How to Register a NGO/Trust Society ?

NGO (Non-Government Organisation) is an organization that works for non-profit/ charitable purposes. In this article, we will explain how to register in ngo in the form of Section 8 Company, under Companies Act, 2013.

Laws in India applicable to an NGO

NGOs can be registered in India under any of the following laws:

• Trust under Indian Trusts Act, 1882

• Society under Societies Registration Act 1860

• Section 8 Company under Companies Act, 2013

Objective of NGO – Section 8 Company

The main purpose of establishing a  company as a Section 8 company is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports, research, etc. The profits/incomes of the company, if any, are applied towards promoting the objectives of the company and are not distributed as dividends to its shareholders.

A minimum of two directors is required if the Section 8 company is to be incorporated as a private limited company, and a minimum of three directors in case of incorporation as a public limited company. The maximum number of members is 200 in case of a private limited company, whereas for a public limited company, there is no such limit.

Also, there is no requirement of minimum paid-up capital in case of a Section 8 company.

a. Obtain DSC  (Digital Signature): Digital signatures of the proposed directors of the company are required as the forms for the registration process are filed online and should be digitally signed. Digital signature certificates (DSC) are issued by government recognized certifying agencies. The list of such certified agencies can be accessed here.

The cost of obtaining a DSC varies depending upon the certifying agency. You must obtain either a Class 2 or a Class 3 category  DSC. Under the Class 2 category, the identity of a person is verified against a pre-verified database, whereas under the Class 3 category, the person needs to present himself before registering authority to prove his/her identity.

b. Apply for Director Identification Number (DIN): You have to apply for a  DIN for the proposed directors of the company. The application for allotment of DIN has to be made in Form DIR-3. You have to attach the scanned copy of the necessary documents such as a self-attested copy of PAN, Identity and Address proof of directors along with the form and submit it online on the MCA Portal. The form must be attested by a practicing professional who can be a chartered accountant, a company secretary, or a cost accountant.

Procedure for incorporation of a Section 8 company

Step 1 –  Obtain a DSC of the proposed Directors of the Section 8 Company. Once a DSC is received, file Form DIR-3 with the ROC for getting a DIN.

Documents to attach for DIN application:

Proof of Identity and Address Proof.

Step 2 – Once the DIR-3 is approved, the ROC will allot a DIN to the proposed directors.

Step 3 – File Form INC-1 with the ROC for applying for a company name. A total of 6 names can be applied for in order of preference, out of which one would be allotted, based on availability.

Step 4 – After approval, file Form INC-12 with the ROC to apply for a licence for the Section 8 company.

Documents to attach with INC-12:

a. Draft MOA as per Form INC-13

b. Draft AOA

c. Declaration as per Form INC-14 (Declaration from Practicing Chartered Accountant)

d. Declaration as per Form INC-15 (Declaration from each person making application )

e. Estimated Income & Expenditure for next 3 years.

The subscription pages of the Memorandum and Articles of Association of the company shall be signed by every subscriber along with mentioning his name, address, and occupation, in the presence of at least one witness who shall attest the signature and sign and add his name, address, and occupation.

Step 5 – Once the Form is approved, a license under section 8 will be issued in Form INC-16.

Step 6 – After obtaining the license, file SPICE Form 32 with the ROC for incorporation along with the following attachments:

a. An affidavit from all the directors’ cum subscribers –  INC-9

b. Declaration of deposits

c. KYC of all the Directors

d. Form DIR-2 with its attachments i.e PAN Card and address proof of the directors

e. Consent letter of all the directors

f. Interest in other entities of the directors.

g. Utility bill as a proof of Office address

h. NOC in case the premises are leased/rented

i. Draft MOA and AOA

If the ROC is satisfied with the forms submitted, he issues a Certificate of Incorporation along with a unique Company Identification Number (CIN).