How to start an NGO in India

If you care for others and have desire to be your own boss, running an NGO may give you self satisfaction of serving poor people as well as running an organization.Thousands of non-government/non-profit organizations are working in India with the objective of rendering social service and extending help to the poor sections of socities which are deprived of resources, uneducated and unaware of different programs run by the government for their welfare. These NGO's are provided financial help by the Government to help them in their social activities targetted for upliftment of poor people. These organizations help government to implement its program like AIDS awareness, eradication of illiteracy, combating sprad of diseases and improving social living conditions of the poor people. In principle, these organizations work for a noble cause but there are few among these who misutilize the government fund for accomplishment of their self interests.

Section-25 of companies Act in India allows registration of non profit / public charitable organisations as a Trust, Society, or Non profit Company

These organizations in India are known as non-government organizations and have independant governing body or a board of trustees. These organizations generally work for benefit of poor and down trodden people and have a broad mandate of serving deprived people. These organizations are expected to help people by spreading literacy, spreading awareness among people about their rights, making people aware about different diseases and preventive measures, help people making them self-dependant by training them in different trades and doing several activities for general public's welfare.

Charitable purpose refers ‘relief of the poor, education, medical relief and the advancement of any other object of general public utility’.

Tax benefits:

• income of the NGO's is exempted from the tax.
  
• Donations to non-profit organisations are eligible for a rebate

Registeration process

I. Trusts

>> Indian Trusts Act 1882 is applicable in case of a trust but different states in India have different Trusts Acts in force.

Trust deed : It includes:

• the aims, objects and mode of management .

• the minimum (two) and maximum (no limit) number of trustees
  
• the mode of management
  
• procedure for appointment and succession of trustees.
  
• signatures of both the settlor/s and trustee/s in the presence of two witnesses.
  
• it should be executed on non-judicial stamp paper,
  
• the value of stamp paper would depend on the trust property.

Click the link to see the format of a "Model Trust Deed"

The Board of Management: The trustees are members of the Board.

• Application for Registration to be submitted to the official in the region where the trust is sought to be registered.

• Affix a court fee stamp of Rs.2/- to the form and pay registration fee (may vary from Rs 3 to 25, depends on the value of the trust property).

• The application form should be signed by the applicant before the regional officer/superintendent of the regional office of the charity commissioner/notary.
  
• Attach a copy of the trust deed, an affidavit and consent letter with the application form

II. Society

• The registration of Societies is goverened by Societies Registration Act, 1860,
  

• Minimum number of management committee members is seven
  
• The Board of Management comprises a governing body

• Registration offices are located at the state (the office of the Registrar of Societies), the district level or the local office of the Registrar of Societies.

• The memorandum of association and rules and regulations are not reuired to be executed on stamp paper.

The application should be submitted in duplicate alongwith registration fee and following documents:

1. memorandum of association and rules and regulations,

2. consent letters of all the members of the managing committee and

3. authority letter duly signed by all the members of the managing committee, 4. an affidavit by the president or secretary of the society on non-judicial stamp paper of Rs.20-/, together with a court fee stamp;

5. a declaration by the members of the managing committee that the funds of the society will be used only for the purpose of furthering the aims and objects of the society.

To see the format of different forms and covering letter click "model forms"

III. Section-25 Company

• A section-25 company can be established for promoting commerce, art, science, religion, charity or any other useful object’,
• The income generated must be used for promoting  the objects of the company
  
• Dividend can not be paid to the members of the company.

• Section 25(1)(a) and (b) of the Indian Companies Act, 1956, are applicable for eatablishing a company
  

Procedure:

• There should be a minimum of three trustees;
• The Board of Management comprises either of a Board of directors or managing committee.

• An application has to be made in the prescribed form no. 1A, along with a fee of Rs.500/-.
  
• Suggest three other names by which the company will be called in case the first name is being used by other company or not found acceptable by the registrar for any reason.

• After finalization of the name application need to be submitted to the regional director of the company law board.
  

The application should be accompanied by the following documents:

• Three copies of the memorandum and articles of association of the proposed company, duly signed by all the promoters with full name, address and occupation and endorsed by an advocate or a chartered accountant.

• Three copies of a list of the names, addresses and occupations of the promoters and members of the proposed board of directors,

• Statement about the assets  and the liabilities of the association,

• An estimate of the future annual income and expenditure of the proposed company

• Brief description of the work, if any, already done by the association and of the work proposed to be done by it after registration

• A statement specifying briefly the grounds on which the application is made.

• A declaration about physical fitness/no criminal proceedings  by each of the persons

• The applicants have to publish a notice in a newspaper in a principal language of the district and at least once in an English newspaper circulating in that district.