NGO Registration

Overview of Online NGO Registration

A non-governmental organization (NGO) is a philanthropic entity aimed at enhancing society's well-being. In India, Online NGO Registrations are basically of three types, which are Trusts, Societies, and Section 8 Companies. Collectively, these non-profit organizations, including Trusts, Societies, and Section 8 Companies, are referred to as NGOs. In India, they are also known by the terms 'Sangathan,' 'Sangh,' and 'Sangam.' All non-profit NGOs in India enjoy income tax exemption. It is important to differentiate them from non-profitable businesses, which are conventional companies not making a profit. In common understanding, NGOs engage in a broad range of activities solely for the benefit of society. These activities encompass environmental, social, advocacy, and human rights work, among others. NGOs actively strive to foster social or political change on a larger scale and play a vital role in societal development, community improvement, and citizen engagement.

Registering Authority involved in the Online NGO Registration

The registering authorities for different types of organizations are as follows:
1.    For Trusts, the registering authority is the Deputy Registrar of the relevant area.
2.    For Societies, the registering authority is the Registrar or Deputy Registrar of Societies of the State.
3.    For Section 8 Companies, the registering authority is the Registrar of Companies (ROC) or Regional Director.
 

Regulations relating to online NGO Registration

The regulations relating to online NGO Registration are as follows:

1. Permanent Account Number (PAN) – A unique alphanumeric identifier, referred to as PAN, is assigned to every legal entity in accordance with the provisions of the Income Tax Act of 1961. This PAN number functions as the national identification number for these entities.
2. Tax Deduction and Collection Account Number (TAN) – TAN is a ten-digit alphanumeric account number used for tax deductions and collections. It is mandatory for individuals responsible for deducting or collecting Tax Deducted at Source (TDS). Non-profit organizations are also eligible for TAN and tax deductions.
3. Tax-deductible Donations under Section 80G: Donations made by individuals are eligible for tax deductions under Section 80G. This applies to charitable donations made to trusts, societies, and businesses registered under Section 8. The deduction percentage varies depending on whether the funds come from the government (100%) or non-government organizations (50%). NGOs need Section 80G registration to qualify for this deduction.
4. Registration under Section 12A: This registration allows non-profit organizations to claim income tax exemption. It is not mandatory but grants exemption for five years, requiring renewal every five years. Relief work engaged non-profit organizations are also exempt from customs duty on essential items like food, medicine, clothing, and blankets. Research equipment for research institutes is also duty-free.
5. Foreign Contribution (Regulation) Act of 2010: This act regulates the reporting of foreign contributions. All non-profit organizations in India, including public charity trusts, societies, and Section 8 businesses, must register before accepting any contributions from abroad. National-level registration with the government is mandatory.
    

The requirement of members as per the type of online NGO Registration

The minimum number of members needed to establish different types of NGOs is as follows:

• For Trusts, a minimum of 2 trustees is required to form a trust.
• For Societies, a minimum of 7 members is needed to establish a society.
• For Section 8 Companies, at least 2 directors and 2 shareholders are required. It is allowed for the same person to hold both the director and shareholder roles within the company.

Benefits of online NGO Registration

Below are the advantages of an online NGO Registration:

1. Tax Exemption: Registering the company as an NGO under the Companies Act, 2013 provides various tax benefits. NGOs are exempt from several taxes, enabling them to save money that can be utilized for further projects.
2. Right to Acquire Assets: Official registration allows the organization to acquire land, own fixed assets, and assume liabilities under its common seal. Unregistered organizations are not permitted to buy or hold/sell land.
3. No Minimum Share Capital Requirement: NGOs can operate independently without any minimum share capital requirement. They can be directly funded through charitable contributions, eliminating the need for a higher share capital.
4. Protection from Personal Liability: Registered NGOs can acquire and register assets and stakes in their name, protecting themselves from unlimited liability in case of adverse events such as foreclosure, bankruptcy, judgment debt, or divorce.
5. Transfer of Ownership: NGOs registered under the Companies Act, 2013, as per the Income Tax Act 1961, are not restricted from transferring ownership or claims of the interests earned.
6. Corporate Entity: As a corporate entity, the NGO experiences enhanced transactions and interactions with the community. Additionally, the NGO holds the ability to initiate or be subject to legal proceedings through its duly registered trustees, ensuring the enforcement of its legal rights.
7. Exemption on Stamp Duty: Section 8 companies registered as NGOs are exempted from stamp duty, leading to more tax-saving opportunities. The saved taxes can be invested in the organization's objectives, enhancing its functioning and productivity.
8. Structured Financial Plan: NGOs, being considered not-for-profit and tax-exempt, can develop a structured financial plan, allowing them to conduct business without tax liabilities.
9. Stability of Entity: Registration signifies effective and responsible leadership, making the NGO appear more stable to the public and attractive to potential partners, including political parties, government, donor agencies, financial institutions, charity organizations, and other NGOs.
10. Perpetual Succession: Registered NGOs enjoy perpetual existence, unaffected by the passing away or departure of their founder/trustees. Dissolution of the organization occurs solely through a formal court order.
11. Admission to Credit: Online NGO Registration enables access to credit from lenders and financial institutions. These loans can be utilized to bolster the organization's activities, facilitate mortgage financing, and acquire both land and fixed assets.
12. Name Preservation: Once registered, no one else can use the same or a similar name for an NGO in India. This protects the NGO's corporate image and name from unauthorized use.
13. Opening Bank Account: Having a corporate account with a bank signals transparency, making donors, government agencies, and other NGOs more comfortable in providing financial support. A registered NGO is eligible to open a bank account for this purpose.

Classification of NGO

NGOs can be classified into different categories based on the following levels during the online NGO Registration:

1. By the Level of Orientation
   • Charitable Orientation
   • Service Orientation
   • Participatory Orientation
   • Empowering Orientation
2. By the Level of Operation
   • Community-Based Organization
   • City-Wide Organization
   • National NGOs
   • International NGOs.

Types of NGO

The types of NGOs are as follows:

1. Trust Registration: Trust registration involves the formal establishment of a non-profit organization in India. Trusts are dedicated to supporting specific causes like education, healthcare, and community development. The process is governed by the Indian Trusts Act of 1882 and typically requires the expertise of legal professionals.
2. Society Registration: Society registration entails the formation of a group of individuals united by a shared objective. These societies are created to promote various causes, including charitable, religious, educational, scientific, literary, or social purposes. The process is regulated by the Societies Registration Act of 1860.
3. Section 8 Company: A Section 8 Company is a specialized non-profit organization registered under Section 8 of the Companies Act, 2013. It is established solely to promote commerce, art, science, religion, charity, or any other beneficial purpose, without the intent of generating profits. This category is also referred to as a Non-Profit Organization or Non-Governmental Organization (NGO).

Documents are Required for online NGO Registration

Essential Documents Required for the online NGO Registration:

Trust Registration:

1. Objective of the Trust Deed.
2. Particulars of the Trustee and Settlor (Self-attested copies of ID and Address Proof, along with occupation details).
3. Trust Deed with the appropriate Stamp Value.
4. Photographs of Trustee and Settlor.
5. PAN Card of Trustee and Settlor.
6. Documentation for the Trust's Registered Address. In the case of a rented property, a NOC from the Landlord is required.

Requirements for Societies Registration:

1. Name of the society.
2. Proof of address for the working space.
3. Identity proof for all nine members.
4. Two copies of the MOA and by-laws of the society.

Section 8 Companies Registration:

1. Copy of Identity Proof and Address Proof (including PAN Card).
2. DIR-2 (Consent of the directors) along with ID and Address proof.
3. Utility bill not older than 2 months.
4. Proof of registered office address.
5. No objection certificate is required if the registered office is not taken on rent.
6. Affidavit regarding deposits.
7. INC-14 - Declaration by Professionals.
8. INC-15 - Declaration by Promoters (INC-14 and INC-15 shall be on stamp paper, duly notarized).
9. Estimated Annual Income.
10. MOA and AOA.
11. Particulars of the promoters as well as Board Members of the proposed company.

Procedure

Depending on the type of online NGO Registration (Trust, Societies, and Section 8 companies), applicants are required to adhere to specific laws and procedures as prescribed in the corresponding act.

Online NGO Registration Procedure (As a Trust)

The procedure for registering a Trust involves the following steps:

1. Select an Appropriate Name: The first step is to choose a suitable name for the Trust. Ensure that the proposed name does not fall under the restricted list of names as per the provisions of the Emblems and Names Act, 1950.
2. Drafting of Trust Deed: Prepare the Trust deed, which contains all essential information related to the registration. The Trust deed must be presented before the Registrar during the registration process.
3. Selecting Settlors and Trustees of the Trust: Choose the settlor(s) and trustees for the Trust. There is no specific provision regarding the number of settlers/authors, but a minimum of two trustees is required to form a Trust.
4. Preparing Memorandum of Association: Formulate the Memorandum of Association, as it represents the charter of the Trust and is a crucial document for Trust registration.
5. Paying the Requisite Fees: Submit the necessary fee for Trust registration as per the prescribed guidelines.
6. Collection of a Copy of Trust Deed: After submitting the required documents, you can collect a certified copy of the Trust Deed from the registrar's office within one week.
7. Registrar Submission for Trust Deed: Provide a certified copy of the Trust Deed, accompanied by appropriately attested photocopies, to the local registrar.
8. Obtain the Registration Certificate: Upon submission of the Trust Deed, the registrar retains the photocopies and returns the original registered copy of the Trust Deed to the applicant. The registration certificate is issued within seven working days.

Online NGO Registration process for a Society

To register an NGO as a Society, the founding members must follow these steps:

1. Choose a Unique Name for the Society: While selecting a name for the Society, it is crucial to ensure uniqueness and non-identification with any existing entity. The proposed name should not suggest government patronage or violate the provisions of the Emblems and Names Act, 1950.
2. Prepare the Memorandum of the Society: When registering a Society, the applicant is required to draft the Memorandum of Society. This document, together with the Rules and Regulations of the Society, must be signed by each founding member and duly witnessed by an authorized official, such as an Oath Commissioner, Notary Public, Gazetted Officer, Advocate, Chartered Accountant, or Magistrate 1st Class, with their official stamp and complete address.
3. Prepare Required Documents: The applicant should arrange the following documents for Society registration, and each document must be duly signed:

• Name of the society.
• Address proof of the working space.
• Identity proof of all the members.
• 2 copies of the Memorandum of Association and by-laws of the Society.

1. File the Application: Submit the signed Memorandum and Rules and Regulations to the concerned Registrar of Societies in the respective State along with the prescribed fee.
2. Obtain Society Certification: Upon review and verification of the submitted documents, the Registrar will certify and officially register the Society, deeming it as a registered entity.

Online NGO Registration Process as (Section 8 Company)

To register an NGO as a Section 8 Company, the applicant should follow these steps:

1. Choose the Type of NGO: Select the type of NGO that aligns with the organization's goals and activities.
2. Choose a Unique Name: Select a distinctive name for the organization that reflects its purpose and is not already in use by another entity.
3. Draft the Memorandum of Association (MOA) and Articles of Association (AOA): Prepare the MOA and AOA, outlining the objectives, rules, and regulations of the Section 8 Company.
4. Notarize the MOA and AOA: Have the MOA and AOA documents notarized by a notary public to authenticate their validity.
5. Register with the Appropriate Authority: Complete the registration process with the relevant authority. The registration procedure may vary based on the type of NGO.
6. Apply for PAN and TAN: After successful registration, apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
7. Open a Bank Account: Once PAN and TAN are obtained, open a bank account in the name of the NGO for financial transactions.
8. Apply for Tax Exemptions: To avail tax exemptions, apply for registration under Section 12A and 80G of the Income Tax Act.
9. Register under FCRA (if receiving foreign funds): If the NGO intends to receive foreign funds, it must apply for registration under the Foreign Contribution (Regulation) Act (FCRA).

Advantages of online NGO Registration

Some of the advantages of online NGO Registration are as follows:
Registering an NGO as a Section 8 Company under the Companies Act, 2013, offers several advantages:

1. Tax Exemption: Section 8 Companies enjoy tax exemptions, allowing them to save money on taxes, which can be invested in further initiatives and social causes.
2. Ability to Purchase Assets: Legal registration permits the NGO to make real estate purchases, hold fixed assets, and incur liabilities, which is not allowed for unregistered organizations.
3. No Minimum Share Capital Requirement: Section 8 Companies can operate without a minimum share capital, relying on donations to finance their operations.
4. Personal Liability Protection: Acquiring assets and interests under the NGO's name provides protection against personal liability in unfortunate events like divorce, foreclosure, or bankruptcy.
5. Ownership Transfer: Section 8 Companies can legally transfer ownership or rights as per the Income Tax Act of 1961.
6. Corporate Entity: As a corporate body, the NGO's interactions and transactions with the community are improved. It can also initiate legal actions or defend itself if necessary.
7. Exemption on Stamp Duty: Section 8 Companies are exempt from stamp duty, allowing them to employ further tax-saving strategies and allocate more resources towards their objectives.
8. Structured Financial Plan: NGOs enjoy tax-free status, enabling them to design sound financial plans for tax-free operations.
9. Stability and Credibility: Registered NGOs are perceived as more stable and credible by donors, government, financial institutions, and other stakeholders.
10. Perpetual Succession: Section 8 Companies can exist indefinitely, continuing their work even after the founders or trustees' departure.
11. Access to Credit: Registered NGOs can obtain loans and financial assistance from lenders and banks to support their activities and growth.
12. Name Protection: Once registered, no other entity can use a similar name, protecting the NGO's brand and reputation.
13. Opening Bank Account: A registered NGO can open a corporate bank account, conveying transparency and credibility to potential donors and partners.

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