Registration of NGO

DEFINITION OF NGOs

"“NGO may be defined as association having a definite cultural, Educational, economical, religious or social as its main objective. They are not owned by any one and cannot distribute its profit/surplus as such. Whatever, profit/surplus they may earn from economic activities are reinvested or spent on appropriate non-profit activities. The typical sources of revenue of non government organizations are donations, grant, gift, membership fee and interest on investment”. Now a days, the word NGO denotes to registered trust, societies, cooperative societies, endowments, non-profit companies, etc. working for the welfare, development and progress of public at large and in a way supplement to similar functions being carried out by the government and hence, called as Non-Government Organizations (NGOs)."

WHAT IS TRUST?

"The public charitable trust is one of the possible form of not-for-profit entity in India. Typically, public charitable trusts can be established for various purposes, including the relief of poverty, education, medical relief, provision of facilities for recreation, and any other object of general public utility. Public Trusts are generally irrevocable."

"Typically, a public charitable trust must register with the office of the Charity Commissioner having jurisdiction over the trust (generally the Charity".

"Commissioner of the state in which the trustees register the trust) in order to be eligible to apply for tax-exemption. In the metro city of India, Trust can be registered in the office of Sub-Registrar."

WHAT IS SOCIETY?

"Societies are membership organizations that may be registered for charitable purposes. Societies are similar in character to trusts, although there a few essential differences. While only two individuals are required to form a trust, a minimum of seven individuals are required to form a society. The applicants must register the society with the state Registrar of Societies having jurisdiction in order to be eligible to apply for tax-exempt status. Societies are usually managed by a governing council or a managing committee. In general, Indian citizens serve as members of the managing committee or governing council of societies, although there is no prohibition in the Societies Registration Act against non-natural legal persons or foreigners serving in this capacity. Societies are governed by the Societies Registration Act 1860, which has been adapted by various states. Unlike trusts, societies may be dissolved."

"SECTION 8 COMPANIES UNDER COMPANIES ACT 2013 ERSTWHILE SECTION 25 COMPANIES UNDER COMPANIES ACT, 1956"

"Any person or an association of persons intending to be registered as a limited company for charitable purpose can apply for registration of Section 8 Company to the Registrar of Companies of respective state where the promoters intent to have registered office of the company. At least TWO individuals are required to form this type of company. The founders or promoters must submit application to the Regional Director of the Ministry of Corporate Affairs. The application must include copy of Memorandum and Articles of Association of the proposed Company, a statement of assets a brief description of the work proposed to be done upon registration and other documents as prescribed under the Law. A firm can be a member of a section 8 Company."

"However, it shall have to prove to the satisfaction of the Registrar of Companies that :-"

a) Its objects includes promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;"

b) The company on incorporation intends to apply its profits/surplus, if any, or other income in promoting such object; and" c) the company prohibit the payment of dividend to its members.

"The Registrar on being satisfied after having objection from public at large or any other authorities and regulatory bodies at its discretion, may grant the" "licence to the Company and such licence may contain conditions as may be deemed necessary by the Registrar. The Registrar may direct the company to insert in its memorandum, or in its articles, or partly in one and partly in the other, such conditions of the license as may be specified by the Registrar in this behalf. Section 8 Company shall enjoy all the privileges and be subject to all the obligations of limited companies under the Companies Act, 2013." "To alter the provisions of its memorandum or articles of association, section 8 company will have to obtain previous approval from the Central Government. These companies must apply its surplus, if any, or any other receipts for the promotion of its objects, and may not pay a dividend to its members." The internal governance of a section 25 or Section 8 company is similar to that of a society. It generally has members and is managed by directors or a managing committee or a governing council elected by its members.