Society/Trust/RWA/Section 8- NGO
Concept of NGO in India:
NGO may be described as an organization having a predefined economical, Educational, cultural, Religious or social association. They are not in control of anybody and cannot divide it’s surplus as such. Whatever, Profit they may achieve from economic trades are rehabilitated or invested on apt non-profit actions or activities. The quintessential fount of earnings of NGO are donations, Scholarship, Awards, Membership fee and interest on asset”. In the current scenario, The word NGO signifies to authorized trust, Societies, Cooperative associations, public funds, unlucrative companies, etc. Engaged for the common good, Development and evolution of the public in a way additive to similar operations of the state and therefore, Called as Non-Government Organizations (NGOs).
Trust:
There is no certain act pertaining to this form. However, a trust is originated from a Trust deed which is the advisory element for functioning/operating the trust for the reason it has been established. A Trust is established either for benign and/or religious reasons. Even though there are no certain acts for trust but Charitable Endowment Act, 1890 & Charitable and Religious Act, 1920 is cited while establishing a benign/religious trust. The above mentioned can also be authorized by the Registrar of Public Trusts.
Society:
Society Registration Act, 1860 pertains to this concept. Society is a web of people who come along by mutual agreement to act together for a generic purpose. A Society is built, by steps of a Memorandum of Collaboration, by any seven or above humans correlated due to any literary, scientific, charitable or religious project idea etc. This memorandum of Collaboration has to be presented to the Registrar of Societies along with the list of the decree and precedents of the society.
RWA:
RWAs (Resident Welfare Associations) are particularly recognized by the Societies Registration Act,1860.These function on the basis of constitutional documents such as a Memorandum of Association which conclude their roles and objectives. They are discretional collaborations made by citizens and they don’t have any statutory authority. As societies, Resident Welfare Associations (RWA’s) also make their separate decree and regulations to explain their powers, roles, governance structure, names of dignitaries etc. Because it is a society, RWA is a legal person and has the power sue and be sued as well. In order to take care of society’s bylaws, pointing towards any disputes over administration of the society or alimentation of public areas, etc. is the work scope of an RWA.
Section 8 Company:
Company Act, 2013 gives us information about the formation of Section 8 (Company) with its centric purpose of providing help/assistance to the public with its benign or religious purposes. Any citizen or a group of people who intend to be authorized as a limited organization for benign reasons can affix for registration of Section 8 company.
1. Document appliance for registration with the jurisdictional commissioner of Income Tax.
2. Documents checklist (Rule 17A amended vide Notification No 10-2018 dated 19.02.2018):
Trust: replica of trust deed
Society: A replica of registration certificate and a replica of MOA i.e. (Memorandum of Association) of society
Section 8 company: A replica of certification of incorporation and a replica of MOA, AOA of the conglomerate.
3. Rule 17A(3):
Form No. 10A should be verified by the authority who has the power to verify the return of income under section 140, same is applicable to the assessee.
4. Procedure for registration
Concept
Tax Benefit under Section 12A – to NGO
Any voluntary donation accepted by NGO or income out of a land or building held under Trust is exempted from their Income Tax on a condition that such NGO is registered u/s 12A of Income Tax Act, 1961.
The NGO which gets itself registered u/s 12A of the Act also has to apply to the Director of Exemption, Income Tax in the previously described format (10A) alongwith following documents:-
The Income Tax Department on being completely sure about the charitable nature of the NGO will provide the registration certificate u/s 12A of the Act. The registration so provided has a validity for a indefinite period, until unless it gets called back by the Issuing Authority.
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Trusts are generally registered at the sub-registrar of the area you want to work in. This is the same place where the buying and selling of land/property are registered. Societies are registered at the office of the registrar of societies of your area. You can get further information at the subregistrar/tehsildar office near you.
You can’t take money for just being a trustee in a public charitable trust, however if you’re doing some work for the same you can take a reasonable compensation , which means it would be illegal to take more money than the market rates.
| Particulars | Trust | Society | Non Profit Company |
|---|---|---|---|
| Statute/Legislation | As per Relevant State Trust Act or Bombay Public Trusts Act, 1950 | Under the Societies Registration Act, 1860 | In accordance with the Companies Act, 2013 |
| Jurisdiction | Sub Registrar or Charity commissioner | (Registrar of societies) charity commissioner in Maharashtra | Registrar of Companies of the respective state where the Registered Office of the Company is placed |
| Registration | As a trust | As a Society In Maharashtra, both as a society and a trust | (As a company u/s 8 of the Indian Companies Act.2013)Section 25 of the Companies Act, 1956 |
| Registration Document | As a trust As a Trust deed | MOA i.e. (Memorandum of Association) and Rules and Regulations | In accordance with Memorandum and Articles of Association and Regulations |
| Stamp Duty | Trust deed to be done on non-judicial stamp paper, vary from place to place | No stamp paper essential for MOA i.e (Memorandum of Association) and Rules and Regulations. | No stamp paper essential for M.O.A i.e (Memorandum of Association) and Rules and Regulations. |
| Members Required | Minimum number of trustees required – two . No upper limit. | Minimum – seven managing committee associates. No upper limit. | Minimum number is three trustees. No maximum limit. |
| Board of Management | Trustees or/and Board of Trustees | Governing body /managing or executive committee | Board of directors and/or Managing committee |
| Mode of Succession on Board of Management | Consultation or Election by Members of the public Body | Consultation or Election | Election by members of the Public Body of the Shareholders |
