NGOs or non-governmental organizations as the name suggests are not a part of any government but you may find a non-governmental organization working side by side a government organization for the betterment of the society.
Forms of NGOs Generally speaking it is a not for profit organization possessing many different forms such as societies, trusts, and Section 8 companies. Many people do not know the exact difference between the three forms of NGOs and consider them to be the same. There are some differences among the three which have been explained in a tabular form below.
Difference between societies, trust, and Section 8 companies are as follows.
|BASIS OF DISTINCTION||SOCIETIES||TRUSTS||SECTION8 COMPANIES|
|Meaning||A society is a membership organization requiring certain people to act as members.||As the name signifies a trust is an arrangement whereby a trustee takes care of a property for the benefit of a beneficiary. Trusts are created because the beneficiary may not be in a position to guard the property.||Section 8 companies are companies established for the purpose of promotion of art, science, culture etc.|
|Governing provision or act||It is governed by the Societies Registration Act 1860.||As such, there is no specific or uniform trust law for the whole country It may be governed by the Indian Trusts Act 1882. Different states may adopt different provisions regarding governing their trusts.||The Companies Law 2013 provides set of rules and regulations for Section 8 companies.|
|The supreme power of control||Under the control of Registrar of Societies.||Under the control of Deputy Registrar or Charity commissioner of the concerned area.||Under the control of Registrar of Companies.|
|Documents required||Memorandum of associations and document regarding rules and regulations.||Trust deed||Memorandum of associations, Articles of Association is two main documents required.|
|The minimum number of members||Minimum 7 members are required for State Level Societies and 8 members are needed for National Level Societies.||Minimum of 2 members required.||Minimum 7 in case of a public company and 2 in case of a private company.|
|Revocable||Irrevocable||Can be dissolved.|
|Decision making||In the hands of governing councilor managing committee||Managed by trustees or board of trustees.||Managed by the board of directors.|
Purpose of setting up an NGO
All the above forms of NGOs are established for the promotion of charitable or religious purposes. They incorporate activities such as providing food, education, medicines, vaccines and other necessities to the underprivileged and poor sections of society. It also involves the establishment of trusts for promotion sports, art, science, culture etc.
Points to be noted
- NGOs receiving funds from foreign sources need to register themselves under FCRA (Foreign Contributions Regulations Act). So if you want to receive funds from abroad better get prior permission under FCRA.
- Though registration of NGOs is not necessary yet we should register NGOs to enjoy benefits and exemptions under the Income Tax Act 1961.
- You must decide upon the nature and size of your NGO as the applicability of Labour Laws and Service Tax depend upon these factors.
Hope so the above-mentioned differences have clarified much of your doubts about NGOs. Upliftment of society is all that we need to create a better and happy country. Now if want to make a choice among the three forms to NGOs you can very judiciously choose the way in which you want to serve the society.