NGO Registration

I. SECTION 8 COMPANY

A. What is a Section 8 Company?

The primary goal of the Section 8 Company is to serve charitable purposes. In India, 3 legal forms exist for an NGO or Non-Profit Organizations i.e. Trusts, Societies and Section 8 Companies. Indian Trusts have no central law; Indian Societies have different legal and institutional frameworks from state to state while Section 8 companies have one uniform law across the country – Companies Act, 2013, thus making it more closely regulated and monitored than trusts and societies, and recognized all over the world.

• It has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any such other object.

• It can be registered with a minimum of two directors and shareholders.

• A person can be both a director and shareholder in a Section 8 Company.

B. Advantages of Section 8 Company Registration in India:

• Tax Benefits: Since Section 8 companies are more of a charitable institution, they have access to the various exemptions available under the IT Act. These companies are qualified to access multiple tax benefits and a tax cut. Section 80G of the Income Tax Act render tax-related benefits to these companies.

• Exemption to the Donators: Under Section 80G, the exemption is granted to the Donators if the Section 8 company is registered under Section 80G.

• Eligible For Foreign Contribution: Section 8 companies are eligible to receive overseas funds in donations provided they are registered under the Foreign Contribution Regulation Act, 2010. This helps them fuel their charitable campaigns that are in need of much-need findings.

• Zero Stamp Duty: Section 8 companies are not liable to pay stamp duty on the MOA and AOA, unlike other entities falling under the Companies Act, 2013.

• Improved Credibility: Companies in India are registered with the Registrar of Companies (ROC) under the Companies Act 2013. Anyone can check the details of the company through the Ministry of Corporate Affairs (MCA) portal. Also, details of all the directors are provided while the formation of the company. Hence a PLC form of business structure is trusted more.

C. Minimum requirements to register a Section 8 company:

• Unique name of the company: The proposed name of the company should be unique and should not be similar or identical to an existing company or LLP or Registered Trademark.. (Recommended to provide  at least two names on a preference basis) Section 8 companies don’t need to add the suffix “Limited” or “Private Limited” in their name.

• Minimum two partners: A Section 8 company can be registered by at least two partners, who shall act as the directors and shareholders of the company, and out of which at least one director must be resident in India.

• Main objects: Type of charitable objective the Company will do on its formation.

• Digital Signature of Directors and Shareholders: Digital Signature Certificate (DSC) is mandatory for all Directors and Shareholders.

D.  Required Documents for the formation of a Section 8 companies:

Provide the following required documents on mail iD (XYZ @gmail.com)/ What’s app (9358222708):

• Passport-size photos of directors (Minimum 2 Directors)
• Address proof of directors (Electricity Bill /Bank Statement/ Telephone Bill or Mobile Bill)
• Photo ID proof of directors (Passport/ Driving Licence/Voter ID)
• PAN Card & Aadhaar Card of Directors and Shareholders
• Mail Id and Phone Number of Directors and Shareholders
• Specimen signature of Directors
• Address proof of Company: Electricity Bill

E. Timelines:

Company Incorporation is done within 6-9 working days (excluding Saturday & Sunday) after receipt of necessary documents.

F. Add on free services:

• GST Registration
• NITI Aayog registration (NGO Darpan)
• 12AA & 80G
• ESIC and PF registration
• Shop Act registration
• Drafts for the opening of Bank Account
• Filing of Form (INC 20A) Commencement of Business
• Documents for Appointment of First Auditor (Form ADT-1)
• Basic Legal agreements such as Vendors Agreements, Employee/ Service agreements, NDA, etc. unto the limit of 4.

II. NOTE ON FORMATION OF TRUST

Introduction:

A Trust can be made for many purposes such as providing for the welfare of the child, for religious or charitable purposes, by providing medical assistance to the author, and so on. However, The Indian Trust Act 1882 explicitly states that trust cannot be created for an unlawful purpose. Trust can be earned by anyone with a sound mind, who has reached the age of majority.

Any person capable of managing property may be appointed as trustee. One is not obliged to accept responsibility as a trustee. He must declare his purpose in words and deeds. It is the duty of the trustee to achieve the purpose of the fund. Anyone who can manage a property can be a trustee. Reliability can be caused by movable or immovable property.

Where possible, immovable property is required that the “trust instrument” be signed by the author or trustee and registered unless the trust is created at the will of the author or trustee The trust of a movable asset may be created in the manner described above by using a tool or by transferring ownership of the asset to a trustee.

Who can apply for the formation of Trust?

Under Section 7 of the Indian Trusts Act, a trust can, with the permission of the principal court of original jurisdiction, be formed by any person competent to contract and by or on behalf of a minor.

The following are eligible for the creation of a Trust.

1. Trust of an Undivided Hindu Family
2. Trust from a Minor
3. Trust by a woman
4. The Persons’ Association
5. Company

Types of Trust

1. Private Trust:

A fund is called a Private Trust if it is for the benefit of one or more persons, or within a specified period, which may be available. Financially Trusted Trustees are governed by the Indian Tr trust Act 1882. Private Trust may be established between Vivos or will.

• Public Trust:

The fund is called the Public Trust when it is created entirely or primarily for the benefit of the general public, in other words, the beneficiaries of the Public trust form a non-profit organization. Public funds are actually charitable or religious resources and are governed by the general Law. The provisions of the Indian Trustees Act do not apply to Public Trustees. Like secret trusts, public trusts can be built by inter vivos or by will. Indian Trust Act does not apply to public trusts that may be established by common law.

• Public-cum-Private Trusts

Some trusts may be classified as Public cum Private Trusts, whose portion of the profits may be used for public purposes and a portion may go to a private person or individuals. Such trusts shall be eligible for exemption in respect of the portion of income earned by private individuals or persons as private trusts and shall be eligible for exemption in respect of the portion of income received for public purposes in compliance with section 11, given that such trusts have been created before the Income Tax Act of 1961, i.e. before 1-4-1962. Public-cum-private produced on or after 1-4-1963 is not eligible for U/S exemption 11.

Trust Deed

It is a tool of trust called trust. A trust deed has many clauses such as a name clause, a registered office clause, an insertion, and a clause in a body part clause, and other rules and regulations.

Funding Registration Requirements

Here are all Trust deed Registration Requirements:

1. Trust Deed on stamp paper and required stamp duty.
2. Passport size photo of trustees
3. Proof of residence ID of trustees
4. Identity proof document of trustees.
5. Passport size photo of witness
6. Proof of identity of two witnesses.
7. On each page of the title deed, the signature of the residence.

III. SOCITIES/ CO-OPERATIVE SOCIETY

Introduction:

A co-operative society which has its object the promotion of economic, social and cultural interests of its members, in accordance with co-operative principles, or a co-operative society established with the object of facilitating the operations of such a co-operative society may be registered under this Act with limited liability:

Provided that a co-operative society shall be registered only if it fulfils the viability norms with limited liability as prescribed for a co-operative society or class of co-operative societies to ensure that it is economically sound and its registration may not adversely affect the development of co-operative movement.

Persons who may become members:

No person shall be admitted as member of a co-operative society except the following, namely –

1. an individual competent to contract under section 11 of the Indian Contract Act, 1872 (9 of 1872);

• any other co-operative society;

• the Government;

• a firm, a joint stock company, or any other body corporate constituted under any law; and

• such class or classes of persons or association of persons as may be notified by the Government in this behalf

Restriction on Registration

1. No society other than a federal society shall be registered under this Act unless it consists of at least ten persons (each of such person being a member of different family), who are qualified to be members under this Act and who reside in the area of operation of the society.

• Explanation – For the purposes of this section the expression “member of a family” means wife, husband, father, mother, grand-mother, step-father, step-mother, son, unmarried daughter, unmarried step-daughter, step-son, grandson, unmarried grand daughter, unmarried sister, unmarried half-sister, brother, half-brother, and wife of brother or half-brother.

Documents which society shall submit to the Registrar:

1. Name of Society
2. Address proof of office premises
3. PAN card of members of the society
4. Id proof of members of the society (Voter Id/Driving License/Passport/Aadhar Card)
5. Residential Proof of members of the society (Bank Statement/Electricity Bill)
6. Occupation of members of society
7. a plan showing the area covered by the proposal and the surrounding land as shown

in the map or maps of the village or village affected;

• An extract from the record of rights duly certified showing the names of the owners of

the lands and the areas of the lands included in the proposal;

1. Statements of such of the owners of the lands as consented to the making of the

proposal signed by owners before two witnesses;

• A detailed estimate of the cost of implementing the proposal;
• A detailed statement showing how the cost is proposed to be met.