1. TYPES OF NGO’s Mrs.Annamma Samuel Head-Research

2. INTRODUCTION Constitution of India, Article 19(1)(c) The right of all citizens to form associations or unions

3. AN ASSOCIATION OF PERSONS WITH NON-PROFIT MOTIVE MAY BE REGISTERED As a Charitable Trust As a Society registered under the Societies Registration Act As a Company under section 25 of the Companies Act

4. NON-PROFIT ORGANIZATIONS IN INDIA Exist independently of the state Self-governed by a board of trustees or ‘managing committee’/ governing council Produce benefits for others, generally outside the membership of the organisation. Are ‘non-profit-making’, Prohibited from distributing a monetary residual to their own members.

5. TRUST Public charitable trusts No central law governing public charitable trusts Indian Trusts Act 1882 Whether a trust is public or private? The class to be benefited constitutes a substantial segment of the public.

6. PROCEDURES &PURPOSESOF FORMATION Can be created in Any Language No technical words necessary Relief of Poverty or Distress Education Medical Relief Advancement of any other object of general public utility Excluding purposes which relate exclusively to religious teaching or worship.

7. A trust deed, generally, incorporates the following: The name(s) of the author(s)/settlor(s) of the trust; The name(s) of the trustee(s); The name(s) if any, of the beneficiary/ies or whether it shall be the public at large; The name by which the trust shall be known; The name where its principal and/or other offices shall be situated The property that shall devolve upon the trustee(s) under the trust for the benefit of the beneficiary/ies; An intention to divest the trust property upon the trustee(s); The objects of the trust; The procedure for appointment, removal or replacement of a trustee. Their rights, duties and powers etc; The rights and duties of the beneficiary/ies; The mode and method of determination of the trust.

8. Responsibility of the Trustees Legal title of the property of a public charitable trust vests with the trustees. Cannot use trust property or their position for their own interest or private advantage Trustees may not delegate authority with respect to duties requiring the exercise of discretion.

9. Public charitable trusts are highly regulated. In many states, purchases or sales of property by a trust must be approved in advance by the Charity Commissioner

10. SOCIETY Defined as a company or an association of persons united together by mutual consent to deliberate, determine and act jointly for same common purpose. Minimum seven persons, eligible to enter into a contract, can form society.

11. SOCIETY When an NGO is constituted as a society, it is required to be registered under the Societies Registration Act, 1860.

12. Societies are usually managed by a governing council or managing committee, whereas trusts are governed by their trustees. Individuals or institutions or both may be members of a society. Unlike trusts, societies may be dissolved. Dissolution must be approved by at least three-fifths of the society's members.

13. Section 20 :Societies Registration Act, 1860 Types of societies that may be registered under the Act include, but are not limited to, the following: - Charitable societies - Societies established for the promotion of science, literature, or the fine arts, - For education; and - Public art museums and galleries, and certain other types of museums.

14. Procedures of Formation: Memorandum of Association, and Rules and Regulations

15. SECTION 25 COMPANIES The Indian Companies Act, 1956 , which principally governs for-profit entities, permits certain companies to obtain not-for-profit status as "section 25 companies."

16. For the purposes of promoting commerce, art, science, religion, charity or any other useful object With intention to apply its profits or other income for promoting its objects.

17. A section 25 company must apply its profits, if any, or other income to the promotion of its objects, and may not pay a dividend to its members. At least three individuals are required to form a section 25 company. A section 25 company may be dissolved.

18. Procedures of Formation The application must include copies of the memorandum and articles of association of the proposed company, as well as a number of other documents, including a statement of assets and a brief description of the work proposed to be done upon registration. If the registrar is satisfied that all formalities have been complied with, he will issue a CERTIFICATE OF INCORPORATION from which date the company comes into existence.

19. Upon dissolution the funds and property of the company may not be distributed among the members of the company. Rather, the remaining funds and property must be given or transferred to some other section 25 company, preferably one having similar objects as the dissolved entity.

20. TAX EXEMPTION FOR NOTIFIED CHARITABLE SOCIETIES The Income Tax Act, 1961U/s 10 (23C) (iv) and (v) following conditions are met: The organization must be organized for religious or charitable purposes; The organization must spend 85% of its income in any financial year (April 1st to March31st)

21. No part of the income or property of the organization may be used or applied directly or indirectly for the benefit of the founder, trustee, relative of the founder or trustee or a person who has contributed in excess of Rs. 50,000 to the organization in a financial year;

22. The organization must timely file its annual income return The income must be applied or accumulated in India. However, trust income may be applied outside India to promote international causes in which India has an interest, without being subject to income tax.

23. TAX DEDUCTION FOR DONORS Sec.80G,Income tax Act-types of deductions Donors are entitled to 100%deduction for donations to some of the Government funds

24. FOREIGN CONTRIBUTIONS Foreign Contribution Regulation Act 1976 NGO’s wishing to accept foreign contributions should Register with Central Government Agree to accept contributions through designated banks. Must report to Central Govt within 30 days of receipt of foreign funds

25. REPORT Source Manner in which it is received Purpose for which it was intended Manner in which it is used Foreign contributions include Currency, security &articles except personal gifts under Rs1000.

26. CUSTOMS DUTY NPO’s involved in relief works, distribution of relief supplies to the needy are 100% exempted from customs duty on the import of food,medicine,clothing and blanket. Exemption for scientific/technical equipment and components intended for Research Institutes.

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