A Non Governmental Organization is perceived to be an association of persons or a body of individuals. An association of persons with non-profit motive may be registered under any of the following Indian Acts:
Procedures of Formation:
Trust: "Trust" is defined as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another, or of another and the owner.
A Trust may be created by any language sufficient to know the intention and no technical words are necessary. A trust deed, generally, incorporates the following:
A charitable trust is not required to obtain registration under the Indian Registration Act.
Society: A society may be defined as a company or an association of persons united together by mutual consent to deliberate, determine and act jointly for same common purpose. Minimum seven persons, eligible to enter into a contract, can form society. When an NGO is constituted as a society, it is required to be registered under the Societies Registration Act, 1860.
The chief advantage of forming a society are that it gives a corporate appearance to the organization, and provides greater flexibility as it is easier to amend the memorandum and bye laws of the society than in case of trust, terms of which are strictly manifested in the trust deed. However, formation of a society requires more procedural formalities than in case of a trust.
A Society for its inception requires:-
For the purpose of registration, following documents are required to be filed with the registrar of Societies:
Company: Under Section 8 of the Companies Act, an association formed or to be formed:
Is permitted to be incorporated without addition of the word "Limited" or "Private Limited". Procedure for applying is same as applicable in the case of all companies.
If the registrar is satisfied that all formalities have been complied with, he will issue a certificate of incorporation from which date the company comes into existence.
Note: An association already registered as a company, may also apply for a licence u/s 8.
INCOME TAX EXEMPTION FOR NGO
Under section 11, income derived from property held under trust is exempt if the following conditions are satisfied:
Societies are taxable in the status of AOP and different rates of tax are applicable to the income of an AOP in different circumstances:
A. Individual shares of members in AOP are not determinate:
B. Individual shares of members in AOP are determinate:
TAX EXEMPTION FOR NOTIFIED CHARITABLE SOCIETIES U/s 10(23C) (iv) and (v)
Any income of any institution established for charitable purposes is exempt. For getting exemption under these clauses, following requirement must be completed:
Requirements of Society Formation
Requirements of Trust Formation
Operational Requirements for a Society
An annual list of members of the management committee shall be filed to Registrar of society within 30 days of the AGM. However if no AGM is held for any reason as per society Registration Act 1860, section whatsoever, than an annual list of members of the managing Committee as on 31st December each year shall be submitted to the office of the Registrar of societies. Non submission of the list attracts a financial liability of Rs.50/- for the list of each year
Once in every year a list of the office bearers and members of the Governing Body shall be filled with the Register of Societies, N.C.T of Delhi as required under Section 4 of The Societies Registration Act 1860 and applicable to the National Territory of Delhi.
A : Governing Body Meetings
There shall be minimum four meetings of the Governing Body each calendar year, i.e. one meeting in every three calendar months.
B : Annual General Meetings
There shall be minimum one Annual General Meeting (AGM) of all the Members of the Society every year.
The AGM can be held at any time between April 1 to December 31 after the end of the financial year each year.
C : Extra Ordinary Annual General MeetingsFor any urgent or emergent matter like Admission/Resignation/Death of the Member / Change of Name/change of address /change of objectives /change of Rules & Regulation or any other major issue of the society.
Notice & Quorum
A Governing Body Notice
Minimum 10 days clear notice or as per Rules & Regulation of the society and the quorum shall be 1/3rd members of the Governing Body or as per Rules & Regulation.
B :Annual General Meetings
Minimum 21 days clear notice or as per Rules & Regulation of the society and the quorum shall be 3/5th members of the General Body or as per Rules & Regulation.
C :Extra Ordinary Annual General Meetings
Minimum 10 days clear notice or as per Rules & Regulation of the society and the quorum shall be 3/5th members of the Governing Body or as per Rules & Regulation.
Register Of Members
The Society shall maintain at its registered office a register or its members and shall enter therein the following particulars:
The General Body in its meeting shall elect all the office bearers after Five years or as per Rules & Regulation of the society by show or by secret ballot papers as required. The Quorum of the General Body shall be 2/3rd members of the Governing Body present or as per Rules & Regulation of the society.
Admission To Membership Of The Society:
A member shall fill the membership form to become a member of the society. The Membership shall be initially dealt with in 2 meetings of the Management Committee, One accepting it and the second confirming it, all the members of the society added/left during the year are to be discussed in the AGM also. A Register of member of the society has also to be maintained.
The financial year of the Society shall start from the 1st day of April and end on the 31st day of March in the following year.
The accounts of the Society shall be audited at least once in a year by a qualified firm of Chartered Accountant appointed by the Governing Body.
Any amendment in the Memorandum of Association and rules and regulation will be carried out in accordance with the section 12 & 12A of the Societies of Registration Act, 1860, as applicable to the National Capital Territory of Delhi.
Documents for amendments