Non-governmental organisations in India

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Indian non-governmental organisations (NGOs) can be set up under various Indian laws.

Contents

The different legal entities under which civil society organisations can register themselves are:

Registered societies

Societies Registration Act, 1860 is a Central Act for registering not-for-profit organisations. Almost all the states in India have adopted (with modifications, if any) the Central Act for creating state-level authorities for registering various types of not-for-profit entities. According to the Act, any seven persons who subscribe to the Memorandum of Association (MOA) can register a society. The memorandum should include the name of the society; its objectives; names, addresses and occupations of the members subscribing to it as well as the first governing body to be constituted on registration.

Trust

Public trust

Public trusts can be created for public charitable purposes. There is no All India Level Act for setting up public charitable trusts. Some of the states in India have enacted the Public Charitable Trust Act, while most states in India do not have a trust Act. An NGO can be created only under a public trust Act. Madhya Pradesh and Rajasthan have independent state-level public trust Acts. States like West Bengal, Jharkhand and Bihar do not have any Act to register a public trust.

A trust can be registered in one state, but the same has the scope to operate in any number of states. In the statesof Maharashtra and Gujarat, all organisations that are registered as Society are by default also registered as public trusts under Bombay Public Trust Act, 1950.

Private trust

A private trust, created under and governed by the Indian Trusts Act of 1882, aims at managing assigned trust properties for private or religious purpose. A private trust does not enjoy the privileges and tax benefits that are available for public trusts or NGOs.

Non profit companies

Conferring of corporate personality to associations that promote cultural and charitable objectives, but exempting them from some cumbersome requirements (which are essentially for regulation of business bodies but are difficult for compliance by non-profit companies), are the noteworthy features that are provided under the Companies Act, 2013.

According to section 25(1) (Companies Act, 1956): "Where it is proved to the satisfaction of the Central Government that an association is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful objectives, intends to apply its profits, if any, or other income in promoting its objectives, and to prohibit the payment of any dividend to its members, the Central Government may, by license, l direct that the association may be registered as a company with limited liability, without addition to its name of the word "Limited" or the words "Private Limited".

Comparison between a trust, a society and a non-profit company

Public TrustSocietySection 8 Company [1]
Statute/LegislationIndian Trust Act 1882Societies Registration Act of 1860Companies Act of 2013
Jurisdiction of the ActConcerned state where registeredConcerned state where registeredConcerned state where registered
AuthorityCharity Commissioner/Deputy RegistrarRegistrar of SocietiesRegistrar of Companies
RegistrationAs TrustAs Society (and by default also as Trust in Maharashtra and Gujarat)As Section 8 Company
Main DocumentTrust deedMemorandum of Association and Rules & RegulationsMemorandum and Articles of Association.
Stamp DutyTrust deed to be executed a non-judicial stamp paper of prescribed valueNo stamp paper required for Memorandum of Association and Rules & RegulationsNo stamp paper required for Memorandum and Articles of Association
Number of persons needed to registerMinimum two trustees; no upper limitMinimum seven, no upper limitMinimum two, no upper limit
Board of ManagementTrusteesGoverning body or council/managing or executive committeeboard of directors/Managing Committee
Mode of succession on board of managementUsually by appointmentUsually election by members of the general bodyUsually election by members of the general body

Types based on use

Co-operative societies

In India, cooperative societies are regarded as instruments to mobilise and aggregate community effort to eliminate layers of middlemen in any product or service supply chain hence resulting in greater benefit sharing for the grassroot farmer, worker or artisans. The Cooperative Credit Societies Act, 1904 enabled formation of cooperatives for supplying to farmers cheap credit and protect them from exploitation in the hands of the moneylenders. The cooperative act 1912 expanded the sphere of cooperation and provided for supervision by central organisation.

Multi-state co-operative societies

The Multi-state Co-operative Societies Act, 2002 which substitutes the earlier statute of 1984, facilitates the incorporation of cooperative societies whose objects and functions spread over to several states. [2] The act provides for formation of both primary (with both individual and institutional members) and federal cooperatives (with only institutional memberships). Any application for the registration of a multi-state cooperative society, of which all the members are individuals, should be signed by at least fifty persons from each of the states concerned. In case of a society of which members are cooperative societies, it should be signed by duly authorised representative of at least five such societies registered in different states.

Trade unions

Trade union means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions.

Religious bodies

Religious bodies are frequently registered as NGOs.

Laws governing NGOs in India

Controversy

Foreign Funding Allegation

Intelligence Bureau, in a report accused "foreign-funded" NGOs of "serving as tools for foreign policy interests of western governments" by sponsoring agitations against nuclear and coal-fired power plants and anti-GMO agitation across the country. The NGOs are said to be working through a network of local organisations to negatively impact GDP growth by 2–3%. [3] The report says,

A significant number of Indian NGOs funded by donors based in US, UK, Germany and Netherlands have been noticed to be using people-centric issues to create an environment, which lends itself to stalling development projects. [4]

It alleged that Greenpeace was leading a "massive effort to take down India's coal-fired power plant and coal mining activity" by using foreign funds to "create protest movements under 'Coal Network' umbrella at prominent coal block and coal-fired power plant locations in India". [4] The Intelligence Bureau said the foreign NGOs and their Indian arms were serving as tools to advance Western foreign policy interests. [5] "Greenpeace aims to fundamentally change the dynamics of India's energy mix by disrupting and weakening the relationship between key players," the IB report said.

In April 2015, the Government of India shared a list of over 42,000 NGOs with Financial Intelligence Unit (FIU) to check suspicious foreign funding amid the crackdown on some top international donors for flouting the Foreign Contribution (regulation) Act, 2010 . These 42,273 NGOs were put under watch after intelligence reports claimed that several charity organisations are diverting funds for purposes other than the permitted use of foreign contribution. [6] The list includes NGOs operating in cultural,religious, social, economic and educational fields. For the first time, the government has clearly defined the sectors in which it has listed Christian missionaries, Hindu, Sikh and Muslim religious groups receiving foreign contribution besides other activities of NGOs in which funds are claimed to be utilised. There is also suspicion that money launderers could use the legitimate route to wire illicit money. [6] Many of them are Christian Missionaries and other religious groups who are found to evade taxes. [7] [8] [9]

Following the enquiry, permits of about 8,875 NGOs have been revoked for a variety of reasons ranging from non-filing of returns or non-compliance with Foreign Contribution Regulation Act (FCRA). [10]

See also

Related Research Articles

<span class="mw-page-title-main">Non-governmental organization</span> Organization, usually created to aid those in need

A non-governmental organization (NGO) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in humanitarianism or the social sciences; they can also include clubs and associations that provide services to their members and others. NGOs can also be lobby groups for corporations, such as the World Economic Forum. NGOs are distinguished from international and intergovernmental organizations (IOs) in that the latter are more directly involved with sovereign states and their governments.

<span class="mw-page-title-main">Nonprofit organization</span> Organization operated for a collective benefit

A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, or simply a nonprofit, is a legal entity organized and operated for a collective, public or social benefit, as opposed to an entity that operates as a business aiming to generate a profit for its owners. A nonprofit organization is subject to the non-distribution constraint: any revenues that exceed expenses must be committed to the organization's purpose, not taken by private parties. Depending on the local laws, charities are regularly organized as non-profits. A host of organizations may be nonprofit, including some political organizations, schools, hospitals, business associations, churches, foundations, social clubs, and consumer cooperatives. Nonprofit entities may seek approval from governments to be tax-exempt, and some may also qualify to receive tax-deductible contributions, but an entity may incorporate as a nonprofit entity without having tax-exempt status.

<span class="mw-page-title-main">Housing association</span> Organisations providing low-cost "social housing"

In Ireland and the United Kingdom, housing associations are private, non-profit making organisations that provide low-cost "social housing" for people in need of a home. Any budget surplus is used to maintain existing housing and to help finance new homes and it cannot be used for personal benefit of directors or shareholders. Although independent, they are regulated by the state and commonly receive public funding. They are now the United Kingdom's major providers of new housing for rent, while many also run shared ownership schemes to help those who cannot afford to buy a home outright.

A foundation is a type of nonprofit organization or charitable trust that usually provides funding and support to other charitable organizations through grants, while also potentially participating directly in charitable activities. Foundations encompass public charitable foundations, like community foundations, and private foundations, which are often endowed by an individual or family. Nevertheless, the term "foundation" might also be adopted by organizations not primarily engaged in public grantmaking.

<span class="mw-page-title-main">Charitable organization</span> Nonprofit organization with charitable purpose

A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being.

A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. This may include maximizing social impact alongside profits for co-owners.

The social economy is formed by a rich diversity of enterprises and organisations, such as cooperatives, mutuals, associations, foundations, social enterprises and paritarian institutions, sharing common values and features:

This article describes the various laws related to non profit organisations in India. A non profit organisation can be registered in India as a Society, under the Registrar of Societies or as a Trust, by making a Trust deed, or as a Section 8 Company, under the Companies Act, 2013.

Laws regulating nonprofit organizations, nonprofit corporations, non-governmental organizations, and voluntary associations vary in different jurisdictions. They all play a critical role in addressing social, economic, and environmental issues. These organizations operate under specific legal frameworks that are regulated by the respective jurisdictions in which they operate.

<span class="mw-page-title-main">Cooperative banking</span> Type of retail or commercial bank organized cooperatively

Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world.

Throughout its history, the policies and objectives of the non-governmental environmental protection and conservation organization Greenpeace have been criticized by a number of groups, including national governments, members of industry, former Greenpeace members, scientists, political groups, and other environmentalists. The organization's methods, such as the use of direct action, have also led to controversy and legal action.

Indian Register of Shipping (IRClass) is an internationally recognised, independent ship classification society, founded in India in 1975. It is a public limited company incorporated under Section 25 of the Indian Companies Act 1956 (Section 8 of Indian Companies Act 2013). It is a Non-Profit organisation, Public undertaking and a member of the 12 member International Association of Classification Societies (IACS). It was inducted into IACS along with Croatian Register of Shipping (CRS) and Polish Register of Shipping (PRS).

The Societies Registration Act, 1860 is a legislation in British India which allows the registration of entities generally involved in the benefit of society – education, health, employment etc.

Greenpeace India is the Indian branch of the global environmental group Greenpeace, a non-profit NGO, with a presence in 55 countries across Europe, the America, Asia. Greenpeace India has legally registered society in four locations with Bengaluru as its headquarters and other branches at Delhi, Chennai, Patna.

<span class="mw-page-title-main">Foreign Contribution (Regulation) Act, 2010</span> Act of the Parliament of India

The Foreign Contribution (regulation) Act, 2010 is an act of the Parliament of India, by the 42nd Act of 2010. It is a consolidating act whose scope is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto. It is designed to correct shortfalls in the predecessor act of 1976. The bill received presidential assent on 26 September 2010.

The Priya Pillai offloading of January 2015 was an incident in India where an environmental activist was offloaded from a flight in order to prevent her from testifying internationally on the activity of a firm registered in the UK.

The Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund was created on 27 March 2020, following the COVID-19 pandemic in India. Although it is named for the Prime Minister of India, and uses the State Emblem of India, it is a private fund, used at the discretion of the Prime Minister and the Fund's trustees, and does not form a part of the Government of India's accounts. The Fund was established for the purpose of redressing the COVID-19 pandemic in India, in 2020. While complete documentation for the Fund's establishment has not been made public, the Government of India has stated that the Prime Minister of India, Narendra Modi, is the chairman of the fund, and that trustees include the Minister of Defence, Rajnath Singh; the Minister of Home Affairs, Amit Shah, the Minister of Finance, Nirmala Sitharaman, and several corporate leaders and industrialists, including Ratan Tata, and Sudha Murty.

Foreign funding of NGOs is a controversial issue in some countries. In the late Cold War and afterward, foreign aid tended to be increasingly directed through NGOs, leading to an explosion of NGOs in the Global South reliant on international funding. Some critics of foreign funding of NGOs contend that foreign funding orients recipients toward donor priorities, making them less responsive to the communities they work in.

References

  1. Mathew Cherian, Director CAF India
  2. "Multi-State Co-operative Societies Act, 2002". wirc-icai.org. Retrieved 1 August 2023.
  3. "Foreign-funded NGOs stalling development: IB report – The Times of India". The Times of India. 12 June 2014. Retrieved 24 October 2015.
  4. 1 2 "Intelligence Report Claims Foreign-Funded NGOs Hurt India's Economy". India. Retrieved 24 October 2015.
  5. "Intelligence Bureau says Greenpeace endangers economic security". Reuters India. Archived from the original on 8 December 2015. Retrieved 24 October 2015.
  6. 1 2 "Over 42,000 NGOs Under Government Scanner". The New Indian Express. Archived from the original on 1 May 2015. Retrieved 24 October 2015.
  7. "NGO under Scanner for Diverting Funds". The New Indian Express. Archived from the original on 25 November 2015. Retrieved 24 October 2015.
  8. "Vatican Charity Funded Political Activities, Put Under Government Scanner: Sources". NDTV.com. Retrieved 24 October 2015.
  9. Burnett, John. "Can A Television Network Be A Church? The IRS Says Yes". NPR.org. Retrieved 24 October 2015.
  10. "4,470 NGO Licences cancelled: Sisodia's Kabir, DU, JNU on list". The Indian Express. 10 June 2015. Retrieved 24 October 2015.