address proof of all the directors of the company.
  • MOA and AOA of the company.

What are the benefits of NGO Registration in India?

Following are the benefits of NGO registration under Trust registration, Society registration, and Section 8 Company Registration in India:

Benefits come under Trust Registration in India:

  1. Trusts can get land from the Government of India.
  2. 80G certificate benefits under the Income Tax Act.
  3. Tax benefits such as Income Tax, Service Tax, Entertainment Tax, etc.
  4. An NGO registered under Trust Act can uses “Govt. Regd.”/ “Regd.” word.
  5. They can get white capital for the construction of the building.

Benefits come under Society Registration in India:

  1. Separate Legal Entity: NGO registration under Society Registration Act, 1860 has a separate legal entity in law’s eyes. Each member of society is responsible for their actions.
  2. Income Tax Exemption: NGO registration is done under Society registration is saved from paying income taxes.
  3. Provide legal protection: Once the NGO registration is done under society, then you will be provided with legal protection. It means no other company can use or misuse your company’s name and your assets. If anybody found it, then it would be subjected to punishment.
  4. Limited Liabilities: NGOs under society has a separate legal entity for its members, so the liabilities of the members is limited to their shares only.

Benefits come under Section 8 Company Registration in India:

  1. No title needed: NGO registration under Section 8 companies act, do not need to us suffix to its name, which the private or public limited company has to apply. In a public or private limited company, where the names or titles of the company are obligations, but a section 8 company does not need to use a suffix to its title.
  2. Tax exemption: The contributors can receive tax exemption for the donation, and it is one of the best advantages that NGOs receive is the tax benefits.
  3. No minimum capital requirement: There is no need for minimum capital for creating an NGO under the Section 8 Company Act. The capital structure can be revised at any time, which is important for business growth.
  4. No stamp duty payable: NGO registration under Section 8 Company is exempt from stamp duty formalities, which is unless applicable for the registration process.
  5. Better reliability: The structure of NGOs under Section 8 Company is more reliable as compared to others.
  6. Security of ownership: In Section 8 Company, there is a secure transfer of ownership. People can transfer the ownership of moveable and immobile assets without any restrictions.

What are the limitations of NGOs in India?

Following are some limitations of NGOs in India:

  • The volunteers are lack of training in facing and handling the problems concerning people.
  • Most of the NGOs in India are suffering from a lack of financial resources.
  • Mismanagement of funds.
  • The increasing number of NGOs has created an unhealthy competition.
  • NGOs in India is operated in a limited territory only.
  • Lack of Government control.

Conclusion

From above it is cleared that NGO registration is very important for those individuals who want to establish an NGO in India. Registration of a Non-Profit Government Organization is an easy process if you have all the essential documents and other papers as per the rules.

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Author
My name is Avneet Singh and I am working with Swarit Advisors. We are providing all types of Legal & Financial advisory services and helping customers improve their startups and MNC in solving legal, Taxation rand compliance related to starting and running their business around the world. Our Headoffice is in Noida, India and we Swarit Advisors cover all the legal requirements of industries, such as Company incorporation in more than 50+ Countries.

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