I have been receiving a lot of questions related with the registration and functioning of the NGOs in India. I have written several articles on these topics and these have been very popular among. In today’s article, I will address a few frequently asked questions about NGO registration and functioning.
Before I begin, I think it is important for me to tell you about myself. Well, I am neither a lawyer nor am I a Chartered Accountant. I also have not studied any course that is even remotely connected with NGOs. I am web developer, technology blogger and a literature enthusiast. I do a lot of voluntary social work (mostly in the field of literature) and I also have registered a trust. This is the reason I know a few practical things about NGOs.
Now let’s begin with frequently asked questions.
Should I register a trust or a society?
Both trust and society can do social work as NGOs. The social work you do does not really get affected by whether you register the NGO as a society or as a trust. The main difference between trust and society lies in the controlling body of these two types of organizations. Learn the difference.
Where should I go to register my NGO?
Trusts are usually registered at the office of sub-registrar of your area. This is the office where sale/purchase of land property are registered. Societies are registered at the office of the Registrar of Societies of your area. If you don’t have any clue about where to go for registration, I would suggest that you go to the office of sub-registrar / tehsildar etc. and inquire about where to register your NGO.
Do I need to own office property to start an NGO?
No, you can start an NGO in a rented property as well. You will need a No Objection Certificate (NOC) from the owner of the rented property.
Can a government employee become a trustee?
Yes, a government employee can become a trustee in an Indian trust. See the details here.
Can an NRI become a trustee in an Indian trust?
There is no explicit restriction on an NRI becoming a trustee in an Indian trust. See the details here.
Can a Trustee take salary from trust fund?
You can not take compensation just for being a trustee in a public charitable trust. However, if you’re doing some professional work for the trust, you can take a reasonable compensation from the trust fund. Please note the word reasonable. It means that if you draw more compensation than market rate, that would be illegal and immoral. See more details.
How much money is required to start an NGO?
Well, in the registration process, you would need require 2 to 3 three thousand rupees. The amount varies depending on whether you use the services of a professional or you do all the work on your own.
If you take help from a lawyer/CA for preparing documents like trust deed, rules and regulations, memorandum of association etc. —you will have to pay them separately.
Social work is important for a better society.
How to draft a trust deed?
Trust deed is a legal document written in legal lingo and style. It is better that you find a good lawyer and tell him all the objectives of your social work. A lawyer will help you in drafting your trust deed. You must read and understand the trust deed thoroughly before getting it registered.
Can a CA help in drafting a trust deed?
I would suggest that you take services of a good lawyer instead of a Chartered Accountant. This is because trust deed is a legal document and, therefore, a lawyer is far better suited for preparing it.
Do I need to get my accounts audited every year?
Yes, if you have received 80G and/or 12A exemption certificates from the Income Tax Department, you have to get your accounts audited by a qualified CA every year. You also need to file Income Tax Return (ITR) every year.
How to get government funding for my NGO?
You should contact the appropriate ministry / department in the state or central government. There is no general procedure for getting funds from the government. It may vary from department to department. You need to first do some good social work. Then you should go to the appropriate government agency and tell them about your work and request for funding to continue doing your social work.
What is 80G exemption certificate?
80G is a certificate that you get from the Income Tax department. If an NGO has 80G certificate, then the donors of that NGO will get some tax benefit on the donation amount. Some NGOs are allowed to give 100% tax benefit but most of them are eligible for tax benefit on 50% of donation amount.
How to get 80G exemption for my NGO?
I have written a separate article to answer this.
What is 12A exemption certificate?
If you have 12A exemption certificate from the Income Tax Department, then all the donations you collect for your NGO will remain tax-free. If you do not have this certificate, then you will have to pay income tax on all the donations you are getting. So, it is very important to get 12A certificate.
How to get 12A exemption certificate?
When you apply for 80G certificate, you can also apply for 12A at the same time. So, when you apply for 80G, you should fill two forms: one for 80G (the form is called 10g) and the other for 12A (form is called 10a).
What is the validity of 80G certificate?
If you provide all the documents and the Income Tax department is satisfied, they will give you an 80G certificate with lifetime validity. Earlier the 80G certificate needed to be renewed every three years.
When can I apply for 80G certificate?
You can apply for 80G certificate right after registration of your trust/society. You don’t need to wait.
Where to go for applying for 80G certificate?
For applying for 80G certificate, you should go to the Income Tax office under whose jurisdiction your registered address comes.
Should I open a bank account for my NGO?
Yes, you must open a separate bank account for your NGO. The bank account should be in the name of your NGO and you should receive all the funds/donations in this bank account. You must not receive donations in your personal bank account because in such a case the donation will be considered as your personal income. And you will have to pay income tax on that.
Can I use words like “National” in NGO name?
You should avoid use of such words. The registrar will also object on the use of such word because the use of “National” may give impression to people that your organization is related with the government.
Is and Office or Landline Must for Registering the NGO?
You must provide a valid address to be registered as the office of your NGO. This address may be a residential address (your own home) or may be a rented house or a rented/own office space. In case of rented property, you would need an NOC certificate from the owner of the property. Having a landline is not must, but it is useful as it gives your NGO a means of communication.
Have more questions?
If you have more questions, you can post them in the comments section:
- You question must be in clear English because TechWelkin is an English language website.
- Be very specific in your question. I will not be able to answer vague questions.
- As I have said, I am not a lawyer or CA… so, I will not be able to answer that are very technical in this regard.
These were some of the frequently asked question about NGO registration and functioning. If you have anymore questions, please post them in the comments section. I will try and answer you. Thank you for using TechWelkin.
Hi Lalit- first of all I would like to thank you for the content you have published is clear, concise and helpful.
Query- We are registered as a society and not a trust. The society has been paying 2 of the resigned members (since 2014 till date) a certain fixed salary as remuneration since they were (technically as founders) initially responsible for opening a church as a society. They have long resigned and have no part in the administration or running of the society and no longer hold any office in the society.
Question:
A) Is it legal, to be paying them a salary when they are not providing any services as comitte members since they’ve have resigned since 2014?
B) Do we need their consultation as they were technically the founders but no longer hold any office in the managing committee, as we are looking to dissolve the society and move the funds to a new trust.
Sir, I become managing trustee after the founder has resigned the position. My registered place is Trichy(Tamil Ndaud) My place is karaikudi(TN). I keep filling auditng report from Karaikudi address. Do I need to inform the changes to office of Income tax. Can I have office anywhere in India. ours is a registered trust as per 1882 act.pl. calrify
Hi, A foundation was active till 2010. But now we would like to activate the same. Kindly explain the procedure to do the same. One of the member of the foundation is no more. Only the husband is alive and they have no children. Kindly explain.
Dear Lalit,
Can a trust in Telangana have same name as that of in Karnataka?
Example : ABC Charitable Trust(in Karnataka) vs ABC Foundation(in Telangana)
Understanding this is very important to me while forming my trust. Please help me with some knowledge.
Thanks
Dear Lalith,
Can 2 trusts in different states, use the same name?
Example : abc charitable trust(in karnataka) vs abc foundation(in telangana)
And also, what should the preferred extension of the website of a trust, .com or .org ?
Much thankful to the knowledge being shared by you.
I have a training institute being run from past 3 years with a cause to train and help underprivileged students with job. And i have done this for 200+ students.
Now i would like to register this training institute as an NGO, since i get many offers for donations.
Please suggest how should i register this as (eg., trust, society or company.)
Because i also charge the employer with consultation fees for getting them candidate for there company.
Dear sir
From where one can register an ngo at national level. Please mention the offices in India where the said task can be done. Can registration of national level ngo be done from any state of india.
Mr.Sing,
The functionality of a Trust is by default National level. In order to make society functional at national level 5/8 members should be from different states.
sir
we are going to form an ngo for national level from west bengal can we registered this from our state office or otherwise?
Dear Sir,
I am associated as trustee with charitable public trust, and provide my services towards operation of educational activities of said trust. My question is can I draw remuneration from trust account being trustee, is it legally correct.
Secondly I also need to know that in public trust if any investment is made do the trustees need to take approval from managing committee of the trust, and can public trust invest in Mutual Fund or Equity Shares.
You can take reasonable remuneration, but it is a subjective matter and you should really consult your lawyer to discuss if your “services towards operation of educational activities” entitles you to take remuneration. Typically, a trustee should try to avoid taking remuneration, if possible. As the investment, well, the Board of Trustees MUST approve any investment you want to make. I think you can invest the trust fund in MF or shares but it should be avoided because if you lose money — you will be losing public money due to your bad choice of shares/MF (which is morally not good). So, it is better to invest in safe instruments like fixed deposits.
Mr. Lalit,
can a trust or a society raise any sort of political issues?
hello… it is such a nice article… it helped me clear many doubts… but i still have some and i hope you will clarify them… I am a NRI residing in UK having intentions of starting a NGO (a charitable trust) in my native place in Andhra Pradesh. Can I name myself as the principle person of the trust (as I am a NRI)?? I have friends in other countries who are willing to donate for my cause.. Can I get donations in foreign funds into the trust bank account?? Is there a separate procedure for that??
can u arrenge all procedure in books for standing of an NGO
Dear Lalit Sir,
I would be very grateful to you if you kindly answer my following 2 queries.
1. Can a founder settler interfere in the working of the trust and can he/she remove the elected members by calling a meeting or can he include any member of his/her choice if vacancy exist in the trust????
2. Can a founder settler of any trust removed by rest other members if the founder settler claims any undue remuneration or passes instructions or orders for execution for personal benefits or vested interests? If yes what is the procedure please???
A principal charitable Trust having some property wants to settle a part of the property in favor of Hospital charitable trust for establishing a public utility hospital.
whether a trust can be settlor in another trust??
whether a deed of assignment can be executed by the principal trust in favor of Hospital trust, if so whether stamp duty is required to be paid??
or what is the other way of giving powers to the Hospital trust to permanently enjoy the settled property in its name??
whether a settler is required to be made trustee also??
can the hospital trust restrict/ limits the rights of the settler/ founder??
in what way??
whether a leave and licence agreement can be suffice to use the settled property permanently by the hospital trust??
I require your guidance and suggestions, which would be of immense help for establishing a public charitable hospital.
Thanking you;
Is it necessary to register the trust with the Registrar of Societies under the Society Registration Act after registering it in sub registrar office of my area?
No, Trusts are Societies are registered under separate acts. You don’t need to register a trust under the Society Registration Act.