“The best and most beautiful things in the world cannot be seen or even touched they must be felt with the heart.” – Helen Keller
Some people want to leave their high profile jobs and turn to social work by devoting their time towards the promotion of certain social causes! But they are actually not aware of the process & formalities which are required to Register an NGO. Before that One must know about the Kind of NGO. There are three forms of NGO, the first form is Trust, second is Society & third is Section 8 Company. Trust & Society are very traditional Concept of doing NGO Registration & also everyone is aware of these two form of NGO Registration. Section 8 Company is very improvised & very refined version for running an NGO. But Most of the People are not aware of this new concept of forming NGO through Section 8 Company under Company Act, 2013. NGO by itself is very broad word & it covers all kind of Social entity's like Trust, Society & Section 8 Company etc. We have always heard about NGO's working towards social causes of the Society. Let's we understand how One can form an NGO & what are the objective's behind to form this kind of entity.
If you are also one of them, you must know that setting up an entity, such as Section 8 Company’s in India is not so simple task. But if you’re Committed & determined, there’s a hand for your help.
NGOs (Section 8 Company’s) are entity’s that generally work towards the promotion of certain social causes or the welfare of a society at Large. Since they have no funding resources, their main objectives and agenda of work are often diversified compared to for-profit organizations.
In order to achieve their main objectives, NGOs (Section 8 Company’s) need to follow a meticulous approach right from the stage of Incorporation. Although, there are rules and regulations issued by the Ministry of Corporate Affairs (MCA). Here is a short step-by-step guide for starting your own Section 8 Company in India.
The initial Step to start registration of Section 8 Company is processing of Digital Signature Certificate & Director Identification Number. DIN is a unique & specific identity in numeric terms like a Permanent account number. One person has only one Number. But it is not available for everyone, only Individuals can have DIN as it is allotted only to normal human beings, not to any Company or Partnership Firm or LLP.
Next Step is filing an application in Form INC-1 for reservation of foundation name to MCA. Once it is approved, it will available for a period of 60 days to proceed for final incorporation. Once Foundation name gets approved, there are certain documents has to be executed or affidavits have to be drafted for further submission.
3rd step is filing an application in Form INC-12 for Licence to Regional to your region for approval of Object or activities of your Section 8 Company. Regional Director has delegated its power to approve this form to their Concerned Registrar of Companies. Usually, ROC takes a time of 10-15 working days to approve this form.
4th Step is to file necessary documents in Form INC-7 to ROC again for final approval of the application for further final Registration & approval.
5th Step is to file an application for processing of PAN Card of Company so that one can open a bank account to start the operational activities.
People have a lot of confusion & myth's on 80G/12A license, as they don't know actual benefit's associated with these licenses. Accordingly, a person who gives donation's deprived of the benefit which Government of India provides to each donor in order to promote Donations for the support & benefit of Country.
80G & 12A Licence From Income Tax Department are advisable for all NGO's including Section 8 Companies. It allows NGO's to work in very efficient manner because NGO's will have a great opportunity to get Donations after these getting licenses. A person who donates any amount as donations to NGO's having 80G/12A Licence can claim deduction under Income Tax Act while filing his/her Income tax return. Although for Claiming deduction they would require 80G Certificate from NGO's.
12A registration provides benefit to that NGO by way of Tax exemption on its Income or on collected revenue. Ministry of Corporate Affairs (MCA) is the main regulatory body to regulate Section 8 Company. Apart from Income Tax Authority.
Niti Aayog Portal provides a common integrated platform by way of NGO Darpan to all NGO's registered in any form like Trust, Society & Section 8 Company where you can check the status of all NGO's at a single portal. It is mandatory for all NGO's to be registered in this portal. NGO Darpan organizes various awareness program time to time. After registration, NGO's can apply for Government grants through this portal which is very helpful for newly registered Organisations.