Starting an NGO in India? Read this first

  • In India today, the maximum work in the social sector happens through Non-Governmental Organisations (NGOs). As the name suggests, these organisations do the work which is the responsibility of a Government in a welfare state, such as education, healthcare and support to the underprivileged, destitute or ill, but are not connected to the Government except perhaps by financial support.

    A person keen on contributing to society can start his own NGO as a means of rendering service. The law gives you three options. You can register the NGO as a ‘Public charitable trust’, as a ‘Society’ or even as a ‘Not for profit Company’. No matter how you start the NGO, you can seek exemption from tax, and also allow people who contribute to your NGO to be exempted.

    To register as a Trust, you need to execute a Trust Deed under the Indian Trust Act, 1882. You have to mention there the objective of the trust), how the trust will be managed, how many trustees you intend to have (a minimum of 2 members are required) and how they will be appointed and replaced. Legal formalities have to be complied with while preparing the trust deed.

    A Society is created under the Society Registration Act, 1860. Here too, a document needs to be created to form the society, but unlike a trust, a Society must have a minimum of 7 members in the managing committee of the society.

    A not for profit company can be created under Section 25 of the Companies Act for the purpose of promoting commerce, art, science, religion, charity or any other socially beneficial purpose. A member of this company will not receive any dividend, since such a company is not for profit and all the income of the company has to be used for promoting the objects of the company. The documentation and procedure to be followed is more extensive while creating a Section 25 company, but it brings with it benefits too.

    It is recommended that you consult a lawyer, and get legal advice based on your specific requirements, before starting your NGO.

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