How to set up your NGO

There are many legal forms that your NGO could take. How do you know which one is the best for you? There are no real statistics on the number of NGOs in the country. The estimates vary widely, with a recent article putting the number at over a million. And less than half of these are legally registered. Before we go further, what exactly is an NGO? Short for Non Governmental Organization, NGO is not an easy term to define. Generally, they are taken to be not-for-profit organizations that work on one or many developmental issues. Way back in the „nineties, the World Bank tried to work out a comprehensive definition of the term (see box). The fact is that you do not have to register an NGO to do not-for-profit, developmental work. But being a legal entity helps, particularly when you want to get funding of some sort, or when you want to make the organization big, bring in professional management or when you want to work in certain sensitive areas. What is an NGO? “The diversity of NGOs strains any simple definition. They include many groups and institutions that are entirely or largely independent of government and that have primarily humanitarian or cooperative rather than commercial objectives. They are private agencies in industrial countries that support international development; indigenous groups organized regionally or nationally; and member-groups in villages. NGOs include charitable and religious associations that mobilize private funds for development, distribute food and family planning services and promote community organization. They also include independent cooperatives, community associations, water-user societies, women‟s groups and pastoral associations. Citizen groups that raise awareness and influence policy are also NGOs.”

And the author could also be the trustee.Where do I register? . In case a state does not have a specific Act. A trust is set up on a basis of a trust deed and cannot be dissolved unless it is provided for in the trust deed. to start with) and beneficiaries of the trust. Charity is a matter of state jurisdiction. if you want to start small or if you do not have many people who share your vision or objectives. which of these options should you go for. .World Bank There is more than one way in which you can register an NGO—four to be exact. Trusts also get tax exemptions on parts of their income. Other state acts are more or less similar to the Bombay Trusts Act. There are also private trusts governed by the Indian Trusts Act of 1882. governs all public charitable trusts in the state of Maharashtra. The Societies Registration Act of 1860. per se. a trust. For example. 1950. For a trust to be formed. says Rodney Ryder. It all depends on the requirements of the person or the organization seeking registration”. there has to be the author or the person at whose instance the trust comes into existence. It is difficult to pick any one and say that this is the best form to get an NGO registered. then the general principles of the Bombay Public Trusts Act. the State Cooperative Societies Act or the Multi-state Cooperative Societies Act or the Companies Act of 1956. is quite similar under all the Acts. You can register as a society. So. jurisdiction under which registration is possible. given your circumstances? Why should you choose. The process. 1950. Now the question is. the documents required. say. So. mode of succession of management and such. Choosing the right Act is not that difficult as there are certain characteristics of all the Acts that are specific to some circumstances. the Bombay Public Trusts Act. different states have different legislation in the form of trusts or endowment Acts to govern and regulate public charitable trusts. like the minimum number of people required. All these come under separate Acts—Bombay Public Trusts Act of 1950. a clear intention by the author to create a trust. the difference being in where to get registered and other procedural details. a purpose for the trust. apply. But that is outside the scope of this discussion. then a trust is your best bet. property belonging to the trust (usually bequeathed by the author as part of the trust deed. specifically Section 25 of the Companies Act. a society over a trust or a Setion-25 company? “There are merits and demerits attached to different Acts. a practicing lawyer and partner with FoxMandal Little. The ownership of the trust is divested by the author in favor of the beneficiary or the trustee. Public or Charitable Trust A trust is the easiest to get started with as the minimum strength required to form a trust is just two—the author and the trustee. a cooperative or as a not-for-profit company.

While this is an all-India Act. In terms of documentation.” However. better known as trustees. provision of facilities for recreation. “A trust is like a partnership—one for all. equally. “When it comes to a trust. education. each state has its own variations. In Maharashtra and Gujarat.Between a trust and a society. As per the law “every society registered under the Societies Act may sue or be sued in the name of the president.” 0023779790751 email address njangk@yahoo. Public charitable trusts can be established for a oses. under this Act. in the name of such person as shall be appointed by the governing body for the occasion. all the decisions.” says Rodney Ryder. While registering. Whereas a society is similar to sole proprietorship—one person makes all the decisions and the work is fast”. and any other . a trust offers more democracy and transparency than any other form of registration. “if a judgment shall be recovered against the person or officer named on behalf of the society. Societies are registered under the Societies Registration Act. as shall be determined by the rules and regulations of the society. or principal secretary. and. concludes Ryder. medical relief. chairman. all for one. in default of such determination. all societies must also simultaneously be registered as trusts under the Bombay Public Trusts Act. 1950. Though there is a head of the committee designated as the chairman. Society A society requires a minimum of seven individuals to come together and may be wound up if three-fifths of the members of the general body so desire. you would be required to be present personally to submit these documents to the charity commissioner of your state.com GO itable trust is a possible form of not-for-profit entity in India. the number of trustees (a minimum of two) and other details about your trust. which sets out the aims and objectives of the trust. including the relief of poverty. the Act empowers all the members. for example. but the fallback for a trust is the fact that all the trustees are equally empowered and one dissenting partner can be the cause of the trust to become non-productive. are taken after discussion with all the trustees. such judgment shall not be put in force against the property or against the body of such person or officer. the main instrument for the registration of a trust is the trust deed. This sometimes can end up in delays and the functioning gets cumbersome. but against the property of the society. or trustees.

022-24935516 re the steps to be taken while registering the NGO under the Bombay Public Trust Act 1950 on for registration of a public charitable trust should be submitted under section 18 of the BPT Act 1950 to the ant Charity Commissioner having jurisdiction over the region / sub-region in which the trust is sought to be application should be made in a prescribed form (Click here for annexure V) which is available at the office of ssioner or Deputy / Assistant Charity Commissioner. odule. 25. o divest the trust property upon the trustee(s). 3. whenever in doubt ms and objectives. we will discuss the procedures in relation with three legislations given above. y ssioner is an authority to provide legal identity to any NGO. (Click here for annexure III) n is being made in Maharashtra and Gujrat. mental / Profit Organization could be registered under any of the following Indian Acts: ble Trust under Bombay Public Trust Act 1950 (click here for annexure I) registered under the Societies Registration Act 1860 – A Central Statute annexure II) ny licensed under section 25 of the Companies Act 1956. generally. es. the value of which would depend on the valuation of the trust . A Trust may be language sufficient to know the intention and no technical words are necessary. But it can also be liquidated by he situation demands. if any. incorporates the following… of the author(s)/settlor(s) of the trust. Indian public trusts are generally irrevocable in nature. of any other state. of the beneficiary/ies or whether it shall be the public at large. telephone bill. fee levied is Rs. ration could be anywhere in India. B of above. of the trust re for appointment. The application should be submitted together with the copy of Trust Deed.e. duties and powers etc. as to affix a court fee stamp of Rs. This application should be supported by covering letter (Click here for annexure VI)B. mode of succession etc. later for verification which is the important and mandatory instrument of Trust. for the oluntary organization.00 on the form and pay the registration fee in cash which may range from 25. of the trustee(s). Fill up the form accordingly with details of name of Trust. mode of succession or any issue concerning the management of the trust. or bank pass book details for the registered office of organization. Charity Commissioner’s office is located at the following address ukta Building nnie Besant Road 400018. d duties of the beneficiary/ies.00. it is Rs. Although NGO is registered in a specific regional office. Concerned regional office of Deputy / Assistant Charity should be contacted for the process of NGO registration. it has to be registered under A and B of above Acts.al public concern and utility. they may have their own state legislature along with the central statue i. Along with these formalities there is a need ss proofs such as electricity bill. 25000/-. 2000/-. The original eed may be produced. removal or replacement of a trustee. -24935474. that shall devolve upon the trustee(s) under the trust for the benefit of the beneficiary/ies.100.00. (Click here I for copy of model trust deed) The Trust Deed is a document that every trustee must turn to.00 depending on the value of a trust’s property. their rights. D. d method of determination of the trust must be executed on non-judicial stamp paper. If the value of the trust’s property does not exceed Rs. If the value exceeds Rs. here its principal and/or other offices shall be situated. which the trust shall be known. on form should be signed by the applicant before the regional officer or superintendent of the regional office of the ssioner or the Notary.

and another is Societies Registration Act 1860. Memorandum of Association in duplicate (Click here for annexure XII) need not to be executed gulations need not to be executed on stamp paper ers of all the members of the managing committee (Click here for annexure XIII) er duly signed by all the members of the managing committee (Click here for Click here for annexure XV) sworn by the president or secretary of the society on non-judicial stamp paper of her with court fee stamp by the members of the managing committee that the funds of society will be used only for the purpose of ms and objects of the society. A notice pplicant about the day and time of the formal hearing is dispatched usually 10 to 15 days in advance. property is the property of trust whole or any substantial portion of the subject matter of the trust is situated within his jurisdiction nd the addresses of the trustees and managers of trust succession to the office of the trustee of trust succession to the office of the trustee ature and object of trust of gross average annual income and expenditure of trust ticulars as may be prescribed under sub-section (5) of section 18. hence an application should also be made u/s 18 of the Trust Act 1950 which we have discussed earlier. or other income in promoting its objects and prohibits the payment of any members. On the lost or damage of such certificate over the years. Whether a trust exists and whether blic trust.00 ter (Click here for annexure IX) which may be prepared on the ordinary sheet of paper and signed by the trustee/s rustee making an application. s are inquired by deputy/ charity commissioner at the time of verification.ding to article 61. the deputy/assistant charity commissioner makes the entries on the register kept 7 of BPT Act 1950 (Click here for Annexure X) and issues a Certificate of Registration which bears the official seal number of the trust. The o appear in person or can depute his or her lawyer. for “every five hundred rupees or a part mp is Rs. NGOs registered with charity commissioner needs the registration under two distinct acts. A society may be defined as an association of persons united together by mutual consent to rmine and act jointly for same common purpose.. The application for registration of a society should be made to gistrar of societies who is nothing but the assistant charity commissioner having jurisdiction over the region/subthe society is sought to be registered. of the Bombay Stamp Act. which must be made in the prescribed form no. then the government may. Trust Deed should be the settler/s and trustee/s in the presence of witness. art. by a license. The original trust deed should be produced for verification at ing.1956. The witness might be a friend or relative. egistration for Societies under Societies Registration Act 1860 . the company for the promotion of commerce. Minimum seven persons. charity or any other useful ntends to apply its profits. 10. if any. Both these legislations are considered while arity trust or NGO. it is required to be registered under the tration Act. science. One was BPT Act have seen earlier. It is advisable to use both the sides of paper. 20. of charity organization / NGO under section 25 of Indian Companies Act 1956 dian Companies Act . 1A (Click here for annexure . The application (Click here for annexure XI) should be submitted in together with. Here. In the state of Mahrashtra since the registrar of societies is the charity all the societies also have to be registered as a trust. direct that the association be registered as a company with without the addition to its name the word “Limited” or “Private Limited” Following are the steps to be taken to anization under sec 25: owards registration of a company (under section 25 of the Indian Companies Act) is the application for the ame to the registrar of companies. we will understand various aspects which need to be taken care of while registering the cieties Registration Act 1860. eligible to enter into a contract. F. 1860. quiries on the aforesaid issues. G.00. B. Two other ch should be submitted at the time of making an application are (1) Affidavit (Click here for annexure VIII for the affidavit) which must be sworn by trustees before a notary and executed on non judicial stamp paper of Rs. When an NGO is constituted as a society. can the steps to be taken to register the society:A. the duplicate certificate could be plication and on payment of nominal fees. together with article 13. other than the stamp paper. a. Processing the application usually takes about six to eight weeks. i.

8. It is advisable to choice three other names by which the company will be called. address and occupation (Click here for annexure XVII) by an Advocate / Chartered Accountant that the memorandum and articles of e been drawn up with conformity with the provisions of the Act 3. 4. and at least once in a English newspaper circulating in that district. specifying the sources of the income and the objects of the A statement giving a brief description of the work. if any. annexure XVIII)· The application should also. partners and members of the proposed board of directors are d responsible positions. Normally it takes two to three months to accomplish the entire here for Entire model document is given as annexure XX. in ame which is proposed is not found acceptable by the registrar. together with the names of companies. · It is in the hands of regional y all the facts and then to provide a license. 1. A declaration by each of the person cation stating that he / she is of sound mind and not having any insolvency. not convicted by the court of any es not stand disqualified u / s 203 of the companies Act 1956. gement of Philanthropic Organizations by Noshir H Dadrawala FMSF India. Three copies of a list of the names.00. d other institutions in which such promoters. Three printed or typewritten copies of Memorandum and Articles of Association of the proposed signed by all the promoters with their full name. publish a notice in the prescribed manner annexure XIX) at least once in a newspaper in a local language of district in which the registered office of the any is located.with the fees of Rs. . A statement showing in detail the assets ated values thereof) and liabilities of the organization as on the date of application 5. 500. The application should be accompanied ocuments. if any. for appointment as director. An estimate of the future and expenditure of the proposed company. already done by the organization and proposed to be ement specifying the grounds on which the application is being made. within a week from the date of making an application to the regional ompany law board. with description of the positions so held. Once the availability of name is finalized the to be made in writing to the regional director of the company law board. addresses s of the promoters as well as of the members of the board of directors.

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