Formation of NPO By CA Ved MittalVed & Associates

205 , Jagdamba Tower13, commercial complex

Delhi-110092Contact : 011-22456788,42686788

9811011665cavedmittal@gmai.com

Trust Society Section 8 Company ( Section 8 of New

Company Act 2013 ) Special Licenses ( State Trading corporation)

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Formation of A NPO

Section 2(15) of income tax Act 1961 defines the expression “charitable purpose” in an inclusive manner to include◦ Relief of the poor◦ Education◦ Medical relief◦ Preservation of Environment(Including Watershed,

forests and wildlife)◦ Preservation of monuments or places◦ Preservation of artistic or historic interest◦ Any other object of general public utility

Meaning of “charitable purpose”

The Following Laws or constitutional Articles of Republics of India are relevant to the NPO◦ Article 19(1) ( c ) and 30 of the constitution of India◦ Concurrent List ( List III ) Entry 10 “ Trusts and

Trustee” and Entry 28 “ Charities and charitable institutions”

◦ Income tax Act 1961◦ Public Trust Act of Various States and Indian Trust Act

1882.◦ Society Registration Act 1860.◦ Section 8 of Indian companies Act 2013◦ Foreign Contribution Regulation Act 2010

Relavent Acts

There is NO ANY CENTRAL ACT’S in relation to the charitable trust’s which cover the whole meanings.

Charitable and Religious Trust Act 1920 is the one of the central act which governs many provisions related to Public Trust’s.

First Law of the trust in India came into force known as Indian Trust Act 1882 but it was basically for Private Trust’s.

In the state of Maharastra,Rajesthan,Gujrat, Madhya Pradesh etc have their own State Act’s.

Section 92 of Code of Civil Procedure 1908 also express the meaning of Public charity.

Trust in the Eye’s of Law

The Registration for a Trust , whether in relation to a movable property or an immovable property is optional but always desirable.

A Registered Trust Deed has certain advantages which are listed below◦ A registered Trust Deed is an official document

which carries support and force of Law◦ It effectuates transmutation of Possession◦ A Conveyance of Trust proper to trustee under a

Registered Deed is generally not open to Challenge.

Registration of Trust

These trust are registered under the Sub-Registrar as per the area of the registered office of the trust.

Requirements:-(i) Settler:- Who creates the trust.(ii) Trustee:- Who look after the trust. Minimum 2(iii) Objectives.(iv) Initial Corpus Fund / Trust Property.(v) Beneficiaries:- Public at Large with any

discrimination as Cast, colour & Religion.

Registation of Trust

The Following mentioned Papers need to be submitted at the Office of Sub- Registrar

Two copy of the Trust deed with duly signed and photo of settler and trustees

Address proof of the registered office with NOC Address proof of Settler and Trustees A Pay order of Rs. 1100/= Stamp Duty @ 3% of initial Trust Property value (In Delhi ) Two witness All other procedure as same as you purchased the

property and transfer

Registration of The Trust

Key points to be remembered:-◦ Name of the Trust.◦ Name of the Settler.◦ Name of the Trustees.◦ Initial Corpus Fund.◦ Main Objective of the Trust.◦ Ancillary Objective.◦ General Body.◦ Executive Committee.◦ Quorum.◦ Operating Bank Account.◦ Dissolution.

Key Points of Trust Deed

Details of District’s in DelhiDISTRIC

T OFFICE ADDRESS

 CENTRAL Sub-Registrar- I Office of SR, Old Court Building, Kashmere Gate, Near Ritz Cinema, Delhi. Phone No.(Off.) 23860435

CENTRAL Sub-Registrar- III Office of SR-III, 4/7, Asaf Ali Road, New Delhi. Phone No.(Off.) 23274826

SOUTH Sub-Registrar- V Office of SR-V, Mehrauli Tehsil Building, Mehrauli, New Delhi. Phone No.(Off.) 26646116

SOUTH e-Sub-Registrar- V Office of e-Sub Registrar-V, Mehrauli Tehsil Building, Mehrauli, New Delhi. Phone No.(Off.)26646700 

NEW DELHI Sub-Registrar- VII Office of SR-VII, INA, Vikas Sadan, New Delhi. Phone No.(Off.) 24626011

SOUTH WEST

e-Sub-Registrar- IX

Office of SR-IX, Old Terminal Tax Building, Kapashera, New Delhi. Phone No.(Off.) 25069483

DISTRICT OFFICE ADDRESS

WEST e-Sub-Registrar-II Office of SR-II,Opposite Rajdhani College, Basai Darapur Delhi.

WEST e-Sub-Registrar-IIA Office of e-Sub-Registrar II A, Punjabi Bagh (Nangloi) Near Nangloi Metro Station, New Delhi. Phone No.(Off.) 25183588

NORTH EAST Sub-Registrar - IV DC Office Complex NE, Nand Nagri, Delhi. Phone No.(Off.) 22132199

NORTH EAST Sub-Registrar - IV-A DC Office Complex NE, Nand Nagri, Delhi. Phone No.(Off.) 22139178

SHAHDARA e-Sub-Registrar - IV-B

Office of e-Sub Registrar-IV B,DC Office Complex NE, Nand Nagri, Delhi. 

EASTSub-Registrar – VIII(Gandhi Nagar) Office of the SR-VIII, L M Bundh Office Complex, Shastri

Nagar, Delhi. Phone No. (Off.) 22025615

EASTe-SubRegistrar –VIIIA(Preet Vihar)

Office of the SR-VIII A, L M Bundh Office Complex, Shastri Nagar, Delhi. Phone No. (Off.) 22025615

NORTH  Sub-Registrar – VI O/o Sub Registrar, G.T. Karnal Road, Ali Pur BDO Office, Delhi.

NORTH WEST e-Sub-Registrar – VI O/o e-Sub-Registrar, Near Police Station,Kanjhawala, Delhi-110081

NORTH WEST e-Sub Registrar – VI O/o e-Sub Registrar, Sector-16, Ambedkar Bhawan, Rohini, Delhi.

NORTH WEST Sub-Registrar – VIA O/o Sub-Registrar, Sector-16,Ambedkar Bhawan,Rohini, Delhi.

Details of District’s in Delhi

Societies Registration Act 1860 is a Central Act.

Various State made their on act on the basis of Societies Registration Act 1860. We can say this act is the Foundation of all Societies Registration Act’s.

Minimum 7 Member in State Level and minimum 9 member with 8 different state’s at National Level ( in Delhi ).

Various Applicable Law’s of Society

Searching the Name of Proposed Society ( Via Link http://www.delhi.gov.in/wps/wcm/connect/doit_industry/Department+of+Industries/our+Services1/Society+Name+Search ).

Two copy of the Bye-Laws with duly signed by all initial Members. Address proof of the registered office with NOC Address proof of all initial Members A Receipt of Rs 50/= Affidavits by the Presidents/ Secretary. All the papers has to be notarized. Submit all the Papers with the office of Sub- Registrar of the District

in Delhi. After duly verification of all the document a certificate of the

registration of Society has been issued with True Certify copy of Bye-Law’s of the Society.

How to Register Society

Key point to be remembered◦Name of the Society.◦Work Scope within state or Whole of India.◦Main Objective.◦Ancillary Objective.◦General Body.◦Executive Committee.◦Quorum.◦Operating Bank Account.◦ Dissolution Clause.

Bye- Laws of the Society

Minimum 2 members in a private and 7 members in public company.

2 director in Private Company & 3 Director in Public Company.

Company may or may not have Share Capital. Main objective of the company should be

promote commerce, art, science, Religion, charity or other useful objectives.

Apply its profit for promoting its objects and prohibit payments of dividends to its member’s.

Requirement of Section 8 Company

Registration Procedure:-(i) Availability of name :- in form no INC-1

applies with the ROC as normal name application for companies.

(ii) Application for License :- After approved name we file application for License in form no INC-12 with the following documents.

1. Draft Memorandum of Association as per form INC-13.

2. Draft Article of Association

COMPANY U/S 8

ii. Application for License ( continued ):-

3. Declaration in form No INC-14 ( Professional Declaration ).

4. Declaration in form No INC-15 ( Directors Declaration ).

5. Estimated income & Expenditure for next 3 years6. Approval/ concurrence/ NOC of the concerned

Authorities7. Copy of Resolution Passed in General Meeting and

Board Meeting.8. Assets & Liabilities Statements with their values as

per applicable Rule.9. List of Proposed Promoters.10. List of Proposed Directors.11. List of key managerial personnel.

(iii) After Receiving License we file following form Form

HeadingCompanies Act 1956

Companies Act 2013

Application for incorporation of the company ( other than OPC )

Form – 1 Form – INC-7

Notice of Situation or change of situation of Registered office

Form- 18 Form-INC-22

Particulars of appointment of Directors

Form-32 Form- DIR-12

Registration Procedure ( contin…..)

Differential factors Trust Society

Company ( Sec 8 )

     Basic Document

  Trust Deed - which contains objects of the

trust (bye-law)

Memorandum of AssociationArticles of

Association with rules & regulations.

Memorandum of Association Articles of

Association     Formation   Very Easy  Easy   Little Hard

   Jurisdiction

Deputy Registrar / Charity Commissioner

Registrar of Societies - 

For Maharashtra Charity

CommissionerRegistrar of Companies

Legislation / Statute

Relavent state Trust Act - Bompany Public Trust

Act 1950Societies

Registration Act 1860

Indian Companies Act 2013

       ObjectsSocial benefits &

CharitableSocial Benefits &

Charitable   Nonprofit Activities

Authority For Registration Sub- Registrar of Societies

Registrar of Society/ Office SDM

Headquarter. Registrar of Company

Controlling Monopoly Democratic Professional

Comparison

Differential factors Trust Society

Company ( Sec 8 )

Re-ammendment

or         

Modification of Objects

Can be done by Trustees but

Procedure u/s 92 of code of civil procedure

be required

by Members in governing body meeting with

Special ResolutionComplicated 

Legal ProceduresRequired Members

     Minimum = 2     Maximum = No

limit      Minimum = 7

     Maximum = No limit

Minimum = 2 /3 Maximum = No

limit

Registration  

As Trust with the Registrar.

As Society with Society Registrar - Both as a society

and a trust in some states like

Maharastra.As per Companies

Act under Section 8

Stamp Duty

As per the Stamp duty Act of relevant State

of Trust property Value will be executed in non judicial stamp

paper with the registrar

No stamp paper required for

Memorandum of association, and

rules and regulations.

No Stamp paper required for

Memorandum of association and

articles of association.

Name Very easy to chooseVery easy to

choose

Prior approval required from Registrar of Companies.

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Differential factors Trust Society

Company ( Sec 8 )

Management Board Trustees Governing BodyBoard of Directors &  Management

committee

Voting RightsEqual rights to all

TrusteeEqual Rights to all

MembersDepand on share

HoldingSuccession in Management By Appointment By Election By Appointment

MeetingsBoard of Trustee

Meeting

Annual Meeting As per Law. Governing Body meeting as per the rules of

Society.Shareholder / Directors

MeetingMembership

Transfer By Nomination By NominationTransfer as per Companies Act.

Member Admission PossibleGoverning Body

Control

General Body or Board Control

through issue of Capital.

Dissolution or Take over by State Possible Possible

As Per Companies Act 2013

Compliance Low Medium HighFilling the Suit by

outsider In the name of TrusteeIn the name of

Governing Body In the name of Company

Annual documents to Be filed No Such Requirement

Annual Audited Accounts and List of

Governing BodyAnnual Return and audited Accounts

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