NGO REGISTRATION

NGO - Brief Note on different types of NGO and the procedure to form it.:

NGO is a common word to refer Trust , Society , Section 25 Company , as these are governed by various acts such as Trust Act , Societies Act, Section 25 Company. The procedure for the formation of Trust and Society varies in each state as each state has diffierent procedural requirements . In case of section 25 company , it is same all over india as it is governed by indian companies Act.

The procedures mentioned below for the formation of the above mentioned NGO's are as prevalent in Delhi .
There are Three Formats in NGO Registraion

1. Trust
2. Society
   a) State Level Society
   b) National Level Society
3. Section 25 Company

Main Difference between These NGO Format:

Trust:
1. Trust is registered under Trust Act .
2. It is less democratic . Normally Settler ( the person who start the Trust or initial investment made is called Settler ) keeps all powers with him.
3.Minimum 2 members required to form a Trust.
4.Even family members can be Trustees.

Society:
1. Society is registered under Society act .
2.It is more democratic . As per the bylaw ,there will be election every year or every three year or so.So there is a possibility that the person who initiated the society may be out of power in the next election if majority of members oppose him.
3. In case of State level society minimum 7 members required and in case of National level Society, 8 members from 8 diffierent state required.
4. No relatives can be members in a society

Section 25 Company:

1. Section 25 company is registered under Companies Act .
2. Decision making rest on Board of Directors . Similarly there will be an AGM every year and normal members get an opportunity to air their opinion . Any way here also promoters has more control over it.
3. Minimum two members needed .
4. Main advantage of this format compared to Trust and Society is there is clear  ownership details are available . i.e., what percentage of shares with whom can be available. This is very important when there is huge capital investment , promoter do not have the capacity to invest and wants to associate some outsider as investor . In such situation , investor wants to know what is his share of ownership in the company . Every one know it is a charitable venture and there is no personal gain involved . But Everyone needs a part of power involved in each venture .


Compiled by

CMA Krishna Dasan.A
Mob: 98711-28831
Email: aknair2002@cmaglobal.net.in
Website: www.cmaglobal.net.in