Frequently Asked Questions

Question 1

What is an NGO and what is its legal status in India?

Accepted Answer

An NGO (Non-Governmental Organization) is a non-profit entity established for social, charitable, educational, religious, or public welfare purposes. In India, there is no single 'NGO registration' law. Instead, NGOs are registered under one of three legal structures: 1. Trust (under the Indian Trusts Act, 1882 or state-specific trust acts), 2. Society (under the Societies Registration Act, 1860), or 3. Section 8 Company (under the Companies Act, 2013). Each structure has its own registration process, governing laws, compliance requirements, and governance framework. The choice of structure depends on the NGO's objectives, scale, and operational preferences.

Question 2

What is the difference between a Trust, Society, and Section 8 Company?

Accepted Answer

Trust: Simplest to register and operate. Managed by trustees (minimum 2). Governed by the Trust Deed. Low compliance burden. Ideal for small to medium charitable organizations. Cannot be easily dissolved. Society: Membership-based democratic organization. Minimum 7 members required. Governed by MOA and Rules. Annual elections for office bearers. Moderate compliance. Suitable for clubs, associations, and membership organizations. Section 8 Company: Highest credibility. Registered with MCA like a company. Governed by MOA, AOA, and Companies Act. Requires directors with DIN. Highest compliance (ROC filings, board meetings, audits). Best for scaling up, receiving CSR funds, and operating nationally. Cannot distribute profits to members.

Question 3

How many members are needed to register an NGO?

Accepted Answer

Minimum member requirements depend on the structure: Trust: Minimum 2 trustees (one settlor who creates the trust and at least one trustee; same person can be both). Some state trust acts may require more. Society: Minimum 7 members in most states (some states like Karnataka require 7 members for state-level societies). Members must be from the same state. Section 8 Company: Minimum 2 directors and 2 shareholders (similar to a private limited company). At least one director must have a DIN and DSC.

Question 4

How much does it cost to register an NGO in India?

Accepted Answer

Registration costs vary by structure: Trust: Stamp duty on the Trust Deed (varies by state, typically 2% to 7% of the trust property value, with a minimum of 500 to 5,000 rupees) plus Sub-Registrar fee (1,000 to 3,000 rupees). Professional fees: 3,000 to 10,000 rupees. Society: Government fee of 500 to 5,000 rupees (varies by state) plus professional fees of 5,000 to 15,000 rupees. Section 8 Company: MCA filing fees (2,000 to 5,000 rupees), DSC and DIN costs (1,500 to 3,000 rupees per director), plus professional fees of 10,000 to 25,000 rupees. Overall, Trust is cheapest, Society is moderate, and Section 8 is the most expensive.

Question 5

Which NGO structure is best for receiving government grants and CSR funds?

Accepted Answer

A Section 8 Company is considered the most credible structure for receiving government grants and CSR funds. It is registered with MCA, has a structured governance framework (board of directors, annual general meetings, audited financial statements), and follows the Companies Act compliance requirements. Many corporates and government agencies prefer to channel CSR funds through Section 8 Companies because of their transparency and accountability. However, Trusts and Societies with 12A and 80G registration and a track record of good governance can also receive grants and CSR funds.

Question 6

How do I register a Trust in India?

Accepted Answer

The registration process for a Trust: 1. Draft the Trust Deed with a lawyer specifying the trust name, objects, trustees, powers, and management rules. 2. Print the Trust Deed on non-judicial stamp paper of the prescribed value (varies by state, typically 100 to 500 rupees minimum). 3. All trustees and the settlor sign the Trust Deed in the presence of two witnesses. 4. Visit the Sub-Registrar Office having jurisdiction over the trust's registered address. 5. Present the signed Trust Deed, identity proofs of settlor, trustees, and witnesses, and passport-size photographs. 6. Pay the registration fee. 7. The Sub-Registrar registers the deed and provides a registration number. Timeline: 7 to 15 days.

Question 7

How do I register a Society in India?

Accepted Answer

The registration process for a Society: 1. Draft the Memorandum of Association (MOA) stating the society's name, objectives, registered office address, and names of all subscribing members (minimum 7). 2. Draft the Rules and Regulations covering governance, membership, elections, meetings, and dissolution. 3. All subscribing members sign the MOA. 4. Submit the application to the Registrar of Societies in your state along with the MOA, Rules, member details, address proof, and the prescribed fee. 5. The Registrar verifies documents and may seek clarification. 6. Upon satisfaction, the Certificate of Registration is issued. Timeline: 15 to 45 days depending on the state.

Question 8

How do I register a Section 8 Company?

Accepted Answer

The registration process for a Section 8 Company: 1. Obtain DSC and DIN for proposed directors. 2. Apply for name reservation through RUN (Reserve Unique Name) or Part A of SPICe+ on the MCA portal. 3. File Form INC-12 (Application for License to Section 8 Company) with the Regional Director, along with MOA, AOA, financial projections for 3 years, and declarations from directors. 4. The Regional Director issues the Section 8 License (typically within 15 to 30 days). 5. File SPICe+ (Form INC-32) for incorporation with MCA, attaching the Section 8 License. 6. MCA issues the Certificate of Incorporation. Timeline: 25 to 45 days.

Question 9

What should a Trust Deed contain?

Accepted Answer

A comprehensive Trust Deed should include: 1. Name of the Trust, 2. Registered office address, 3. Full details of the Settlor (the person creating the trust) including name, address, and ID details, 4. Full details of all Trustees (minimum 2), 5. Objects and purposes of the trust (charitable, educational, religious, etc.) listed in detail, 6. Trust property (initial corpus, which can be as little as 1,000 rupees in cash), 7. Powers and duties of trustees (investment, management, banking powers), 8. Rules for adding or removing trustees, 9. Meeting procedures and decision-making rules, 10. Amendment provisions, 11. Irrevocability clause (public charitable trusts cannot be revoked), 12. Dissolution provisions.

Question 10

What objectives should be mentioned in the NGO's MOA or Trust Deed?

Accepted Answer

Objectives should be clearly defined, specific, and charitable in nature. Common categories include: 1. Education: Promoting literacy, running schools, scholarship programs, vocational training. 2. Healthcare: Running hospitals, health camps, mental health awareness, disease prevention. 3. Poverty alleviation: Skills development, livelihood programs, microfinance. 4. Women empowerment: Self-help groups, anti-trafficking, gender equality programs. 5. Child welfare: Orphanage, child education, child labour prevention. 6. Environmental protection: Tree plantation, waste management, clean energy promotion. 7. Rural development: Agriculture support, water supply, sanitation. 8. Animal welfare: Rescue, rehabilitation, veterinary care. Include at least 5 to 10 specific objectives. Avoid vague or overly broad statements.

Question 11

What is NGO Darpan and why is it important?

Accepted Answer

NGO Darpan is a platform maintained by NITI Aayog (National Institution for Transforming India) where NGOs can register to obtain a Unique ID. It is available at ngodarpan.gov.in. The registration is important because: 1. It is mandatory for receiving government grants from central and state government ministries. 2. It provides credibility and visibility to the NGO. 3. It is often required for CSR partnerships with corporates. 4. It helps the government track and monitor NGO activities. 5. Many donor agencies and international organizations check NGO Darpan registration before funding. Registration on NGO Darpan is free of charge and can be done online.

Question 12

How do I register my NGO on NGO Darpan?

Accepted Answer

Follow these steps: 1. Visit ngodarpan.gov.in and click on 'Sign Up'. 2. Create an account with the NGO's PAN number, name, email, and mobile number. 3. Login and fill in the NGO's details: registered name, address, state, district, registration type (Trust/Society/Section 8), registration number, date of registration, and PAN. 4. Provide details of key functionaries (president, secretary, treasurer, etc.). 5. Enter the NGO's areas of key issues and geographical reach. 6. Upload supporting documents (registration certificate, PAN card, bank account details). 7. Submit the application. 8. After verification by NITI Aayog, a Unique ID is issued within 15 to 30 days. This ID is required for government grant applications.

Question 13

What is 12A and 80G registration for NGOs?

Accepted Answer

12A registration provides income tax exemption to the NGO: the NGO's income from donations, grants, and charitable activities is exempt from income tax. Without 12A, the NGO must pay income tax on its surplus like any other entity. 80G registration provides tax deduction to donors: when someone donates to an 80G-registered NGO, the donor can claim a deduction of 50% to 100% of the donation amount from their taxable income. Both registrations are obtained from the Income Tax Department by filing Form 10A. They are crucial for attracting donations and grants. See our detailed guide on how to get 12A and 80G registration.

Question 14

Can an NGO receive foreign donations or funding?

Accepted Answer

Yes, but an NGO must have FCRA registration (Foreign Contribution Regulation Act) from the Ministry of Home Affairs to receive foreign donations. FCRA registration is available to NGOs that have been actively functioning for at least 3 years with audited accounts. The NGO must maintain a dedicated FCRA bank account at an authorized bank (currently SBI, Main Branch, New Delhi) for receiving foreign contributions. All foreign funds must be reported to the MHA quarterly. Without FCRA registration, receiving foreign donations is illegal and attracts severe penalties including cancellation of the NGO's registration.

Question 15

Can a Government employee be a trustee or member of an NGO?

Accepted Answer

Government employees can be members or trustees of NGOs under certain conditions. They must obtain prior permission from their department under the relevant service conduct rules. The NGO's activities should not conflict with their official duties or create a conflict of interest. Many government employees are members of educational trusts, cultural societies, and charitable organizations with departmental approval. However, they typically cannot hold paid positions in the NGO or be involved in NGOs that receive government contracts related to their department.

Question 16

What is the difference between a public charitable trust and a private trust?

Accepted Answer

A public charitable trust is created for the benefit of the general public or a section of the public. It is irrevocable, cannot distribute profits to trustees, and its income must be applied for charitable purposes. Public trusts are eligible for 12A and 80G registration. A private trust is created for the benefit of specific individuals (family members, named beneficiaries). It is revocable, can distribute income to beneficiaries, and is not eligible for tax exemptions. For NGO purposes, you always register a public charitable trust. The Trust Deed must clearly state that the trust is irrevocable and no profits will be distributed to trustees.

Question 17

What compliance is required after registering a Trust?

Accepted Answer

Annual compliance for a registered Trust includes: 1. Filing income tax return (Form ITR-7) even if income is exempt under 12A. 2. Getting annual accounts audited if total income exceeds 2.5 lakh rupees. 3. Maintaining proper books of accounts (receipts, payments, assets, liabilities). 4. Filing Form 10B or 10BB (audit report) with the Income Tax Department. 5. Applying at least 85% of income towards charitable purposes (or accumulating with proper Form 10). 6. Conducting regular trustee meetings and maintaining minutes. 7. Renewing 12A and 80G registration before expiry (every 5 years). 8. GST registration if the NGO provides taxable supplies exceeding the threshold.

Question 18

What compliance is required after registering a Society?

Accepted Answer

Annual compliance for a registered Society includes: 1. Holding the Annual General Meeting (AGM) within the prescribed period. 2. Conducting elections for office bearers as per the rules and regulations. 3. Filing the annual list of office bearers with the Registrar of Societies (typically Form 1 or its state equivalent). 4. Filing annual accounts and audit report with the Registrar. 5. Filing income tax return (Form ITR-7). 6. Maintaining minutes of meetings (governing body and AGM). 7. Maintaining member register with updated membership details. 8. Renewing registration if the state requires periodic renewal. Failure to file annual returns can result in the society being struck off.

Question 19

What compliance is required after registering a Section 8 Company?

Accepted Answer

Section 8 Companies have the highest compliance requirements (similar to private limited companies): 1. Hold minimum 2 board meetings per year. 2. Hold the AGM within 6 months of the financial year end. 3. File annual return (Form AOC-4 and MGT-7) with MCA. 4. Get accounts audited by a Chartered Accountant. 5. File income tax return (Form ITR-7). 6. DIR-3 KYC for all directors annually. 7. Maintain statutory registers (members, directors, charges). 8. File event-based forms for changes (directors, address, etc.). 9. ROC compliance requirements apply. The annual compliance cost is higher but the governance framework is stronger.

Question 20

Can an NGO carry on commercial activities or earn profit?

Accepted Answer

An NGO can undertake commercial activities as long as: 1. The activities are incidental to or in furtherance of the NGO's charitable objectives (e.g., a school charging fees, a hospital collecting patient charges, an NGO selling handicrafts made by beneficiaries). 2. No profits are distributed to trustees, members, or shareholders. All surplus must be plowed back into the NGO's charitable activities. 3. The commercial activity does not become the primary purpose of the NGO (this can jeopardize 12A exemption). If commercial receipts exceed 20% of total receipts, the NGO's tax-exempt status may be questioned by the Income Tax Department.

Question 21

How do I open a bank account for an NGO?

Accepted Answer

The process for opening an NGO bank account: 1. Choose a bank and branch. 2. Submit the following documents: Registration Certificate (Trust Deed / Society Certificate / Certificate of Incorporation), PAN Card of the NGO, board resolution or trustee resolution authorizing the signatories, identity and address proofs of all trustees/members/directors, registered office address proof, and the list of trustees/members/directors. 3. Fill the account opening form with the NGO's details and authorized signatories. 4. Some banks require a minimum initial deposit. 5. The account is opened usually within 3 to 7 working days. For FCRA compliance, a separate bank account at SBI, New Delhi Main Branch is required for foreign donations.

Question 22

What is the role of the Settlor in a Trust?

Accepted Answer

The Settlor (also spelled Settler) is the person who creates the Trust by transferring property (the trust corpus) to the trustees for the benefit of the public. The Settlor: 1. Drafts and executes the Trust Deed. 2. Transfers the initial trust property (which can be as little as 1,000 rupees in cash). 3. Appoints the initial trustees. 4. Signs the Trust Deed at the Sub-Registrar's office. After the trust is registered, the Settlor's role ends unless the Trust Deed grants the Settlor ongoing powers. The Settlor can also be one of the trustees. In a public charitable trust, the Settlor cannot revoke the trust once registered.

Question 23

Can trustees or members receive salary from the NGO?

Accepted Answer

Trustees and board members generally cannot receive salary for their role as trustees or members, as NGOs are expected to be managed voluntarily. However: 1. Trustees or members can receive reasonable remuneration for specific professional services rendered to the NGO (for example, a trustee who is a doctor providing medical services to the NGO's healthcare project). This must be explicitly authorized in the Trust Deed or MOA. 2. The NGO can hire full-time staff (who may or may not be trustees/members) and pay them market-rate salaries. 3. Section 197 of the Companies Act restricts managerial remuneration for Section 8 Companies. Excessive trustee payment can jeopardize the NGO's 12A/80G status.

Question 24

How is an NGO dissolved?

Accepted Answer

Dissolution procedures vary by structure: Trust: Public charitable trusts cannot be easily dissolved. They can be wound up only through a petition to the Charity Commissioner or the court. Remaining assets must be transferred to another trust with similar objectives. Society: The society can be dissolved by a resolution passed by 3/4th of the members at a special general meeting. Remaining assets are distributed to another society with similar objectives. Filed with the Registrar of Societies. Section 8 Company: Follows the winding up process under the Companies Act. Can be wound up voluntarily or by the NCLT. Remaining assets must be transferred to another Section 8 Company. Similar to closing a company.

Question 25

Can an NGO be converted from one structure to another?

Accepted Answer

Yes, but the process is complex: Trust to Section 8 Company: The trust cannot be directly converted. You can register a new Section 8 Company and transfer activities and assets. Society to Section 8 Company: Can be done under Section 366 of the Companies Act, 2013, with approval of 3/4th of members and approval from the Registrar of Companies. Section 8 to Trust/Society: Not practically done as Section 8 has higher credibility. The conversion processes involve legal procedures, regulatory approvals, and asset transfer documentation. It is generally better to choose the right structure from the beginning.

Question 26

What are the common mistakes to avoid when registering an NGO?

Accepted Answer

Common mistakes include: 1. Choosing the wrong structure without considering long-term goals. 2. Drafting vague or overly broad objectives in the Trust Deed or MOA. 3. Not including amendment provisions in the Trust Deed (making future changes very difficult). 4. Using a residential address as the registered office without proper NOC. 5. Not applying for 12A and 80G immediately after registration (delaying tax benefits). 6. Not registering on NGO Darpan (losing out on government grants). 7. Ignoring annual compliance requirements (leading to penalties and loss of registration). 8. Not maintaining proper financial records from day one.

Question 27

How long does it take to register an NGO?

Accepted Answer

Registration timelines by structure: Trust: 7 to 15 days (fastest). Once the Trust Deed is drafted and signed, registration at the Sub-Registrar Office is a same-day process (certificate availability takes a few days). Society: 15 to 45 days. Depends on the state's Registrar of Societies. Some states are faster (15 to 20 days) while others take longer. Section 8 Company: 25 to 45 days. This involves MCA name approval (2 to 3 days), Section 8 License from Regional Director (15 to 30 days), and SPICe+ incorporation (5 to 7 days after license). After registration, applying for 12A and 80G takes an additional 15 to 30 days.

Question 28

Do NGOs need to pay GST?

Accepted Answer

NGOs are not automatically exempt from GST. If an NGO provides taxable supplies (goods or services) and its aggregate turnover exceeds the GST threshold (20 lakh rupees for services, 40 lakh for goods), it must obtain GST registration and charge GST. However, certain activities are exempt from GST: services by an entity registered under Section 12AA/12AB of the Income Tax Act by way of charitable activities, health care services by a charitable institution, and educational services by such institutions. Pure donations and grants received by the NGO are not considered supply and are not subject to GST.

Question 29

Can a foreigner or NRI start an NGO in India?

Accepted Answer

Yes, foreigners and NRIs can be members, trustees, or directors of Indian NGOs with certain conditions: 1. For a Trust, the foreign national can be a trustee but at least one trustee should ideally be an Indian resident. 2. For a Society, foreign nationals can be members but the majority of members should typically be Indian citizens (varies by state). 3. For a Section 8 Company, foreign nationals can be directors (at least one director must be an Indian resident). 4. The NGO itself must be registered in India. 5. FCRA rules will apply strictly if the NGO receives any foreign contribution.

Question 30

What is the tax treatment of donations received by an NGO?

Accepted Answer

Tax treatment depends on registration: With 12A registration: Donations, grants, and income from charitable activities are exempt from income tax, provided at least 85% of the income is applied towards charitable purposes during the year (or accumulated with proper Form 10). Without 12A: The NGO's income is taxed at the normal slab rates applicable to the entity type (30% for companies, slab rates for trusts/individuals). Corpus donations (donations specifically given for the endowment/corpus fund as per the Trust Deed) are exempt even without 12A registration. Anonymous donations exceeding 1 lakh rupees (or 5% of total donations) are taxed at 30%.

Question 31

What is the CSR applicability for NGOs?

Accepted Answer

Under the Companies (CSR) Policy Rules, companies meeting certain financial thresholds must spend at least 2% of their average net profits on CSR activities. NGOs registered as Trusts, Societies, or Section 8 Companies with 12A registration and at least 3 years of track record in the relevant area can be implementing agencies for CSR projects. The implementing agency must be registered on the MCA CSR-1 Form to receive CSR funds. Section 8 Companies are generally preferred by corporates for CSR implementation due to their corporate governance structure and transparency.

Question 32

Can an NGO own property?

Accepted Answer

Yes, NGOs can own property (land, buildings, vehicles, equipment) in the NGO's name. For a Trust, property is held by the trustees on behalf of the trust (registered in the trust name or in the trustees' names as trustees of the trust). For a Society, property is held in the society's name by the managing committee. For a Section 8 Company, property is held in the company's name (like any other company). When purchasing property, ensure the Trust Deed or MOA/AOA authorizes the NGO to acquire property. All property must be used for the NGO's charitable purposes. Property purchased from donated or grant funds must be properly accounted for.

Question 33

What records and registers must an NGO maintain?

Accepted Answer

Essential records include: 1. Original registration document (Trust Deed / Society Certificate / COI). 2. Books of accounts (receipts and payments, income and expenditure, balance sheet). 3. Donation register with donor details, amounts, receipts issued, and purpose. 4. Minutes book for trustee meetings, board meetings, and AGM (for societies). 5. Member/Trustee register with current and past members. 6. Asset register listing all NGO property and assets. 7. Project records documenting activities, beneficiaries, and outcomes. 8. Employee records with appointment letters, salary details, and attendance. 9. Bank statements and investment records. 10. Tax filings and audit reports.

Question 34

Which is better for a small charitable project: Trust or Society?

Accepted Answer

For a small charitable project with a focused group of people (family, friends, community leaders), a Trust is usually the better choice because: 1. Only 2 members needed (vs. 7 for a society). 2. Fastest registration (7 to 15 days). 3. Lowest cost. 4. Simplest governance (no elections, no AGM requirement). 5. Most flexible management (trustees make decisions). 6. Lowest compliance burden. A Society is better when you need a democratic, membership-based organization with broader participation. A Section 8 Company is best when you need national-level operations, CSR funding, and maximum credibility.

Parameter	Trust	Society	Section 8 Company
Governing Law	Indian Trusts Act, 1882 (or state-specific acts)	Societies Registration Act, 1860	Companies Act, 2013
Registering Authority	Sub-Registrar (under Registration Act)	Registrar of Societies (state)	Registrar of Companies (MCA)
Minimum Members	2 (Settlor + 1 Trustee)	7 members	2 Directors + 2 Shareholders
Governing Document	Trust Deed	MOA + Rules and Regulations	MOA + AOA
Registration Time	7 to 15 days	15 to 45 days	25 to 45 days
Registration Cost	Lowest (1,000 to 10,000 rupees)	Moderate (5,000 to 15,000 rupees)	Highest (15,000 to 30,000 rupees)
Governance Style	Trustees manage (no elections)	Democratic (elections for office bearers)	Corporate (board of directors, AGM)
Compliance Burden	Low	Moderate	High (similar to Pvt Ltd Company)
Credibility for Grants	Good	Good	Highest
Geographic Scope	State-level (primarily)	State-level (national scope requires state-by-state registration)	Pan-India (single registration)
Dissolution	Very difficult (requires court/charity commissioner approval)	By 3/4th majority of members	By NCLT (winding up process)

Compliance	Trust	Society	Section 8 Company
Income Tax Return (ITR-7)	Yes	Yes	Yes
Audit (if income exceeds 2.5 lakh)	Yes	Yes	Mandatory (all Section 8)
Annual Filing with Registrar	Not required (in most states)	Yes (annual list of office bearers)	Yes (AOC-4, MGT-7 with MCA)
AGM	Not mandatory	Mandatory	Mandatory
Board/Trustee Meetings	As per Trust Deed	As per Rules	Minimum 2 per year
DIR-3 KYC	Not applicable	Not applicable	Yes (all directors)
12A/80G Renewal	Every 5 years	Every 5 years	Every 5 years

Follow Our Expert Roadmaps

How to Register an NGO in India (Trust, Society or Section 8)

Documents Required

Tools & Prerequisites

Understanding the Three NGO Structures

Comparison of Trust, Society, and Section 8 Company

How to Register a Trust

Step 1: Draft the Trust Deed

Step 2: Print on Stamp Paper and Sign

Step 3: Register at the Sub-Registrar Office

How to Register a Society

Step 1: Draft the MOA and Rules and Regulations

Step 2: Prepare Documents

Step 3: Submit to the Registrar of Societies

Step 4: Receive the Certificate of Registration

How to Register a Section 8 Company

Step 1: Obtain DSC and DIN for Proposed Directors

Step 2: Apply for Name Reservation

Step 3: Apply for Section 8 License (Form INC-12)

Step 4: File SPICe+ for Incorporation

Post-Registration Steps for All NGOs

Apply for PAN and TAN

Open a Bank Account

Register on NGO Darpan (NITI Aayog)

Apply for 12A and 80G Registration

Obtain Other Registrations as Needed

Annual Compliance Comparison

Conclusion