Unlike other companies, setting up an NGO in India is not that difficult task. The real challenges surfaced up when you start such an entity. Starting an NGO seeks a lot of hard work, funding, and most importantly, an unshakeable commitment toward the social cause. The functioning of an NGO is not different from the conventional establishment. But one has to instil transparency in every facet of its functioning. Moreover, NGOs cannot underpin profit as their sole objective- instead, they have to work for society’s betterment.
Crucial Aspects for setting up an NGO in India
The following sections are the important prerequisites that one must consider before setting up an NGO in India.
Determine the objective of your NGO
The first step is to underpin the cause for setting up an NGO. From women empowerment, resources conservation to child education, there are many fields that one can address that lacks development or seeking urgent infrastructure support. Make sure to jot down a clear statement of your mission that depicts the goals and purpose of your NGO.
Set up the Board of Directors/members
There will apparently be the BODs & members who will be accountable to regulate the NGO. You need to procure the best talent that can help manage the complex facets of the entity, such as legal requirement, fiscal infrastructure, etc. Apart from that, have the support of individual who are goal-centric and possess an urge to support the needy ones.
Read our article:Potential Advantages of running an NGO in India
Determine the legit name of your NGO
It is an apparent prerequisite for any entity to have a name, and NGOs are no different here. The name should be catchy and easy to pronounce and give the impression of what an NGO is all about. But, it must not adhere to any similarity with other identical entities, including Government Authority Body, Board or Ministry etc.
Prepare Memorandum of Association and Articles of Association
Every NGO in our nation is mandated to prepare a trust deed/ Memorandum of Understanding/Bylaws. It encloses the name & NGO’s address, objective, member’s details, staffing information, rules and obligations, administrative laws and procedures.
The preparation and drafting of the Memorandum must adhere to a good pattern and parameters required for registration. It is a good idea to hire a professional from an NGO background who can provide ample assistance in relation to the NGO registration procedure.
Prior application’s submission, it is good to ascertain bylaws that talk about the legality associated with the NGO’s functionality.
Register your NGO
After arranging the documents above, you can get your NGO registered under the following Acts.
- Societies Registration Act (In society, mini. 7 members are required to be the members),
- Indian Trusts Act (In Charitable Trust, at least 2 person are required, there is no cap on the limit of maximum members)
- Companies Act (A non-profit Company is registrable u/s 8 of the Companies Act with the Registrar of Companies.)
Start getting funds
After registering your NFO, it is time for capital procurement for funding the proposed campaign.
Once your NGO has registered, it’s time for you to start the collecting funds to run NGO. It can be done through the internal sources like fees, donations, subscription charges. And the external sources like grants in the form of aid from the Government, private organizations or foreign sources.
What Documentations are needed for setting up an NGO?
Following is the list of the document required for the NGO registration
For Trust Registration
- Trust Deed’s objective.
- Particulars of the Trustee & settlor (Self-attested identity proof’s copy and Address Proof along with the detail related to occupation).
- Trust Deed on Proper Stamp Value.
- Photographs of Trustee as well as settlor.
- PAN Card of Trustee as well as settlor.
- Documentation related to the Trust Registered Address. In the case of rented property (No Objection Certificate from the Landlord is required).
For Societies Registration
- Society’s name.
- Working space’s address proof.
- Member’s identity proof
- 2 copies of the MOA & Society’s bylaws.
For Section 8 Companies Registration
- Copy of Identity Proof as well as Address Proof (Including PAN Card).
- DIR-2( Directors’ consent) as well as ID& Address proof
- Latest Utility bills.
- Proof of registered office address
- No objection certificate, i.e. NOC if the registered office is not taken on rent.
- Affidavit pertaining to deposits
- INC-14 -Declaration by Professionals
- INC-15-Declaration by Promoters (INC-14 & INC-15 shall be on the stamp paper, duly notarized).
- Detail pertaining to Annual Income
- Memorandum of Association, i.e. MOA and Articles of Association, i.e. AOA
- Promoter’s particular and Board members of the proposed firm.
Underlining the Key Differences between Trust, Society & Section 8 Company
- Trust refers to an agreement that exists between parties, whereby one party possesses the property’s ownership for the benefit of another party.
- Society refers to a group of individuals who collectively works to serve purposes related to literary, scientific or charitable, etc.
- Section 8 is an establishment with a social or charitable object that aims to apply its profits to advocate such a purpose.
An Overview on the Registering Authority
Minimum Members required to for setting up an NGO
- In the case of Trust, mini. Two trustees.
- In the case of Trust, minimum two trustees
- In the case of society, minimum 7 members.
- In the case of Section 8 Company, minimum two directors & minimum two shareholders. Keep in mind that the same individual can be appointed as director & shareholder in a company.
In India, setting up an NGO is not a troublesome errand at all, as it is clear from above. After registering an NGO, one has to adhere to the company’s object, i.e. supporting the noble causes.