NGO/Section 8 Company
A Non-Governmental Organization (NGO)
A Non-Governmental Organization (NGO) is a non-profit, voluntary organization that operates independently of the government and is typically focused on social, economic, or environmental issues. In India, NGOs are registered under various laws such as the Societies Registration Act, of 1860, the Indian Trusts Act, of 1882 and the Companies Act, of 2013.
NGOs can be registered as a society, trust, or non-profit company. The registration process for each type of organization varies, but typically requires the submission of detailed information about the organization’s objectives, activities, and management structure.
Once registered, NGOs are required to comply with various legal and regulatory requirements, such as filing annual reports, maintaining accurate financial records, and adhering to specific governance and management standards.
NGOs can receive funding from various sources such as the government, foreign funding agencies, corporate social responsibility activities, and donations from individuals. However, they are also subject to oversight and regulations by various government bodies such as the Ministry of Home Affairs and the Foreign Contribution Regulation Act (FCRA) which regulates the foreign funding received by NGOs.
NGOs are also required to comply with various tax laws and regulations, such as the Income Tax Act and the Foreign Contribution Regulation Act.
Overall, NGOs play an important role in the development and welfare of communities and society at large and are governed by various laws and regulations in India, which are aimed at ensuring transparency, accountability, and proper utilization of funds.
Section 8 company is a type of business structure recognized under the Indian Companies Act 2013. It is a non-profit organization that is established for the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any other object.
A Section 8 company is required to have a minimum of two members and two directors. It is a separate legal entity and can enter into contracts, borrow money, and sue or be sued in its own name.
The main difference between a Section 8 company and other types of companies is that a Section 8 company cannot distribute any profits or dividends to its members, and any surplus or profit generated by the company must be used to achieve its objectives and promote its social welfare.
The Indian Companies Act 2013 requires that every Section 8 company must be registered with the Registrar of Companies (ROC) and must have a minimum paid-up capital of Rs. 1 Lakh. The Act also requires that the Section 8 company must have a registered office and must file annual returns with the ROC.
The Act also lays down the rights and duties of the members and governs the internal management of the Section 8 company, such as the appointment and removal of directors, the rules for the dissolution of the Section 8 company.
In terms of liabilities, the members of a Section 8 company are not personally liable for the debts of the company. This means that in case of any debts or liabilities incurred by the company, the personal assets of the members are protected.
Overall, Section 8 company is a form of business organization in India which is specifically designed for non-profit organizations, providing the benefits of limited liability protection to the members while ensuring that the company’s profits are used for promoting its social welfare.