NGO Registration Process
A Non-Governmental Organization (NGO) is a non-profit organization, a group or entrepreneurship of activists, individuals, voluntary, and social persons working for a charitable cause.
NGO Registration Process
An NGO is a nonprofit organization whose main motive is to do charity for the improvement of society. You can start it as a society, a trust, or a non-profit company under section 8 of the Companies Act that depends on the occupation you desire to take. NGO is crucial for every non-profit organization, including society, trust, and companies under section 8 in India. You can avail of exemption in Income Tax for all NGOs (Non-profit organizations). NGO registration is essential in India for gaining some notable benefits that are discussed below.
Need NGO Registration in India
- If you want to run an NGO, you need to open a bank account under the name of the NGO. For opening an account, it is compulsory to get registration under a society, trust, or a company of section 8.
- An NGO registration obtains legal status & is responsible for receiving funds. For example, when funds are donated to a charitable trust, it is collected under organization’s name & used for charitable activities. But in an unregistered firm, the funds are collected under anyone’s name & after that, they can be used for their own profit.
- The NGO registration is required for availing of Income Tax exemption.
- An NGO registered organization fortifies the legal, social, and ethical norms of society.
Important documents for online NGO registration
Particular document submission is necessary before the delivery of the registered deed to the NGO.
To register a society, some of the papers are necessary:-
- Society’s name
- Office’s address proof
- All 9 members’ identity proof, including Aadaar card, Voter ID, Copy of Passport, Driving License, and 2 copies of by-laws of society and memorandum of association.
To register a trust, some of the papers are necessary:-
- An electricity bill or water bill for the address proof is needed to be registered.
- At least 2 company members’ identity proof can be Aadhaar Card, Passport, Driving License, or Voter ID.
After the registration payment process is over, it takes around eight to ten days to complete online registration under the Indian Trust Act 1882. The settler should deliver the presentation at the registrar’s office before the deed flatters valid all over the country.
Section 8 Company
To register section 8 company, some of the papers are necessary:-
- Company’s name for approval
- Office’s address proof which can be water bill or electricity bill or receipt of house tax.
- All directors’ identity proof, including voter ID, Aaadaar card, Copy of Passport, Driving License, or Company’s Articles of association & Memorandum of Association.
After the registration payment process is over, it takes around eight to ten days to draft the AoA and MoA of the society. Furthermore, it takes around two months for the completion of the complete registration of the company.
What are the advantages of NGO Registration in India?
No Minimum Share Capital Demand
For functioning independently, there is no demand for minimum share capital. There is a direct fund for NGOs with the charity amount that is given to them. This refers to that NGOs don’t require higher share capital for functioning independently.
Assist Tax Exemption
Doing registration of NGO company under Companies Act, 2013 assists in utilizing various benefits from taxation. There are various exemptions for NGOs that result in helping the company save money and utilize it in further projects.
Safeguard from Personal Liability
A person can purchase, obtain, and register assets & stakes in the name of their NGOs. This way is better for protecting from unlimited liability by hand for an unexpected incident like divorce, judgment debt, bankruptcy, foreclosure, etc.
Right to Obtain Assets
Meanwhile, your organization is registered officially; after that, it can obtain its own fixed assets, land, or liabilities under the usual seal. For an unregistered organization, it opposes the law to hold, buy, or sell land anywhere.
Your organization’s engagements and transactions will improve with the community as a corporate body. For enforcing their legal rights, NGOs can prosecute or be sued by the trustees that are registered already.
As written in the Income Tax Act, 1961, the NGOs registered under the Companies Act, 2013, there is no restriction to claim the earned interest or transfer their ownership.
Structures Financial Plan
An NGO can carry a tax-free process for the operations you are doing under a registered NGO. They are examined tax exempted and non-profit organizations. A structured financial plan can be developed that permits the organization to do business lacking tax liabilities.
Stamp Duty Exemption
As per the Income Tax Act, NGOs get exemption from stamp duty resulting in saving the tax more for the company. The taxes that are saved from the stamp duty are used to promote the objectives that the company absorbs. It also helps protect the company’s funds, helping it in smooth functioning of the company and increasing the company productivity.
Perpetual Succession means that the NGO goes on a lifetime and will remain to exist even if the trustees or founders leave or die. The organization’s continuation will cease only if it is wound up formally by the Court’s order. It permits perpetual succession along with other advantages.
Stability of Entity
The NGO’s registration can advise that there is responsible and effective leadership in place. The same will be recognized as being steady than an unregistered organization. For further common objectives, charity organizations, financial institutions, donor agencies, government, political parties, & other NGOs, for further common objectives desire to be a partner with a registered firm.
In India, when your organization becomes registered, nobody can use a similar name all over the country. This gives the advantage to protect your corporate name and image from outlaw use.
Admission to Credit
NGO registration can manage an approach to credit from financial institutions and lenders. A loan facility can be used for organization activities, fixed assets, acquire land, and finance a mortgage. Bank desires to view registration proof with a condition model to provide a loan.
Opening Bank Account
For the NGO, you should open a corporate bank account. Some donor agencies, government, private persons, and other NGOs do not write cheques for the organization in your name. An NGO’s bank account denotes its corporate existence & its preparedness for receiving donations. You had to prove to the organization that it is registered for opening a bank account in its name.