Society (NGO) Registration

A Non-Governmental Organization (NGO) is defined as a group or organization focused on a specific social cause or program, aimed at enhancing societal welfare. Unlike for-profit businesses or government entities, NGOs operate independently and voluntarily to advance various agendas, including cultural, social, educational, and religious initiatives.

While NGOs can function without formal registration, those that are registered with government authorities can access financial resources. The registration process varies based on the NGO's structure, as it can be established as a Society, Non-Profit Company, or Trust. In India, there isn't a singular act governing NGO registration; rather, three key laws guide this process:

1. Societies Registration Act (1860)
2. Companies Act (2013)
3. Indian Trusts Act (1882)

This article explores the requirements and procedures for registration under each of these three legal frameworks.

1. Registration of an NGO as a Society

A Society is legally recognized as an association or group of individuals working together for a common cause without seeking monetary profit. Typically, Societies are established for scientific, literary, or charitable purposes. The registration procedure for Societies is outlined in the Societies Registration Act, 1860.

Eligible Purposes for Society Formation:

According to Section 20 of the Societies Registration Act, the following objectives qualify for Society registration:

• Charitable assistance
• Promotion of literature and science
• Support for fine arts and public museums
• Establishment of public libraries or reading rooms
• Maintenance of natural history collections
• Promotion of philosophical and mechanical inventions

Procedure for Society Registration:

1. Name Selection:
   A unique name must be chosen for the Society. Any identical or similar names will be rejected, and the chosen name should not suggest any governmental affiliation.
2. Memorandum of Association (MOA):
   The MOA acts as the Society's charter, requiring signatures from all founding members, witnessed by an Oath Commissioner, Advocate, or Notary Public. It must include clauses regarding the Society's name, registered office, objectives, and governing body members.
3. Preparation of By-Laws:
   The Society must define its rules and regulations, including membership criteria, terms, meetings, and member powers.
4. Required Documents:
   Applicants must submit several documents, including:
   • A cover letter for registration
   • Duplicate MOA and certified copy
   • List of members
   • Rules and regulations document
   • Affidavits from office bearers
   • Consent letters from members
   • Address proof for the registered office
   • No-Objection Certificate from the landlord
5. Registration with the Registrar:
   Submit the signed MOA and rules to the Registrar of Societies in the respective State, along with the applicable fee. The Registrar will assess the documentation and issue a Certificate of Registration if all requirements are met, typically taking 1-2 months.

E-Registration of Societies:

Many states, including Telangana, Punjab, Tamil Nadu, and Maharashtra, offer online registration services, allowing applicants to complete the process without visiting the Registrar's office. However, some states still require in-person registration.

2. Registration of an NGO as a Section-8 Company

A Section-8 Company is a type of NGO established to promote non-profit objectives, using any profits generated to further its mission instead of distributing them as dividends. The registration and operation of Section-8 Companies are governed by the Companies Act, 2013, replacing the earlier Section 25 of the Companies Act, 1956.

Requirements for Section-8 Company Registration:

1. Directors:
   A minimum of three directors is required for a public limited company and two for a private limited company, with at least one director residing in India.
2. Members:
   A private limited company is capped at 200 members, while public limited companies have no such limit.
3. Objectives:
   Only non-profit goals are permitted, and these must be clearly defined in the MOA and AOA.
4. Name and Capital:
   There are no minimum capital requirements, and Section-8 Companies do not need to include “limited” in their name.

Documents Required for Registration:

• Identity proofs of directors and shareholders
• Address proof of the registered office and a No-Objection Certificate
• MOA and Articles of Association (AOA)
• Rent agreement for the registered office
• Utility bills
• Digital Signature Certificate (DSC) and Director’s Identification Number (DIN)

Registration Procedure for Section-8 Companies:

After obtaining the DSC and DIN, the name of the Company must be reserved with the MCA using Form INC-1. Once approved, the incorporation application is filed using Form INC-32, along with the AOA and MOA. A license is then applied for through Form INC-12, after which the MCA issues a Certificate of Incorporation in Form INC-16. This process typically takes 3-6 months.

Benefits of Section-8 Company Registration:

These companies enjoy the advantage of being recognized as separate legal entities without minimum capital requirements. Additionally, stakeholders benefit under the Income Tax Act, 1961, and there is no need for suffixes in their company names.

3. Registration of an NGO as a Trust

If an NGO involves property, it can be registered as a Trust, governed by the Indian Trusts Act, 1882. A Trust is established when the author specifies their intention to create a Trust, detailing its purpose and beneficiaries.

Procedure for Trust Registration:

1. Name Selection:
   A suitable name must be chosen that does not suggest governmental patronage and complies with the Emblems and Names Act, 1950.
2. Members:
   Identify the author/settler and trustees. A minimum of two trustees is necessary, with no cap on the maximum number.
3. Trust Deed:
   The Trust deed serves as the legal document evidencing the Trust. It must include the Trust’s name, objectives, beneficiaries, registered office address, and clauses on membership and governance.
4. Registration with Sub-Registrar:
   Submit the Trust deed and photocopies to the local Registrar, along with identity proofs of two witnesses. Upon verification, a registration certificate will be issued.

Advantages of Trust Registration:

Registered Trusts can benefit from tax exemptions under the Income Tax Act, 1961, and obtain Section 80G certification, which provides advantages to the settlers.