Forming an NGO is a heavenly mission, as nurturing a sapling to become a powerful tree which will offer shelter and sustenance to the society. But if a sapling requires a good soil and climate to grow, your NGO too will need to have a good legal framework so that it will be able to adopt its programmed of action. In India, you can form a Trust, a Society, or a Section 8 Company. All three have their own merits and can be utilized for organizational needs and size of operation. Startupflora has tried to put everything in front of you so that you can make a logical decision and have a rightful platform for your welfare activities.
The Registration Base Value: Credibility Creation and Access to Resources
Your registration as an NGO is the compliance with the governance and setting up of credibility, access to finance, and law. The registered NGO gains the donors’, partners’, and benefactors’ trust and gets invested with a halo of credibility. Registration creates the potential for government aid, corporate fund, and charity donation. Selecting best suitable mode of registration is equivalent to selecting best available toolkit for your business intention and objective of your company.
Trusts: Built, Flexible, and Special Purpose
Trust is a legal device in which property passes to trustees and are held by the trustees on behalf of specified beneficiaries. Trusts are now utilized by fashion industry institutions with action from religion, education, and welfare uses localized within boundary to area level. Trusts have sufficiently operational machinery in so far as it involves registration along with free-float organizational style favorable to size-based enterprise as well as area/business level enterprise.
Merits:
- Easier registration process than Societies or Section 8 Companies.
- Greater autonomy in carrying on activities and assets.
- Best utilization in organizations where purposes are defined, well-defined.
Demerits:
- Less autonomous in carrying on business activities.
- May be less easy to access than other forms.
- May be less suitable for projects of national importance and high values.
Related Article: Society Registration: Building a Community-Driven Organization
Societies: Democratic, Community-Based, and Diversified in Nature
A Society is created by members directing their energies in common direction towards a single purpose, largely cultural, educational, or social. Societies are regulated by Memorandum of Association and Rules & Regulations with sole emphasis on democratic spirit and member participation. Societies are best suited for community work with varied field of operation.
Advantages:
- Democratic type of organization with committed member participation.
- Endless importance given to association with society.
- Freedom to aim very wide goals that are social and cultural.
Restrictions:
- Minimal membership conditions which are to be registered.
- Organisational structures may be more complicated in comparison to Trusts.
- Collecting humongous amounts of funds would be inconvenient in comparison to Section 8 Companies.
Section 8 Companies: Mature, Reliable, and Intended for Mass Reach
Section 8 Company as a section 8 company incorporated under the Companies Act, 2013 is a not for profit company with object and purpose of development of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment, or any 1 other such purpose. It is a section 8 registered company. It offers a professional and legal ambiance, best suited for organizations undertaking gigantic ventures at national and international level.
Key Features and Strengths:
- Used on non-commercial intent, plows to company benefit.
- Needs center government license, i.e., additional regulation.
- Section 8 company registration is compulsory by law.
- Section 8 company registration certificate provides genuineness.
- Section 8 company online registration is permitted.
- Section 8 company registration gets professional management.
- Section 8 company in india is in huge demand and trendy.
- It is recommended to learn section 8 of companies act 2013.
- Learning companies act section 8 is necessary.
Restrictions:
- More compliance and registration than Societies or Trusts.
- Minimum of two directors.
- Registration fees of a Section 8 company are more expensive.
The Registration Process: Important Points and Steps
Some requirements and steps in the registration process of each formation.
Trust Registration:
- Drafting of the Trust Deed.
- Stamp duty payment.
- Sub-registrar registration of the Trust Deed.
Society Registration:
- MOA and Rules & Regulations (Bye-laws) drafting.
- Submission of the application to registrar of societies.
Registration of the company under Section 8:
- Obtaining Digital Signature Certificates (DSC) and Director Identification Number (DIN).
- Approval of the name of the company.
- Filing of forms to Registrar of Companies (ROC).
The Right Fit: Aligning with Your NGO’s Objective and Purposes
Your proper application form choice is made after careful consideration of your NGO’s objective, mission, and mandate. Do keep in mind:
- Your overriding goals of organization.
- Geographic area of operation.
- Your budget and financial planning needs.
- Your governance and management plan.
- Whether section 8 registration is for you.
Startupflora Expertise: Guaranteed Success for Your NGO
Startupflora provides professional NGO registration advice and counseling. We possess
- Professional counseling to assist you in making a good-informed choice.
- Document preparation and form submission.
- Arranging online application.
- Coordinating on time and advising your setup and formation of your NGO.
We attempt to assist you with the best possible choice and firm base for your prosperous enterprise.