NGO registration is the most important requirement if you are planning to start an NGO in India. Further, you would like to know what types of NGOs can be recognized in India. When you have decided, find out if it meets your needs. Once you have the NGO registration done, you can move forward with your plan. This blog explores diverse types of NGOs and their benefits.
NGO Registration Laws in India
NGOs in India can be listed in three ways:
- Society registration
- Trust registration
- Section 8 Company registration
NGO registration objectives in India
In order to serve society and help the people of the country, NGO registration is the ultimate goal.
The following are some reasons for registering an NGO in India:-
- A self-governing organization aims to help the deprived and improve society by helping the needy.
- An NGO’s ultimate goal is to provide opportunities for growth and prospect to disadvantaged people.
- Once you have a distinct list of NGOs, you can proceed with NGO registration. NGOs appreciate a number of benefits and are going to be discussed further.
India’s Non-Governmental Organization Registration Outlook
- Trust Registration:-
Registration for trusts can be completed under the Indian Trust Act, 1882. Public charitable trusts usually involve land or property in these types of trusts. Faith is typically used in the relief of poverty, medical aid, and education.
Benefits of Trust Registration
- Government agencies can provide land to trusts
- There is no law that governs Public Charitable Trusts in most Indian states. The Public Trusts Act is present in many states, including Madhya Pradesh, Maharashtra, Gujarat, and Rajasthan.
- A Trusts Act-registered NGO may use the word “government.”. Regd.” or ‘Regd.’
- There are quite a few tax benefits they receive, such as income tax, etc.
- Under the Income Tax Act, 80G certificates are tax-deductible
- A trust can obtain white capital for the construction of a building.
- Tax benefits related to entertainment and service taxes, etc.
- Society Registration:
The system of society is another way in which you can register an NGO. According to Section 30 of the Society Registration Act of 1860, a society is formed when individuals join together for a scientific, charitable, or educational purpose.
Benefits under Society Registration
The following benefits are available to NGOs registered under the Society Registration Act, 1860:
- Income tax exemption
Society registration is similar to an NGO registration, but there are benefits to it as well. It allows the firm to avoid paying income taxes, and Income Tax Exemption is something every business owner desperately seeks.
- Separate legal identity
The legal status of an NGO is separate from that of a corporation, which is one of the advantages of society registration. Each member of this society is responsible only for their own actions. Because of this distinction, the members of such NGOs are only responsible for the activities they undertake.
- Limited Liability
NGO Society is a separate legal entity from its members. As a result, each member’s liability is limited to their share only. As a result, the firm’s liabilities cannot be settled with the members’ assets under any circumstances. In society NGOs, members are only responsible for their share since they have a separate legal identity.
- Legal protection
The Society Registration Act, 1860, provides you with legal protection once your society is registered. This means that no one else can use your company name, your assets, etc. A violation would result in punishment for anyone who is found responsible.
- Section 8 Company Registration:
The third way to register an NGO is through Section 8 of the Indian Companies Act, 2013. Trade, religion, charity, and other interests are protected by these companies. This company’s earnings, however, are used by the company for promotion work rather than by its shareholders. Alternatively, you can register the company as a public limited company (which requires three directors).
Benefits of Section 8 company registration
Section 8 company registration can benefit NGOs in many ways.
Those are as follows:-
- No minimum capital requirement
The section 8 company does not require a minimum capital for the creation of an NGO. A section 8 company does not have a prescribed minimum capital requirement like a public limited company. In any case, the capital structure of the firm can be modified as the business grows.
- Separate legal entity
A Section 8 company is also distinguished as a ‘separate legal entity.’ It, like a Private Limited and other limited companies, continues to exist independently from its members. Moreover, Section 8 Company continues to exist.
- Tax exemption
NGOs receive the benefit of taxation as one of their advantages. NGOs’ contributors can also receive tax exemptions for donations given to them by stakeholders. It is one of the most significant advantages that NGOs registered under Section 8 Companies have, especially those that subscribe to them. This type of NGO also allows contributors to claim tax exemptions on donations.
- No stamp duty payable
A non-profit organization is exempt from stamp duty formalities unless it is required for registration. In addition, such NGOs do not have to pay stamp duty appropriate for registration, similar to that applicable to public limited companies and private limited companies.
- No title needed
The title is not demanded. In addition, section 8 companies do not have to use a suffix to their names, which is required of public limited companies and private limited companies. Section 8 companies do not have to add a suffix to their titles, unlike private limited and public limited companies.
- Better reliability as compared to others
There is a greater degree of reliability. The Section 8 company is more reliable than any other NGO structure. Since the central government does not administer section 8 companies, the MOA (Memorandum of Association) and AOA (Article of Association) remain in place. Thus, it makes its legal structure more reliable compared to trusts or NGOs.
- Security of ownership or title transfer
Section 8 Company values secure ownership transfers. In accordance with Section 8 of the Income Tax Act of 1961, people may transfer ownership of moveable and immobile assets externally without restriction. Section 8 company registrations offer many additional benefits, besides the above-mentioned advantages, such as exemption from income tax, a shorter notice period for general meetings than 21 days, and other benefits.
How should we go about it quickly?
The process of registering an NGO in India is quick, easy, and can be completed online within three steps:
- Determination of Right Entity – Vakilsearch will assist you in determining the right entity and direct you to the most appropriate solution.
- Documentation with Online Guidance – Vakilsearch will guide you through the entire filing and registration process.
- Listing out of Entity – Vakilsearch handles all registrations (Trust Act, Society Registrations Act, or the Companies Act, depending on the entity determined).
In India, forming an NGO is a simple process if you have the required documents and papers. The data above provides details about different types of NGO registration in India and the benefits of cultivating them. You may need to submit different types of paperwork depending on the type of NGOs you want to register.
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