An NGO or Non-Governmental Organization is basically a non-profit or not-for-profit organization which strives to work towards the betterment of the underprivileged sections of Society. NGO’s could have a wide variety of interests of society in mind. This could include Environmental causes, human and/or animal rights, improving the health and welfare of children, development work and could even include raising awareness about some causes or activities of social importance.
With all that being stated, sometimes NGO’s are also established to act as fronts for political as well as religious interests. However, NGOs being non-profit organizations, these entities are not allowed to shell out the profits to the members as dividends. All profits made by the organization have to be invested towards the social cause the NGO is helping.
In India, an individual is free to perform social activities without structuring an entity or organization. However, an individual wants to form a group that involves participants, activities, and resources, it is essential to have proper management in place.
To run the NGOs in the form of (Companies, Trusts, and Societies) in an accurate manner, a certain set of rules need to be followed. To register any of the below-mentioned ways, an applicant needs to follow the various laws. NGO registration can be done in 3 ways:
One of the ways in which an NGO can be registered is Trust or more commonly called Charitable trust. Trust is a legal entity created by the “trustor” or “settlor” who transfers the assets to the second party or “trustee” for the benefit of the third party or “beneficiary”. Trusts are formed to help and support the deprived sections of the society. Any group of individuals can register a trust and in India as such there are no specific laws to govern the public trust, however, some states like Maharashtra and Tamil Nadu have their own Public Trust Act.
A society is an entity that can be created by a group of individuals united in their cause for promoting science, arts, literature, social welfare and useful information. In addition, societies work for creating military orphan funds, maintaining public museum and libraries.
Societies are governed by the Societies Registration Act, 1860. They must be registered with the respective state Registrar of Societies to be eligible for tax exemption.
A Section 8 company is similar to a trust and society. The objectives of a Section 8 Companies are to promote arts, science, commerce, sports, social welfare, religion, charity and environmental protection. They are registered under the Companies Act, 2013 for charitable purpose. They have better credibility among government bodies, donors and other stakeholders.
In India, anybody is free to do social activities without forming an association or organization. But when an individual wants to create a group that involves volunteers, activities, and resources, it becomes important to have proper management in place. To run such companies, trusts and Societies in the correct manner, a certain set of rules need to be followed.
Q. What is the full form of NGO?
Ans. The full form of NGO is Non-Governmental Organization.