Types of NGO Registrations and Their Benefits

In India, non-profit organizations play a vital role in addressing social issues and improving the lives of individuals and communities. Whether you're passionate about education, healthcare, the environment, or poverty alleviation, starting an NGO (Non-Governmental Organization) can be your pathway to creating a lasting impact. However, before you begin operations, one crucial step is to register your NGO under the appropriate legal framework. In this blog, you'll learn about the different types of NGO registrations and the benefits they have.

What is an NGO?

An NGO (Non-Governmental Organization) is a non-profit organization started by individuals, communities, or institutions to support social, environmental, or humanitarian causes. It works independently of the government and aims to bring positive change. In India, NGOs often focus on important issues like education, healthcare, poverty, rural development, human rights, and environmental protection to help people live better lives.

NGOs in India can be registered under different legal structures, each with its own purpose, benefits, and compliance requirements.

Types of NGO Registration in India

NGOs (Non-Governmental Organizations) can be classified based on their function, legal structure, and operational scope. Here are the main types that the NGO can be registered under three primary Legal frameworks:

1. Trust
2. Society
3. Section 8 Company

Each type has its own advantages, governing laws, and suitability depending on the objectives of the organization.

Here is a detailed explanation:

1. Trust

A trust is a legal arrangement to manage property or money for the benefit of others. In the context of NGOs, a public charitable trust is established when trustees agree to manage and use the assets for a charitable purpose, such as education, healthcare, or supporting the underprivileged. It is a popular choice for individuals with a philanthropic vision. In India, a minimum of two trustees is required, along with a trust deed to register a trust. This document clearly outlines the objectives of the trust, how it will operate, and what will happen to the assets if the trust is ever dissolved.

Key Features of Trust Registration in India:

• Governing Law: In India, private trusts follow the Indian Trusts Act, 1882. Public trusts are managed under different state laws that depend on the location.
• Trust Deed Requirement: A Trust Deed, executed on non-judicial stamp paper, is mandatory. It outlines objectives, trustee roles, and management.
• Minimum Members: At least two trustees are required, though there is no upper limit.
• Registration Authority: Public trusts are registered with the office of the Sub-Registrar of the concerned jurisdiction.
• Charitable Purpose: The trust must serve religious, charitable, or educational purposes to avail tax exemptions.
• Legal Identity: Registered trusts get legal recognition, enabling them to own property and open bank accounts.
• Tax Benefits: Trusts can apply for 12A and 80G certificates for income tax exemption and donor benefits.

Documents Required for Trust Registration in India:

Here is the list of documents:

• Trust Deed (On non-judicial stamp paper): Main legal document
• Photographs: Passport-size photos of the settlor and trustees.
• ID Proof: A PAN card and Aadhaar card of all trustees and the settlor.

• Address Proof: Electricity bill, water bill, or property tax receipt of the registered office address.
• Ownership Proof or NOC: If your office space is owned, you need to provide documents that prove ownership. If it is a rented space, you must get a No Objection Certificate (NOC) from the landlord.
• Witnesses: Two witnesses with valid ID and address proof must be present during registration.
• Trustee Signatures: All trustees need to sign the trust deed.

These documents are submitted to the Sub-Registrar’s office for formal registration.

Registration Process:

Here is the step-by-step process for Trust Registration in India:

Step 1: Preparation of Trust Deed

You must draft a comprehensive Trust Deed that clearly explains the trust’s purpose, the names of trustees, and how it will function.

Step 2: Document Compilation

You need to collect necessary documents, including the Trust Deed, identity and address proofs of trustees, proof of the registered office address, and so on.

Step 3: NGO Darpan Registration

You should register the trust on the NGO Darpan portal to obtain a Unique ID. It facilitates interaction with government departments.

Step 4: Application Submission

Submit the Trust Deed along with the required documents to the local Sub-Registrar or relevant authority. In certain states, this process can be initiated online.

Step 5: Fee Payment

You need to pay the prescribed registration fee, which varies by state.

Step 6: Witness Formalities

You need to check that two witnesses are present at the time of registration, as their signatures are needed to complete the process.

Step 7: Certificate Issuance

Once verified, the authority registers the trust and issues a Registration Certificate. This certificate confirms the trust's legal status.

Benefits of Trust Registration in India:

Here are the benefits of Trust Registration in India:

1. Legal Recognition: A registered trust becomes a legal entity, capable of owning property, entering contracts, and filing lawsuits in its name.
2. Tax Exemptions: Registered trusts can apply for 12A (income tax exemption) and 80G (tax benefit to donors) under the Income Tax Act, 1961.
3. Credibility and Transparency: Registration builds public and donor trust by demonstrating legitimacy and regulatory compliance.
4. Access to Government Schemes: Registered trusts can apply for grants and schemes offered by central and state governments.
5. Perpetual Succession: The trust remains operational regardless of changes in trustees, ensuring long-term continuity.
6. Easy Fundraising: It is easier for registered trusts to raise funds from the public, CSR initiatives, and international donors (with FCRA approval).
7. Asset Protection: Trust property is legally protected and cannot be claimed by individual trustees or third parties.

2. Society

A Society is an association of individuals united by mutual consent to act jointly for a common charitable purpose. Societies are usually formed for activities such as arts, education, music, culture, sports, or religion.

Key features of Society Registration in India:

Here are the key features of Society Registration in India:

• Governing Law: Societies are registered under the Societies Registration Act, 1860, which governs their formation, management, and dissolution.
• Minimum Members: A minimum of seven members is required to register a society. For societies operating across states and members from at least seven different states are needed.
• Purpose: Societies are formed for charitable, literary, scientific, or social welfare purposes, including education, art, culture, and environmental protection.
• Memorandum of Association (MoA): The core document that outlines the society’s name, objectives, and governing rules. It also includes details of its founding members.
• Executive Committee: Managed by a governing body or executive committee elected from the members.
• Registration Authority: Societies are registered with the Registrar of Societies in the respective state.
• Legal Identity: A registered society becomes a legal entity, allowing it to hold property and initiate legal action.

Documents Required for Society Registration in India:

Here are the lists of documents required for society registration in India:

• Memorandum of Association (MoA): Outlining the society’s name, objectives, and details of founding members.
• Rules and Regulations: Internal governance rules are signed by all members.
• ID Proofs: PAN and Aadhaar cards of all members.
• Address Proof: Utility bill or property tax receipt of the registered office.
• No Objection Certificate (NOC): From the property owner (if the office is rented).
• Passport-size Photographs: Of all members.
• Affidavit/Declaration: Stating the society's lawful purpose and member details.

Registration Process:

Here are the registration processes of Society in India:

Step 1: Choose the Society Name

You must select a unique name that complies with the Emblems and Names (Prevention of Improper Use) Act, 1950.

Step 2: Draft Memorandum & Rules

You need to prepare the Memorandum of Association (MoA) and Rules & Regulations signed by all founding members.

Step 3: Document Collection

You should gather the required documents including ID/address proofs, photographs, NOC from the property owner, and affidavits.

Step 4: Submission to Registrar

Next, submit the application with MoA, Rules, and supporting documents to the Registrar of Societies in the respective state.

Step 5: Fee Payment

You need to pay the prescribed registration fee (which varies by state).

Step 6: Verification

The Registrar reviews the application and may request clarifications or corrections if needed.

Step 7: Certificate Issuance

Once the application is approved, the society receives a Registration Certificate, which grants legal status to the society.

Benefits of Society Registration in India:

Here are the benefits of Society Registration in India:

• Legal Recognition: A registered society becomes a legal entity, capable of owning property, entering contracts, and initiating legal proceedings.
• Tax Exemptions: Registered societies can avail income tax exemptions under Sections 12A and 80G of the Income Tax Act, 1961.
• Access to Government Funding: Eligibility for government grants, schemes, and CSR funding increases after registration.
• Credibility: Registration enhances trust among donors, financial institutions, and the public.
• Perpetual Succession: The society continues to exist despite changes in its governing body and ensuring continuity.
• Structured Governance: A registered society must adhere to documented rules and regulations. This promotes accountability and transparency.
• Foreign Funding Eligibility: Registered societies can receive foreign contributions after registration under the FCRA (Foreign Contribution Regulation Act).

3. Section 8 Company

A Section 8 Company is a type of company registered under the Companies Act, 2013. It promotes commerce, science, art, sports, education, research, social welfare, religion, charity, and protection of the environment. Unlike other companies, Section 8 companies do not distribute profits to their members.

Key features of Section 8 Company Registration in India:

Here are the key features of Section 8 Company Registration in India:

• Purpose-Driven Entity: Formed to promote charitable objectives like education, art, science, sports, environment protection, and social welfare. It is not applicable for profit-making.
• Governing Law: Registered under the Companies Act, 2013, and regulated by the Ministry of Corporate Affairs (MCA).
• No Minimum Capital Requirement: There is no prescribed minimum capital, allowing flexibility in funding.
• Profit Reinvestment: Any profit earned by a Section 8 company must be used to support its goals. Members cannot receive dividends or personal financial benefits from the company’s income.
• Incorporation as a Company: Can be formed as a private limited or public limited company.
• Limited Liability: Members’ liability is limited to the amount they have invested or guaranteed.
• Tax Benefits: Eligible for tax exemptions under Sections 12A and 80G of the Income Tax Act after necessary approvals.
• High Credibility: Recognized for its regulated structure and transparency to attract donations and grants.

Documents Required for Section 8 Company Registration in India:

Here are the documents required for Section 8 Company Registration in India:         

• Director Identification Number (DIN): For all proposed directors
• Digital Signature Certificate (DSC): Mandatory for signing online forms.
• PAN Card: Of all directors and promoters.
• Aadhaar Card or Passport/Voter ID/Driving License: As identity proof.
• Recent Utility Bill: Electricity, water, or gas bill as address proof of directors (not older than 2 months).
• Passport-size Photographs: Of all directors.
• Registered Office Proof: Ownership document or rent agreement along with NOC from the owner.
• Memorandum of Association (MoA) and Articles of Association (AoA): Clearly stating the objectives and operational rules.
• Declaration and Consent: INC-14 by a practicing professional and INC-15 by directors.
• Proposed Company Name Approval: The RUN (Reserve Unique Name) form on the MCA portal.

Registration Process:

Here is the registration process of Section 8 Company Registration:

Step 1: Obtain a Digital Signature Certificate (DSC)

All proposed directors must obtain a DSC to sign electronic forms on the MCA portal.

Step 2: Apply for a Director Identification Number (DIN)

DIN is mandatory for directors. It can be applied through the SPICe+ form if not already available.

Step 3: Name Reservation (RUN Form)

File the RUN (Reserve Unique Name) form on the MCA portal to get approval for the company name with the suffix "Foundation", "Association", "Society", etc.

Step 4: Draft MOA & AOA

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) with the company’s objectives and governance structure.

Step 5: File SPICe+ Form (INC-32)

Fill out the integrated SPICe+ form, which includes company incorporation, PAN, TAN, and GST registration.

Step 6: Submit INC-12 Form

Apply for a license to operate as a Section 8 Company by filing INC-12 along with a declaration (INC-14), draft MOA/AOA, and estimated future income/expenditure.

Step 7: License Approval (Form INC-16)

Once verified, the Registrar of Companies (RoC) issues a license under Section 8 in Form INC-16.

Step 8: Certificate of Incorporation

Once the license is granted, the company is officially registered and receives a Certificate of Incorporation, including the Company Identification Number (CIN).

Benefits of Section 8 Company Registration:

Here are the benefits of Section 8 Company Registration:

• Legal Recognition: Registered under the Companies Act, 2013, a Section 8 Company is a distinct legal entity. This is capable of owning property and entering into contracts.
• Tax Exemptions: Eligible to apply for Section 12A and 80G certifications for income tax exemption and donor benefits under the Income Tax Act, 1961.
• No Minimum Capital Requirement: There is no mandatory capital required. It allows flexibility in fund management.
• Limited Liability: Members’ liabilities are limited to their share in the company and protect personal assets.
• Credibility and Transparency: Higher compliance requirements ensure trustworthiness to attract donors, grants, and CSR funds.
• Exemption from "Company" Suffix: Unlike other companies, Section 8 Companies are not required to use "Private Limited" or "Limited" in their names.
• FCRA Eligibility: Eligible to receive foreign contributions upon registration under the Foreign Contribution (Regulation) Act, 2010.

Conclusion

Registering an NGO in India whether as a Trust, Society, or Section 8 Company provides legal recognition, tax benefits, access to government schemes, and so on. Each structure serves unique purposes, allowing individuals and groups to effectively contribute to social welfare with transparency and accountability. Throughout this article, you have learned about the types of NGO Registrations and their benefits. If you want to do an NGO registration, contact Online Legal India to get assistance and support.