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Overview

NGOs can be defined as organizations formed for non-profitable purposes such as Charity, religious, cultural, or educational. Their main sources of revenue are donations, government grants, membership fees, etc. In this article, we will explain how to register as NGO in the form of Section 8 Company, under the Companies Act, 2013.
 
What is an NGO? NGOs can be defined as organizations formed for non-profitable purposes such as Charity, religious, cultural, or educational. Their main sources of revenue are donations, government grants, membership fees, etc. They cannot distribute their profits among each other’s and are required to spend their proceeds for non-profit activities.
 
NGO Registration is useful to be eligible for donations and grants from various government agencies and enjoy the tax benefits and exemptions.
 
There are three types of NGOs:
1. Trust under Indian Trusts Act, 1882
2. Society under Societies Registration Act 1860
3. Section 8 Company under Companies Act, 2013

Minimum Requirement For Sec 8 Company Registration

1. Minimum 2 Shareholders (for Private Limited NGO) and 7 Shareholders (for Public Limited NGO)
2. DIN (Director Identification Number) for all the Directors
3. Minimum 2 Directors (for Private Limited Co.) and 3 Directors (for Public Limited Co.)
4. DSC (Digital Signature Certificate) for all of the Directors
5. The directors and shareholders can be same person
6. Address proof for proposed office address

Pre-requisites for Registration

1. Digital Signature Certificate (DSC):
 
Digital signatures of the proposed directors of the company are required as the forms for 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 a Class 3 category DSC.
 
2. 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 or along with the SPICe+ form for registration. 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. A practicing professional who can be a chartered accountant, a company secretary, or a cost accountant must attest the form.

Forms Required for Registration

 Name of the Form
 Purpose of the Form
 SPICE+ 
 Application for Incorporation of Company
 INC 12
 Application for License
 INC 13
 Memorandum of Association
 INC 14
 Declaration from a practicing Chartered Accountant
 INC 15
 Declaration from each person making the application
 INC 16
 License to incorporate as Section 8 company
 INC 22
 Situation of Registered Office
 DIR 2
 Consent of Directors
 DIR 3
 Application to ROC to get DIN
 DIR 12
 Appointment of Directors

Procedure for incorporation of Section 8 company

1. In the first step, we obtain the DSC for the proposed Directors of the Section 8 Company. 
2. After obtaining the DSC, file form DIR 3 with the ROC for getting a Director Identification Numbers.
3. After the DIR 3 is approved, the ROC will allot the Director Identification Number to the proposed Director.
4. To apply for a company name, it is necessary to file Form INC 1 with ROC.
5. After the approval to apply for a license for the Section 8 Company, it is necessary to File Form INC 12
6. After the approval, a license under section 8 will be issued in Form INC 16.
7. File SPICe Form 32 with the ROC for incorporation along with the affidavits, declarations, KYC, consent letter, draft MOA, and AOA after he obtains the license
 
If the ROC is satisfied with the submitted forms, the ROC is issued a Certificate of incorporation.

Benefits of Section 8 Company Registration

1. Separate Legal Entity.
2. Tax deductions to the donors of the Company u/s 80G of the Income Tax Act.
3. Exemption from requirement of Minimum Paid up Capital. 
4. Exempt from the requirement of paying stamp duty on the MoA and AoA of the private or public limited company.
5. No need to suffix “Public Limited or Private Limited”, next to it’s legal name.
6. More reliable than all other forms of charitable organizations. 
7. Many tax benefits available.

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