What is non-profit organization?

• NGO is a group, an organization, a non-profit establishment or non-profit entrepreneurship of individuals, activists, voluntary and social persons.
• NGO is a social voluntary organization of social activists, group of persons, community, persons, volunteers, civilians and citizens who are working or associated for social welfare and social development.
• NGOs might focus on activities in areas involving-
  • Health or Health emergencies
  • Education,
  • Infrastructure,
  • Environment Protection
  • Wildlife Conservation
  • Child Labour Protections
  • Women empowerment
  • Advocacy of minority rights,
  • Support of the poor, and
  • The reduction of crime.
• Different types of NGO Registration in India:
  • Trust
  • Section 8 Company (Registered under Companies Act, 2013)
  • Society

Trust:

• Trust is registered a non-profit organization under the Trusts Act of 1882.
• A trust can be established for a variety of reasons, including poverty or distress assistance, education, medical treatment, and so on.
• There should be minimum 2 members.
• No maximum members limit.
• There are two types of NGOs as a trust:

1. Privae Trust:

• It is open for self-purpose.
• No grant is provided for private trust.
• A private trust is not considered as NGO.
• These trusts are not exempted from tax.

2. Public Trsut:

• It is also known as charitable Trust.
• Public trust is registered for a charity.
• Public trust can take the grant from ministry and government.
• Public trust is considered as NGOs.
• These trusts are exempted from tax.

            Mandatory Compliances for Trust:

• Maintain books of accounts
• Statutory Audit (Form -10B)
• Filing income tax return

            Documents required for Trust Registration:

• PAN and Aadhar card of trustee
• Photo of trustee
• Trust Deed
• Electricity bill for registered office of trust
• NOC from owner

Section 8 Company:

• Section 8 companies are known as NGO.  
• They can also take grants from the government. 
• Section 8 companies are also known as a non-profit company.
• If the NGO is registered under section 8, it enjoys tax exemption. It means the donation given to the section 8 company is exempted from tax.
• They should be minimum two members to start NGO as a company.
• There is no maximum limit for member for NGO.
• Mandatory Compliances for Section 8 Company:
  • Maintain books of accounts
  • Statutory Audit
  • RoC Compliance
  • Filing income tax return
  • KYC of director every year
• Documents required for Section 8 Company Incorporation:
  • PAN and Aadhar card of members/directors
  • Photo of members/directors
  • Resident proof (Bank Statement latest for 2 months/Telephone bill/Electricity Bill latest
  • Address Proof ( Aadhar Card/Driving License/Votor Card)
  • Electricity bill for registered office
  • NOC from owner of registered office

Society:

• Society is registered under the Society Act.
• You want to register your NGO under society, you have to decide that whether you want to open your society as:

1. National level society:

• There should be a minimum of 8 members.
• The members should belong from different states.
• These NGOs can provide their services all over India.
• National level society NGOs can take the grant from the National level.

2. State level society:

• There should be a minimum of 7 members.
• The members should belong from the same state.
• State-level society NGOs can provide their services within that state.
• State-level society NGO can only take the grant from the state level.

       Mandatory Compliances for Society:

• Maintain books of accounts
• Statutory Audit
• RoC Compliance
• Filing income tax return
• KYC of director every year

      Documents required for Society Registration:

• PAN and Aadhar card of members
• Photo of members
• Resident proof (Bank Statement latest for 2 months/Telephone bill/Electricity Bill latest
• Electricity bill for registered office
• NOC from owner of registered office