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MS Legal Associates:
Societies Registration Act, 1860 is a central act for registering not-for-profit organisations. Almost all the states in India have adopted (with modifications, if any) the central Act for creating state level authorities for registering various types of not-for-profit entities. According to the act any seven persons who subscribe to the Memorandum of Association (MOA) can register a society. The memorandum should include names of the society, its objectives, its names, addresses and occupations of the members subscribing to it as well as the first governing body to be constituted on registration. NGOs like Bal Vikas Dhara-New Delhi, Bruu Foundation New-Delhi and Nayi Umeed-New Delhi are registered under this act.
NGO is now a widely used word denoting to registered trusts, societies, cooperative societies, endowments, non-profit companies, etc. working for the welfare, development and progress of people and in a way supplement similar functions of the state and hence, called as Non-Government Organisations (NGOs)..
NGO may be defined as association having a definite cultural, educational, economical, religious or social association organization. They are not owned by any one and cannot distribute profits as such. Whatever profits they may earn from economic activities are reinvested or spent on appropriate non profit activities. The typical sources of revenue or non governmental organizations are donations, membership fees, interest and dividends on investments.
NGOs are defined by the World Bank as "private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development"
NGO organizations operate with their own fund and with the funds raised through its volunteers or through donation for a social cause.
Sometimes the Government use to fund the NGO organization totally or partially in project based or in object and social activity based. To monitor, to assist NGO our Indian Government allocated the Social welfare Ministry which supports to do several welfare activities as per the need and desire of NGO organization.
As the NGO organizations are operating as a legal entity, Indian government encourages such nonprofit organization to make them eligible with specific certifications, tax exemptions, additional power of importing funds through special permission from Indian Government and special project implementations through Social welfare ministry of India.
Why should one go for registering an NGO?
Various Voluntary organization & Institutions are working together for the welfare & development of the Society. Any person or the entity has a right to carry on development work irrespective of having any formal registration. However, if we view it from legal angel any organization which is not registered has no legal entity. It has no importance in the eyes of Law. Thus it is important that all voluntary organization should get themselves registered under any preferred law, particularly when it is going to deal with the government frequently or interested to avail officially permitted public funds or foreign donations and grants activities.
NGO does not have to register itself to perform charitable, welfare or developmental activities. However, there are some specific types of activities that can only be carried out if the NGO is registered under the country's specific acts or laws governing NGOs (particularly related to fund-raising). In fact, a group can call itself an "NGO" only after it has registered itself.
There are also certain important advantages an NGO may gain upon registration, which it could otherwise not take advantage of. Ideally, due to obligations required of a registered NGO, the registration process leads to the development of systematic thinking and functioning of NGOs.
Registered NGOs obtain legal status in order to enable them to interact at the official level, and among donors and other organizations. Members are able to represent the organization,
NGO can open a bank account in the name of the organization, or sign contracts in the name of the organization.
A registered NGO can also qualify for financial assistance from government agencies and local, national and international donors.
Recognition to the society at all forums and before all authorities.
Obtaining registration and approvals under Income Tax Act for availing Exemption of Income Tax.
Other benefits that are believed to flow from registration are guidance and help from relevant registration authorities, contract funds and support from the relevant departments, tax exemption from certain incomes, training opportunities, technical assistance, and concessions when obtaining vehicles, equipment and commodities. However these benefits are not uniformly spread across all types of registration, nor are all NGOs are able to claim them.
NGO plays a vital role in the social welfare & development of poor, Women & disadvantage group by providing basic needs & facilities to the above group. In India, NGOs (non governmental organizations) are increasingly playing a balancing role between the state and citizens to ensure the latter's easy access to fundamental rights and state/central government's developmental schemes. Being an interface between the common people and government administration, an NGO's role in streamlining the services for the masses is vital for the healthy functioning of any democracy.
A Non-Governmental Organisation (NGO) can run as a registered or non-registered group of people. However, it is better to get it registered under any preferred law, particularly when it is going to deal with the government frequently or interested to avail officially permitted public funds or foreign donations and grants.
Non-profit organizations can be registered as:-
(1) Trusts: The public charitable trust is a possible form of not-for-profit entity in India. Typically, public charitable trusts can be established for a number of purposes, including the relief of poverty, education, medical relief, provision of facilities for recreation, and any other object of general public utility.
(2) Societies: Societies are membership organizations that may be registered for charitable purposes. Societies are usually managed by a governing council or a managing committee. Societies are governed by the Societies Registration Act 1860, which has been adapted by various states. Unlike trusts, societies may be dissolved.
(3) Private limited company under Section-8 Company. :A section 8 company is a company with limited liability that may be formed for "promoting commerce, art, science, religion, charity or any other useful object," provided that no profits, if any or other income derived through promoting the company's objects may be distributed in any form to its members.