There are various reasons that one should consider before starting an NGO instead of other options. Amongst all, the fundamental reason is the contribution to society. As a responsible citizen, this is the best way to do something good and give back to the nation. Practically, before deciding to start an NGO in India, a person should be clear about the motive of forming a Non-Profit Organization. So, if a person has a quest to serve the community, they can establish a Non-Government Organization in India. This blog underpins the detailed process of how to start an NGO in India.
What is an NGO?
An NGO stands for non-governmental organizations as they are exempt from government control in their functioning. NGO is an association of high-spirited individuals who form a welfare organization for a cause that ensures social justice. In India, NGOs are open to those persons who are democratic and willing to become members of the organization and want to help society. NGO is apopular word, which has earned value globally.
NGOs have various interpretations; One of the interpretations is a Non-profit organization that runs outside of Governmental control. NGOs are non-profit organizations established to tackle issues relevant to social and political issues across the nation. In India, Non-Government Organizations work, taking into consideration the basic social principles. Also, NGOs structure their activities to bring about development to the communities that they are serving.
Legalities for starting an NGO in India
The most common form of starting an NGO in India includes registering it as-.
- A society,
Registered NGOs entrust with the responsibility of complying with various statutory obligations. Strict laws and regulations are required to be complied with depending upon the type of NGO registration.
Types of NGO in India
In India, any person is free to execute social activities without establishing an organization. However, to perform the activities in a group, it is essential to have proper management in place. For registering an NGO in any of the below-mentioned ways, an individual needs to follow the various laws and regulations. NGO registration in India is possible in 3 ways: –
Also, In India, various governmental agencies have regulatory authority over not-for-profit entities.
At the state level, the governmental agencies include-
- The Charity Commissioner (for trusts),
- The Registrar of Societies (For society), and
- The Registrar of Companies (under Section 8 of the Companies Act).
At the national level, regulatory bodies include-
- The Income Tax Department and Ministry of Home Affairs are the regulatory bodies for the NPOs receiving foreign contributions).
Steps required to start an NGO in India
While starting an NGO in India, an applicant needs to comply with various laws and procedures prescribed in the respective act.
I. Steps required to start an NGO in India (As a Trust)
The procedure to start an NGO (As a Trust) involves the below-mentioned steps-
- Select an Appropriate Name -The first step to start an NGO is to select an appropriate name for the Trust. An applicant must consider that the name selected should not come under restricted list of the Names as per provisions of the Emblems and Names Act, 1950.
- Preparing the Trust Deed-Before Trust registration, an applicant shall prepare the trust deed. A trust deed contains all the necessary information related to the registration.
- Selecting the Settlers and Trustees of the Trust-The next step after preparing the Trust deed is to choose the parties(Settlor and Trustees) of the Trust. There is a requisite of two trustees to form a Trust.
- Preparing Bye laws-For Trust registration, it is mandatory to prepare the bye-laws as it represents the charter of the Trust.
- Payment of requisite fees-The next step is to pay a requisite fee for Trust registration.
- Collection of a copy of the trust deed– An applicant can collect a certified copy of Trust Deed within ONE week from the DATE OF submission of documents.
- Submission of Trust Deed with The Registrar and Obtain the Registration Certificate-After submitting the Trust Deed with the Registrar, the Registrar returns the original registered copy of the Trust Deed to the applicant and keeps the duplicate copy of it. Further, the Registrar issues the certificate within seven working days.
2. Steps required to start an NGO in India(As a Society)
For starting an NGO as a Society, the founding members must first choose-
- Choosing a name for the Society-While selecting a name for the society, it is essential to keep in mind the laws as per the Societies Act, 1860. Also, the name selected by the applicant must not suggest the patronage of the Government of India or any State Government or attract provisions of the Emblem and Names Act, 1950.
- Preparing the Bye-laws of a Society-While registering the NGO, an applicant shall prepare the Bye-laws of the society. The Bye-laws must be signed by each of the founding members, witnessed by the individuals authorized to do so.
Authorities here means (An Oath Commissioner, Notary Public, Gazetted Officer, Advocate, Chartered Accountant, or Magistrate 1st Class).
An applicant shall file the signed Bye-laws with the concerned Registrar of Societies in the State with the prescribed fee. Once the documents are submitted and are complete in all forms, the Registrar would certify to deem the Society to be registered.
3. Steps required to start an NGO in India (as a Section 8 company)
For starting an NGO as a Section 8 Company in India, an applicant needs to follow the below-mentioned steps.
- Apply for Digital Signature Certificate-The very first step for NGO Registration as a Section 8 company is to apply for the DSC.
- Name reservation through SPICE– For name reservation, click on the ‘SPICe+’ Form placed under ‘MCA Services’. SPICE+ form is used for name reservation and includes all the steps right from Name Reservation to Post incorporation compliances.
- Submitting SPICE+ Part A form- For Name reservation and incorporation purposes, the applicant needs to submit the SPICE+ Part A form.
- Filing SPICE+ Part B for Incorporation Purpose-Once SPICE+ Part A is filed by the applicant, The next step is to download SPICE+ Part B in PDF format. SPICE +Part B includes related forms–
- INC-9 and URC-1
- Preparing the charter documents
An applicant shall prepare and file the charter documents (MOA and AOA) form from Dashboard Link.
- Filing the details in AGILE PRO – The next step after preparing the MOA and AOA is to fill all the requisite information in the AGILE PRO form. AGILE PRO includes-
- EPFO/ ESIC-Mandatory
- Opening the bank account of the company through this form.
- Fill in requisite details in INC-9-INC-9 is a Declaration by the subscriber or First director.
- Filing forms and affixing the DSC – After filling in all the requisite details, an applicant shall file the SPICE + forms along with the AGILE PRO form with MCA by affixing the DSC.
- Pre-scrutiny check and Payment of Requisite Fees- The next step after affixing the DSC is a pre-scrutiny check. After a successful Pre-scrutiny, the applicant must click on the confirmation button.
- Payment of requisite fees- The applicant company is required to pay a requisite fee for Section 8 Company registration.
- Issuance of COI from the Registrar- If the Registrar finds the details and the documents appropriate, he will issue a Certificate of Incorporation to applicant company.
Conclusively, it is not necessary to register an NGO to perform social and charitable activities. However, only registered NGOs can perform the activities specifically related to fundraising. It is up to the Governing Board whether to get NGO registered or work as an unregistered organization. Ideally, registration leads to the proper functioning of NGOs and results in availing specific advantages accrue to the Registered NGOs in terms of financial assistance and tax exemptions from certain incomes.
Read our article:An Outlook: Registering an NGO in India