Formation of NGO India

By Team Legal Helpline India, December 27, 2014

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Formation of NGO India is governed by various set of laws which basically stress upon the aims and objectives of NGO and the activities of the NGO. The word NGO stands for Non Governmental Organization which is in the context of the social welfare activities assigned by the Government to some of the organizations which the Government is not in a position to execute. The funding of the activities of NGO is done through the Government funds but the freedom to execute is given to the NGO. This grants a level of freedom to the NGO to operate and deliver the work assigned to it. In most of the cases NGO acts an important adjunct between Government and the public and helps the Government in translating its aims and objectives.

As a Registered Society: A NGO can be formed by a Society under The Societies Registration Act, 1860 after complying with all the provisions related to its formation. The set of rules governing the formation of a Society are different from State to State however by and large the process is common in most of the States. Formation of NGO India is mostly done by forming a Society which is a group of seven desirous persons who agree to form the Society subject to the compliance of the law and the rules and regulations formed in this regard by way of the Memorandum and the Bye laws of the Society.

Guidelines for the Formation of NGO India for the name of Society:
The name of the society proposed should not attract the provisions of The Names and Emblems (Prevention of Improper Use) Act 1950 i.e. the name proposed should not imply any connection with Government of India, or Government of State or any connection with legal authority
The name proposed for the registration of the society should not be identical to name of any other society which has already been registered or resembles such name likely to deceive the public or the members of the society.
There is prohibition of use of any name, emblems, official seals specified under the Names and Emblems Act without permission of the appropriate authority.
There is prohibition of the use of the name of the national heroes or other names mentioned in the Names and Emblem Act,1950 .
The registrar of Societies can be approached with alternative names to ascertain whether the same are not undesirable and are not being used by any other existing societies.
The name of the Society should not suggest obscenity or be against decency and decorum. It should not be undesirable in the opinion of the Registrar.


STEP-I: Constituting a group of seven desirous persons agree to form the said society.
STEP-II: Selecting the name of the proposed Society and getting it approved by the Registrar of the concerned district. In case of all India Society the name is cleared by the Ministry.
STEP-III: Submitting the deed of society as per the Society Registration Act 1860 and all other standing orders issued from time to time which contains the rules and regulations for running the society and the bye laws.
STEP-IV: Obtaining a NOC from the owner of the premises where the office of the society is proposed to be located.
STEP-V: Filing the proof of residence and identification of the desirous persons.
STEP-VI: Presenting the society documents alongwith all the relevant documents and the drafted deed before the registrar for registration.
STEP-VII: Issuance of the Registration Certificate by the Registrar of Society.
STEP-VIII: Obtaining a PAN card for the society from the Income Tax Department.
STEP-IX: Opening a bank account for the society for the regulation of funds of the society.
STEP-X: Getting the exemption under Section 80 (G) of the Income Tax Act for exempting the donations from taxation.
STEP-XI: Getting clearances from RBI for receipt of foreign funds in the society.
STEP-XII: Filing of ITR for the society after the end of the financial year.

Compliances in Formation of NGO in India as a Society:
Request letter to the Registrar of Society on the letter head of the proposed society to be submitted before the Registrar concerned.
Two sets of neatly typed Memorandum of Association of the Society including the list of the Governing body and all the desirous persons be filed before the Registrar concerned.
Two sets of neatly typed Rules and Regulations framed for the operation and functioning of the Society to be filed before the Registrar.
Affidavit on the Stamp Paper of Rs-10/- duly sworn by the President/Secretary of the Society as per the format issued from the office of the Registrar.
Copy of the proof of residence of the desirous persons with their photographs.
Proof of the legal ownership of the office of the Society and non objection affidavit by the owner of the premises regarding the location of the office of the Society.
All pages to be signed by the President, Vice President, General Secretary of the Society.
In case of management of or reference to a particular existing places of worship like Mandir ,Gurudwara, Masjid, Church or Boudh Vihar etc. is involved, then sufficient documentary proof is required that the society is legally competent for the same.

As a Registered Trust:A Registered Trust under the local laws of the respective State is also recognized as a NGO and often Government assigns the work related to NGO to the Registered Trusts. The process of registration of a Trust is very easy and simple as a person can register a Trust as per his choice and nominate or appoint any number of trustees besides appointing a settler for the Trust. The Trust can thereafter obtain all the permissions related to financial transactions and operate as a NGO.


Any legal entity can establish a Trust in India through a registered Trust Deed which becomes a legal entity. All activities of a NGO can be done through the aims and objectives of the said trust. The registration of Trust in India involves the following simple steps:
STEP-I: Selecting the name of the trust.
STEP-II: Drafting the Trust Deed which should contain all the important aims and objectives of the trust.
STEP-III: One settlor or trustee can also run the said trust however a board of trustees can be also named and several persons can be involved in the running of the trust.
STEP-IV: Getting the PAN card for the trust after its registration.
STEP-V: Opening a bank account for the trust after its registration.
STEP-VI: Getting the exemption under Section 80 (G) of the Income Tax Act for exempting the donations from taxation.
STEP-VII: Getting clearances from RBI for entitling the trust for receipt of foreign funds.
STEP-VIII: Filing of ITR of the trust.

As a 25A Company: Under The Companies Act, 1956, there is a provision under Section 25 to form a Company subject to the condition that the profits earned from the operation of the said Company shall be spent only for the purposes of the fulfillment of the aims and objectives of the Company and no dividend is to be paid to the promoters or share holders. The formation of NGO India is not so common and popular as it requires more level of compliance of the law and procedural requirements however it is a very systematic and most appropriate way of formation of NGO India.


STEP-I: Selecting the name of the Company.
STEP-II: Three sets of printed Memorandum and Articles of Association of the proposed Company duly singed by the promoters is submitted along with a declaration by a CA, Advocate that the same are in accordance with the provisions of Act and all the requirements of law have been complied with in this regard.
STEP-III: Three sets of the details of the promoters giving their names, addresses and occupations with all details of the proposed Directors if they are already Director in any other company.
STEP-IV: A statement showing the details of the assets and liabilities of the association, as on the date of the application or within seven days of that date.
STEP-V: An estimate of the future annual income of the proposed Company, specifying the source of its income and the objects of the expenditure.
STEP-VI: A statement giving the brief description of the work already done by the association and of the work proposed to be done by it after the registration in pursuance of Section 25.
STEP-VII: A statement specifying the grounds on which the application is being made in brief.
STEP-VIII:A declaration by each of the persons making the application that he/she is of sound mind, not an undischarged insolvent, not convicted by a court for any offence and does not stand disqualified under section 203 of the Companies Act 1956, for appointment as a director.
STEP-IX: The applicant is required to furnish to the Registrar of Companies (of the state in which the registered office of the proposed company is to be, or is situate) a copy of the application and each of the other documents that had been filed before the Regional Director of the company law board.
STEP-X: Publication of a notice in a Newspaper, within a week from the date of making the application to the regional director of the company law board, in the prescribed manner at least once in a newspaper in a principal language of the district in which the registered office of the proposed company is to be situated or is situated and circulating in that district, and at least once in an English newspaper circulating in that district.
STEP-XI:The regional director may, after considering the objections, if any, received within 30 days from the date of publication of the notice in the newspapers, and after consulting any authority, department or ministry, as he may, in his discretion, decide, determine whether the licence should or should not be granted.
STEP-XII: The Registrar may issue the certificate of incorporation of the Company which makes the legal existence of the Company and all the formalities relating to the issuance of PAN, Bank Account etc are taken thereafter

As a Cooperative Society: A Cooperative Society registered under the respective cooperative laws of the State concerned is also a process of formation of NGO India and can be specifically used as a NGO to deliver the goods and services to the society through its large base of members. The process of registration and operation of the Cooperative Society as NGO is different from State to State as there are different types of Acts regulating the same in different States of India hence no common information in this regard can be compiled.

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