A non-government organization as the name suggests is an organization formed usually by philanthropists in order to support and work for a specific social or political cause independent of government. According to the world bank, NGOs can be classified as either advocacy NGOs whose foremost concern is to promote a cause or operational NGOs that are primarily associated with developmental projects. However, in India NGOs are classified on the basis of their co-operation, orientation, and structure. The types of structural NGOs include Trust, Society, and non-profit companies.
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Important Roles of NGOs
In India, the structure of the NGOs vary by the organization’s objects and body of an organization such as minimum and the maximum number of members, accounts filling, an area of operation, etc. Structural types of NGOs require a memorandum also known as Bye-law to be created at the time of its establishment.
There are various benefits of forming an NGO which include providing imperative local action, inexpensive to implement, better communication at all levels ranging from local people to the government and experimenting with innovative approaches. In fact, an NGO can play a critical role by providing a mechanism that works where the government fails.
A Non-Government Organisation registered under Section 12A of the Act with the Income Tax Department has to file income return if its total income, without any deductions is over the maximum amount not chargeable by income tax.
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Trusts are formed with the purpose to provide assistance in doing charitable work and thus support everything that comes under mankind no matter it is an educational, medical or labor-related cause. In simple words, trust is a simpler entity which is also easier to register. Interested donors put their trust in and donate the money after going through the objectives mentioned in the trust deed of the trusted entity.
When it comes to a society NGO, societies are governed by Societies Registration Act, 1860. With minimum seven managing committee members the Board of Management is in the form of a governing body or council or a managing or executive committee. A society NGO can be formed by the memorandum of association which is the main instrument of any society. Members are free to decide various designations among themselves.
Section 8 Company is formed with the purpose to promote art, commerce, research, education, science, social welfare, charity, sports, education, research, social welfare, protection of environment and religion. It is obligatory that Section 8 Company must promote only the objects of the company and members not to be paid any dividends. The applicant is required to file form INC-1 for name availability.