If you look around the society there are many problems which society is facing. These problems can be related to education, environment, standard of living, poverty, unemployment, etc. The government always tries to solve these problems with its different schemes. But the government is not the only one, there are some organizations that are also working for the welfare of the society. Commonly these organizations are known as NGOs. The full form of the word NGO is a non-government organization. As the name itself suggests these are an organization that are not related to the government but working for the welfare of society just like the government.
There are a total of three types of NGOs in India. These are Society Registration, Trust Registration, and Section 8 company registration. They are governed by different laws that are the Society Act of 1860, the Trust Act of 1882, and the Company Act of 2013. NGOs are registered for philanthropic works. The two most complicated things about NGOs are to get certified as an NGO and to choose one NGO out of the three types. In the current blog the process of certification of an NGO will be discussed in detail. After reading this blog it will become very easy to get certified as an NGO.
What are the Different Types of NGOs?
There are a total of three types of NGOs in India. You can choose one out of these three and get certified as an NGO. The definitions of these three NGOs are given below:
Society Registration
A society established under the Societies Act in India comprises at least seven members and is driven by altruism, dedicated to community betterment without profit motives. These registered societies focus on goals like advancing science, promoting art, aiding those in need, supporting education, operating within legal recognition, and government-approved causes.
Trust Registration
Trust can be registered with the three parties they are trustor, trustee, and beneficiary. In a trust assets of a third party that is beneficiary has been managed for his benefit by the trustee. Trust registration is working for the benefit of the beneficiary. The trustor and trustee do not have any profit motive here. Trusts are governed by the Trust Act, of 1882.
Section 8 Company Registration
The NGO with the widest scope is Section 8 company. The process of formation of this kind of NGO is just like the other company registration under the Companies Act. This can be registered online without going anywhere. Such kinds of NGOs can work nationally and internationally once they get certified as an NGO.
Process to Get Certified as an NGO
Getting NGO certification in India, registration or certification as per the country’s laws and regulations is needed. Follow the steps given below for obtaining NGO certification:
Select the Suitable Legal Structure
Choosing an appropriate legal structure for the NGO is the first step towards NGO registration. NGOs can be registered in three forms in India. These three forms include trust, society, or Section 8 company. Each structure has its own requirements, advantages, and disadvantages, so it is important to select the one that meets your institution’s objectives and requirements.
Collect all the Relevant Documents
After choosing one type of NGO out of its three types, the next step is to collect all the relevant documents. Without documents, one cannot proceed to get certified as an NGO. Some basic documents that are mandatory for all three types of NGO registration are KYC documents, contact details, email ID, address proof, DSC, DIN, office address proof, bank statement, etc.
Register the NGO
The next step to get certified as an NGO is to take registration. Societies need to get registered before the Registrar of Societies, trusts before the relevant state authority, and section 8 companies before the Registrar of Companies. Registration broadly involves three steps. First is to submit a registration application before the authority. Second is verification and third is either a registration certificate or rejection of an application.
Obtain PAN and TAN Numbers
After the official registration of the NGO, contact the Income Tax Department to obtain PAN and TAN numbers for the NGO. These numbers are essential to collect and receive tax-deductible donations. Hence one must apply to obtain PAN and TAN just after getting certified as an NGO.
Obtain 12A and 80G Certificates
All NGOs need to get 12A and 80G certification from the Income Tax Department to get benefits under the Income Tax Act. The 12A certificate is for the income tax exemption, while the 80G certificate is for the claim of tax deductions on donors’ contributions. Both certificates together are referred to as tax exemption certificates in India.
Register for FCRA
If you get certified as an NGO which is going to get financial support from foreign then it is mandatory for your organization to get registered under Foreign Contribution Regulation Act (FCRA). To get this registration one needs to submit an application before the Ministry of Home Affairs. They will verify the documents and if satisfied you will get registered under FCRA.
Register for GST
If any NGO is involved in commercial activities and has a turnover of up to 20 lakhs or more than that, then they have to take GST Registration. As it is mandatory after a limit. GST Registration is an online process. With the help of the GST online portal, the application for registration needs to be submitted with all the relevant documents. After the GST department will examine the application, if satisfied a GST number will be issued.
Maintain Proper Records
To comply with rules and regulations of the NGO maintaining accurate records is required as per the law. The compliance needs to be complemented with the demonstration of the impact of the NGO’s work. This includes but is not limited to donations tracking, expenses, activities management, preparation of annual reports, filing tax forms, etc. with the appropriate authorities.
Conclusion
The process to get certified as an NGO in India involves multiple steps that must be followed in sequence. The main thing about NGO registration is documentation, if documents are complete and correct one can easily get certified as a non-government organization. From selecting the appropriate legal structure for the organization to registering it with government authorities and then obtaining essential certificates, and maintaining proper records, each step is important to ensure legal recognition and compliance with rules and regulations.
