Types of Non Profit Organizations in India

The law which governs Societies in India is the Society Registration Act of 1960. 7 or more people are required to form an NGO as a Society. The purpose they come together for should be a common purpose and can be a scientific purpose, a charitable purpose or a literary purpose.

Certain non profit types of companies can also be established in India, they are:

Section 8 Company

A Section 8 Company is the most popular forms of Non-Profit Organizations in India, recognized under the Companies Act, 2013. These types of companies can be established for the promotion of commerce, arts, science, sports, education, research, social welfare, religion, charity, and protection of environment or any such other object.

As per the act, the profit of such companies can be used only to promote the objectives of the company and nothing in the form of dividends is payable to any of its members. The registration processes of such companies are similar to other business structures discussed here, however a special certificate shall be obtained for its formation.

NGOs

Non-Government Organization or NGOs, comes under Section 8 of the Companies Act. Registrations for NGOs are mandatory in India and are allowed to receive foreign funds. However, the funds received under NGOs are monitored and referred further to a recommendation from the National Intelligence Agency to The Prime Minister of India.

Registrations of Societies, Trusts etc are also allowed in India, subject to the terms and conditions of the respective acts and rules applicable to such formation.


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