A Non Governmental Organization is perceived to be a body of individuals or an association of persons. An association of persons with non-profit motive may be registered under any of the following Indian Acts:
AS A CHARITABLE TRUST
The public charitable trust is a potential form of not-for-profit entity in India. Normally, public charitable trusts can be established for a number of purposes, including the relief of poverty, education, medical relief, provision of facilities for recreation, and any other object of general public utility. Indian public trusts are usually irrevocable. No national law governs public charitable trusts in India, although many states (particularly Maharashtra, Rajasthan, Gujarat and Madhya Pradesh) have Public Trusts Acts.
A Trust can be created by any person competent to contract or even by a manner with the authority of a competent court and respect of any property which is transferable and over which the author of the trust has dispossessing power.
A Trust may be private and public. When the purpose of the trust is to benefit an individual or a group of individuals or his or their descendants for any legal person and who is capable of holding property, it is a private trust. When the purpose of the trust is to the benefit the public or any section of the public, it is public trust.
A trustee can be any person that is, an individual or a corporate body or a corporate sole, capable of holding property and competent to contract and he must accept the trust.
AS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT
Societies are membership organizations, which may be registered for charitable purposes. Societies are generally managed by a governing council or a managing committee. Societies are governed by the Societies Registration Act 1860, which has been adapted by different states.
NGO OR SOCIETY: There is two type of Society and NGO’s in India – State label and All India label. Before registering the NGO or Society you should know about the difference between both of them.
STATE LABEL : To register the Society or NGO at State Label. You will have to provide the ID proof of Seven Member’s (DL | Copy of Passport | Voter ID). You will have to provide Two Members (President – Treasurer or Secretary – Treasurer) form Delhi and another Five Member’s can be from any states. Two set of MOA of NGO or Society.
ALL INDIA LABEL : To register the Society or NGO at all India Label. You will have to provide the ID proof of Nine Member’s (DL | Copy of Passport | Voter ID). You will have to provide Two Members (President – Treasurer or Secretary – Treasurer) form Delhi and another seven Member’s from Seven different states. Two set of MOA of NGO or Society.
AS A COMPANY LICENSED UNDER SECTION 25 OF THE COMPANIES ACT
A section 25 company is a company with limited liability that may be formed for “promoting commerce, science, art, religion, charity or any other useful object,” provided that no profits, if any, or other income derived through promoting the company’s objects may be distributed in any form to its members. The Indian Companies Act, 1956, which principally governs for-profit entities, permits certain companies to obtain not-for-profit status as “section 25 companies.” A section 25 company may be formed for “promoting commerce, art, science, religion, charity or any other useful object.” A section 25 company must apply its profits, if any, or other income to the promotion of its objects, and may not pay a dividend to its members. At least three individuals are required to form a section 25 company. The founders or promoters of a section 25 company must submit application materials to the Regional Director of the Company Law Board. The application must include copies of the memorandum and articles of association of the proposed company, as well as a number of other documents, including a statement of assets and a brief description of the work proposed to be done upon registration.
Objectives of a Non-Profit company
Objectives of a non-profit company can be including promotion of commerce, art, science, religion, charity or any other useful object. Profits are applied for promoting only the objects of the company and no dividend is paid to its members. (Section 25 (1) (a) and (b) of the Companies Act, 2013). A non-profit company may be Public or Private. If the non-profit company is a private company, minimum of only two members are required to form it. However, if the non-profit from is for a public purpose, then a minimum of seven are needed. A ‘Section 25 company’ and is eligible for certain exemption from provisions of law and concessional rate of fees etc.
Steps for establishing a section 25 company
- Application for a name
- Memorandum and Articles
- License under section 25
- Registration with ROC
Register the NGO
THE NGO’S NAME: Check to see if the proposed name of the organisation is already in use. Check with the local government registry or similar agency/board to see if your proposed name is already taken. It may be necessary to provide two or three optional names for the NGO! This also applies to the logo of the NGO, if you plan to use one.
REGISTERING OR INCORPORATING WITH THE LOCAL AUTHORITY: It will be necessary to incorporate the organisation within its given local government/agency by writing and filing the necessary forms. In larger cities and towns in India, there could be and normally are separate authorities for registrations of Societies (Registrar of Co-operative Societies, trust (Charity Commissioner) and Companies (Registrar of Companies). However, in smaller towns and district headquarters, there could just be one Registrar who is common for all of these duties. So you will need to find out the local authority responsible for registration of your type of organisation at your location.
In most other countries also, there are specialized departments or officers within local governments that deal with registering an NGO (which may also be called by other different names: non-profit organisation, voluntary organisation, people’s organisation, etc.)
There are several documents that need to be submitted, and these differ from country to country and also on the type of organisation. Information on the NGO Board, its mission statement, purpose, programmes and projects information, staff members, funding sources etc. will be necessary in all cases, whatever the type of organisation.
A typical set of documents to be submitted to the appropriate authority for registering an NGO includes – Memorandum of Association, Bye-laws or Trust Deed, including applicable rules and regulations; report of annual activities, financial reports/audit reports; sources and pattern of income and expenditure; minutes of the Board or General meeting of members that endorses the setting up of the NGO; funding sources, letters of support etc. .
While it is critical that a new NGO ensures that it is properly registered with the public authorities of the country, it is of even more importance to ‘register’ with its target community – in terms of ensuring acceptability, building trust, chalking out effective programmes and projects and being the harbingers of real and measurable change.