WHAT IS NGO?
An NGO is a non-government organization with a charitable objective, is a legally established organization created by natural persons for the betterment of the society in general. It can be started as a Trust, a Society or a Non-Profit Company [Section 8 Company], depending on the activity you wish to undertake. This term “NGO” is usually used by the government to refer entities that have no government status.
NGOs are primarily engaged in social, cultural, legal, & environmental activities without any profit motive.
These are sometimes confused with non-profitable companies, which refers to a regular business is not making a profit.
At iTReXPERTS, we will help you select the right option and guide you through the entire NGO registration process.
Eligibility to start an NGO
- Minimum 2 directors required, if NGO is to be incorporated as a private limited company.
- No member limit in case of public limited company.
- Maximum number of members is 200, in case of a private limited company.
- Minimum of 3 directors required, in case of incorporation as a public limited company.
Benefits of NGO registration
Distinct Identity :
An entity means something that has a true existence; an object with a distinct existence. A company is a legal entity and a legal entity established under the Law. Hence a company is a form of the organization having broad legal potential and that may own property and also incur debts in its own name. The members of the company have no liability towards company debts because the company and members both are the separate people in the eye of the law, hence the company is an artificial person having a separate legal identity.
Liability is Limited :
Limited Liability means the status of being legally responsible for a company’s debts only to a limited sum. Like proprietorships and partnerships, the Member’s responsibility for the company’s debts is limited in a limited liability company. In other words, the responsibility of a company’s members is limited only to the sum of the face value of the shares they take over
No Minimum Capital Required :
As per the point of view of incorporation, there is no minimum capital required for incorporating a private limited company. As per company law 2013, you can start a private limited company with 0 paid-up capital
Less stamp duty:
While incorporating section 8 companies there is minimum stamp duty liveable. The government give privileges to section 8 on the incorporation of the company, hence it charges less stamp duty on incorporation.
No suffix :
Section 8 companies may not use suffixes like the private limited company or limited company, it is optional for them.
Tax Benefits :
Section 8 company can get the benefit, if it gets registration under section 80G and 12AA of IT act.
Three legal possible ways for NGO registration in India
- Section 8 company registration under "the campanies act,2013"
- Trust registration under "the Indian trust act,1882"
- Society registration under "societies registration act, 1860"
Services Covered
- Filing of E-forms
- Name approval
- DSC (2 nos)
- Filing of SPICe form
- Issue of Incorporation Certificate
- Issue of Section 8 NGO license
- Includes Govt Fees & Stamp duty for Authorized Capital upto Rs. 10 Lakh
- Excludes foreign national / Body Corporate as director or business needing RBI/SEBI approval
Who Should Buy
- A group of any number of people desirous of forming a section 8 company
- Existing registered trust
- Existing registered Society
Purchase Plan
- Purchase of Plan
- DSC Application
- Company Name Reservation with RUN
- Filing of e-Forms with ROC
- Receipt of Incorporation Certificate
Documents requirements to begin as section 8 company
- A letter of authorization.
- Payment of fee.
- At least two shareholders.
- At least two Directors (Directors and shareholders can be the same person).
- At least one Director shall be resident in India.
- List of 'names', 'descriptions', 'addresses' & 'occupation' of the promoters as well as of the Board Members.
- Details of assets and obligations of the company as on date with the utilization.
- A statement specifying briefly the territories in which the request is made.
- A declaration in prescribed form on non – judicial stamp paper by each person making an application.
- No Minimum capital required.
- A statement providing a brief description of work.
- Registered office proof (no-objection certificate from the owner of the premises).
- Memorandum & Articles of Association of the Company
- 'Income-tax PAN' is a necessity in case of Indian nationals.
- Copy of Identity Proof (Voter ID/Aadhar Card/Driving License/Passport) Passport is a mandatory requirement for identification in case of international residents.
- Proof of Residency [Any one electricity bill or bank statements or landline bill or mobile bills (not older than 1 Months)]
Documents for NGO Registration
- Sworn affidavit from the President or Secretary, declaring the relationship between subscribers
- Address Proof of Registered office and No-Objection Certificate (NOC) from the landlord
- A requesting letter for registration signed by founding members stating purpose of formation
- Certified copy of MoA [Memorandum of Association]
- Minutes of meeting
- Declaration by President of Society
- Copy of the rules and regulations members will abide by
- Name, Address, Occupation of all members of society with signatures
FAQ
Q1. What is Section 8 Company?
- A NGO or Non-Profit Organisation is an entity that operates for promotion of art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
- In India, an NGO can be registered as any of the three structures being Company under Section 8 of the Companies Act, 2013(section 25, companies act 1956), Trust or Society.
- Section 8 Company format of a NGO is most popular form of NGO in India. It is easy to register, run or manage a Section 8 Company in comparison of a Trust and a Society.
Q2. What are key features of a section 8 company?
The key characteristics of an NGO section 8 company are:
- Object: *It operates for common welfare of masses at large, for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
- Profit Earning: The objective is not to earn profit. If any profit is earned during course of its operation, the same is not to be shared among owners/members rather utilised for attaining the objects for which NGO was formed.
- Utilisation of funds and earnings: The profits, if any, or other income is used towards promoting of specific objects of NGO. Further there is restriction on declaration of profits as dividend to members.
Q3. When an NGO is eligible for government funding?
An NGO gets eligible for Government funding after three years. However, in some exceptional cases, an NGO can get Government funding even after one year if its project gets approved.
Q4. Who can become a member in Section 8 Company?
Any individual/organization can become the member of Section 8 Company including foreigners/NRI’s.
Q5. Procedure for incorporating section 8 companies:?
STEP 1: APPLY FOR THE DESIRED NAME
The first step in incorporating a company is for reserving the name of the proposed company in part-A of SPICe Plus (SPICe+) form. In this form choose your business activity and file for two proposed names, if CRC will reject the proposed name then file again with two new names within a certain time limit from the date of rejection (15 days).
STEP 2: APPLY FOR A DIGITAL SIGNATURE CERTIFICATE (DSC)
The process of incorporation of a Company is 100 percent online in India. Hence, we need to apply for a DSC (Digital Signature Certificate), which will be used for electronically signing the forms by proposed directors and proposed members respectively. DSC has to be mandatorily applied for each and every single member/shareholder and director of the Company.
STEP 3: FILL THE APPLICATION FOR INCORPORATION (SPICe plus Form – SPICe+)
Once, your name gets reserved under it will be valid for 20 days from the date of approval, within 20 days you have to fill-up the respective application form for incorporation along with all the requisite attachments and documents and upload it online. SPICe+ is an advanced form combination of 8 forms in one. Through this proposed company can apply for at once:
- Name reservation
- Incorporation
- Apply for DIN
- TAN application
- PAN application
- EPFO registration
- ESIC registration
- GSTIN registration
Next step is to fill the part-B of SPICe + which will contain all the detail related to incorporating company like number total number of directors and members, Authorized share capital, paid-up capital, number of share hold by members, company registered address detail, directors and member detail and will required attachments for proof. Then draft the MOA (memorandum of association) and AOA (Article of Association) of the proposed company, then fill form required for EPFO and ESIC registration with detail, then Fill the AGILE form for procuring GSTIN. After filling all these attach the signature and then upload it on the MCA website.
For section 8 company applicants need to attach additional documents with SPICe+ form in part –B
- The physical copy of MOA draft duly signed by members and witnesses
- The physical copy of AOA draft duly signed by members and witnesses
- Declaration in form INC-14 by any practicing professional
STEP 4: CERTIFICATE OF COMMENCEMENT OF BUSINESS
Once the application of incorporation of the company is approved and the Certificate of Incorporation is issued by the ROC, the Company shall file for seeking approval for commencing the business within 180 from the date of incorporation of the Company
But, for a seamless experience, you can contact itrexperts. Our experts will help you at every stage of the registration process.
Q6. What is the government fee applicable for Section 8 company (NGO) registration?
Below are the charges applicable for DIN, DSC and other government forms:
- DSC-Director Identification Number(2 Nos): Rs.3500
- RUN Form (Name Approval): Rs.1000
- SPICE+ Form (Registration under section 8): Rs. 5000
- AoA-Article of Association: Rs.1000 (up to Rs.10 lakh of authorized capital)
- MoA-Memorandum of Association: Rs.5000
Q7. How many members are required for NGO registration?
- For Trust, minimum 3 members are required;
- for Society, minimum 7 members are required, and 8 members are required from different states if the society is registered on national level;
- for Section 8 Company, minimum 2 members are essential for NGO Registration.
Q8. What are the Eligibility to start an NGO?
- Minimum 2 directors required, if NGO is to be incorporated as a private limited company.
- No member limit in case of public limited company.
- Maximum number of members is 200, in case of a private limited company
- Minimum of 3 directors required, in case of incorporation as a public limited company
Q9. What are the Three legal possible ways for NGO registration in India?
- Section 8 company registration under "the campanies act,2013"
- Trust registration under "the Indian trust act,1882"
- Society registration under "societies registration act, 1860"