What is an NGO?

A NGO or non-governmental organisation is a not-for-profit entity that typically does work for the welfare work for poorer sections of society or toward a particular cause. Their focus may be environmental, on human or animal rights, improving health and welfare of children, development work or even raising awareness about a particular cause or activity, such as art. That said, many NGOs may also be fronts for political or religious interests.

Being not-for-profit, these entities cannot pay out any profits as dividends to members; instead, any profit must be reinvested toward the cause. NGOs raise money from donors, who may or may not receive tax breaks on their donations. In India, an NGO can be set up as a trust, section-8 company or a society.

An NGO can be started under three Acts: Indian Trust Act, Indian Societies Act & Companies Act

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  • Register Entity
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Essential Facts on NGO

Trusts are managed by the trustees, while the society’s functioning is managed by a committee or the managing council. A Section-8 company, on the other hand, has a board of directors. A trust must have at least two trustees, while a society requires seven (in case of a state-level society) and eight (in case of a national level society) committee members. A section-8 company requires two members for a private limited company and seven members to register it as a public limited company.

A trust is governed by the Registrar of Trusts. Therefore, the Trust Deed needs only to be registered with it. A society is governed by the Registrar of Societies. Section 8 companies are overseen by the Registrar of Companies as well as the commissioner of the relevant state where they are set up; such a company, therefore, needs to be subjected to an audit each year.

It takes up to 20 days to register a trust, up to 45 days to register a society and up to 75 days to register a Section-8 company.

There are three types.Under Indian Trust Act, 1882,Under Indian Societies Act, 1862 and Under Indian Companies Act, 2013

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