Registration and Incorporation of a Non-Governmental Organisation [NGO]: How to Start in India
Registration and Incorporation of a Non-Governmental Organisation (NGO): How to Start in India
✅ I. Introduction
A Non-Governmental Organisation (NGO) in India is a voluntary, non-profit group organized at local, national, or international levels to address social, environmental, educational, cultural, or community issues.
NGOs are not governed by a single statute in India. Instead, they can be formed under different laws depending on the type of legal entity chosen by the founders.
✅ II. Types of NGO Structures in India
NGOs in India can be registered under one of the following legal frameworks:
| Type | Governing Law | Nature |
|---|---|---|
| Trust | Indian Trusts Act, 1882 (or State Acts) | Irrevocable public charitable trust |
| Society | Societies Registration Act, 1860 | Membership-based organization for charitable or literary purposes |
| Section 8 Company | Companies Act, 2013 (Section 8) | Non-profit company for promoting commerce, art, science, religion, charity, etc. |
✅ III. Procedure for Registration
A. Registering a Trust
Governing Law: Indian Trusts Act, 1882 (for private trusts) or state-specific Public Trusts Acts.
Steps:
Draft a Trust Deed – Main instrument containing objectives, trustees, mode of functioning, etc.
Minimum Trustees: Usually 2.
Registration with the Local Registrar:
Submit Trust Deed on stamp paper (value varies by state).
ID/address proofs of trustees.
Passport-sized photos.
Obtain PAN and Bank Account for the Trust.
Note: Trusts are generally irrevocable and more suited for long-term charitable institutions.
B. Registering a Society
Governing Law: Societies Registration Act, 1860.
Steps:
Minimum Members: 7 persons (from different states if registering as a national society).
Prepare MOA and Rules & Regulations:
Objectives, governance structure, member roles.
Apply to Registrar of Societies (state jurisdiction):
Along with:
Covering letter
Address proof
Identity proofs of members
Affidavit of President/Secretary
Obtain PAN and open Bank Account.
Note: Societies are more democratic in structure, with elected members and annual general meetings.
C. Registering a Section 8 Company
Governing Law: Companies Act, 2013 – Section 8
Steps:
Minimum Requirements:
Directors: Minimum 2 (for private), 3 (for public)
Members: Minimum 2 (no upper limit)
Name Approval (RUN Form):
Apply through Ministry of Corporate Affairs (MCA).
File SPICe+ Form (Integrated Company Registration):
With MOA, AOA, declarations, ID/address proofs.
License under Section 8:
Grant of license by ROC to operate as a not-for-profit company.
Incorporation Certificate issued after approval.
PAN, TAN, and Bank Account application.
Note: Section 8 Companies are highly regulated, enjoy higher credibility, and are suitable for larger, professionally managed NGOs.
✅ IV. Tax Exemptions and Compliance
After registration, NGOs can apply for tax benefits under the Income Tax Act, 1961:
Section 12AB: Registration for claiming tax exemption on income.
Section 80G: Donors to the NGO can claim deductions on donations.
FCRA Registration (Foreign Contribution Regulation Act, 2010):
Mandatory for receiving foreign donations.
✅ V. Key Legal Requirements
Annual Filings (IT Returns, ROC, Society Registrar)
Maintenance of Accounts and Audit
Renewal of FCRA License (if applicable)
Conduct of Board or Governing Body Meetings
No Profit Distribution – Surplus must be used only for the objectives.
✅ VI. Relevant Case Law
🏛️ CIT v. Palghat Shadi Mahal Trust (2002) 254 ITR 212 (SC)
Issue: Whether a trust engaged in community welfare like marriage halls can claim charitable status.
Held: SC held that purpose must be charitable under Section 2(15) of the Income Tax Act. Even if revenue is earned, it should be applied for charitable purposes.
🏛️ D.A.V. College Trust v. Director of Public Instructions, AIR 1971 SC 1737
Issue: Autonomy of NGOs (in the form of educational societies) vis-à-vis state interference.
Held: NGO/society running educational institutions has autonomy in administration, and state interference must be reasonable and not violate Article 19(1)(c) – Right to form associations.
🏛️ Society for Promotion of Education v. Union of India, AIR 1992 SC 1439
Held: Societies and charitable institutions must adhere strictly to their objects and cannot divert income or assets for other purposes, or their registration can be cancelled.
🏛️ Ahmedabad Rana Caste Association v. CIT (1971) 82 ITR 704 (SC)
Held: Charitable purpose must benefit the public or a section of the public, not a specific group or individuals, else it loses the charitable status.
✅ VII. Advantages of NGO Registration
Legal identity
Tax benefits
Eligibility for government and international funding
Credibility among donors and stakeholders
Perpetual succession
✅ VIII. Conclusion
Starting an NGO in India requires careful selection of the legal structure, clear documentation of objectives, compliance with registration procedures, and strict adherence to legal and financial norms. The law ensures that NGOs function transparently and for public good. Courts have upheld that NGOs must remain true to their charitable purpose and maintain public accountability.
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