Indian Non-governmental organizations (NGOs) can be set up under various Indian laws, and the different legal entities under which civil society organizations can register themselves

Registered societies

Societies Registration Act, 1860 is a central act for registering not-for-profit organizations. Almost all the states in India have adopted (with modifications, if any) the central Act for creating state level authorities for registering various types of not-for-profit entities. According to the act any seven persons who subscribe to the Memorandum of Association (MOA) can register a society. The memorandum should include names of the society, its objectives, its names, addresses and occupations of the members subscribing to it as well as the first governing body to be constituted on registration. NGO like Bal Vikas Dhara-New Delhi is registered under this act.

Public trust

Public trusts can be created for public charitable purposes. There is no All India Level Act for setting up public charitable trusts. Some of the states in India has enacted the Public Charitable Trust Act, while most states in India does not have a trust act. An NGO can be created only under a public trust act. Madhya Pradesh and Rajasthan have independent state level public trust acts. States like West BengalJharkhand  and Bihar, do not have any act to register a public trust.

A trust can be registered in one state, but the same has the scope to operate in any number of states. In the state of Maharashtra and Gujarat, all organizations that are registered as ‘Society’ are by default also registered as Public Trust.

Private trust

A private trust, created under and governed by the Indian Trusts Act of 1882, aims at managing assigned trust properties for private or religious purpose. A private trust does not enjoy the privileges and tax benefits that are available for public trusts or NGOs.

Non profit companies (Section 8, Companies Act 2013)

Conferring of corporate personality to associations that promote cultural and charitable objectives, but exempting them from the operation of some cumbersome requirements (which are essentially for regulation of business bodies but are difficult for compliance by non-profit companies), are the noteworthy features that are provided under the companies act, 2013.

According to section 25(1) (Companies Act, 1956): “Where it is proved to the satisfaction of the Central Government that an association is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful objectives, intends to apply its profits, if any, or other income in promoting its objectives, and to prohibit the payment of any dividend to its members, the Central Government may, by license, l direct that the association may be registered as a company with limited liability, without addition to its name of the word “Limited” or the words “Private Limited”

Comparison between a trust, a society and a section 25 company

  Public Trust Society Section 25 Company
Statute/Legislation Public Trust Act likeBombay Public Trust Act, 1950 Societies Registration Act of 1860 Companies Act of 1956
Jurisdiction of the Act Concerned state where registered Concerned state where registered Concerned state where registered
Authority Charity Commissioner/Deputy Registrar Registrar of Societies Registrar of Companies
Registration As Trust As Society (and by default also as Trust in Maharashtra and Gujarat) As Section 25 Company
Main Document Trust deed Memorandum of Association and Rules & Regulations Memorandum and Articles of Association.
Stamp Duty Trust deed to be executed a non-judicial stamp paper of prescribed value No stamp paper required for Memorandum of Association and Rules & Regulations No stamp paper required for Memorandum and Articles of Association
Number of persons needed to register Minimum two trustees; no upper limit Minimum seven, no upper limit Minimum three, no upper limit
Board of Management Trustees Governing body or council/managing or executive committee Board of Directors/Managing Committee
Mode of succession on board of management Usually by appointment Usually election by members of the general body Usually election by members of the general body

 Co-operative societies

In India, cooperative societies are regarded as instruments to mobilize and aggregate community effort to eliminate layers of middlemen in any product or service supply chain hence resulting in greater benefit sharing for the grassroot farmer, worker or artisans. The Cooperative Credit Societies Act, 1904 enabled formation of cooperatives for supplying to farmers cheap credit and protect them from exploitation in the hands of the moneylenders. The cooperative act 1912 expanded the sphere of cooperation and provided for supervision by central organization.

Multi-state co-operative societies

The Multi-state Co-operative Societies Act, 2002 which substitutes the earlier statute of 1984, facilitates the incorporation of cooperative societies whose objects and functions spread over to several states. The act provides for formation of both primary (with both individual and institutional members) and federal cooperatives (with only institutional memberships). Any application for the registration of a multi-state cooperative society, of which all the members are individuals, should be signed by at least fifty persons from each of the states concerned. In case of a society of which members are cooperative societies, it should be signed by duly authorized representative of at least five such societies registered in different states

Trade unions

Trade union means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions.



1 thought on “INDIA NGO”

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