NGOs can be registered in India in 3 forms i.e. Trust, Society or Section 8 Company. Section 8 Company is the most preferred form. 

Section 8 Company - An Overview

A Section 8 company under the Companies Act, 2013 or a Section 25 Company as per the Companies Act,1956 is a non-profit organization registered with the objective of promoting the fine arts, science, literature, or knowledge sharing for a purposeful matter or for charity. These are the limited companies established under the Companies Act. The Government grants these companies an exclusive license under the Section 8 Companies Act. The three main conditions for granting the license are:

• The company should form for a charitable purpose.
• Income and profits should be used for these objects.
• The company should not pay any dividends to its members.

What Gives Edge to Section 8 Company Over Trust and Society

Online Verification:

Trust - No Govt. Website for Online Verification
Society - No Govt. Website for Online Verification
Section 8 - Can be verified on MCA Portal

Name:

Trust - Name can be copied by others, which creates hurdles in making a separate identity
Society - Name can be copied by others, which creates hurdles in making a separate identity
Section 8 - There can be only 1 Section 8 Company of 1 name in India

Level of Operations:

Trust - National level, but it does not have a registration certificate, hence creates doubt in minds of people (including foreigners planning to donate)
Society - Complicated process of registration of the national level society
Section 8 - National level

CSR Donations:

Trust - Less preferred by Companies required to do CSR
Society - Less preferred by Companies required to do CSR
Section 8 - More preferred by Companies required to do CSR

Checklist for Registering a Section 8 Company in India

As defined under the Companies Act 2013, we have to ensure the requirements of the following checklist

Two Directors

A private limited company must have at least two directors and at most, there can be 15 directors. Among all the directors in the company, at least one must be a resident of India. A private limited company can also be registered with only 1 director but that is called one person company (OPC).

Unique Name

The name of your business must be unique. The suggested name should not match any existing companies or trademarks in India. The name must have the words "Foundation, Forum, Federation, Association or Council".

Minimum Capital Contribution

There is no minimum capital amount for a company. A company can be registered even with a capital of Rs. 1,000/-

Registered Office

The registered office of a company does not have to be a commercial space. Even a rented home can be the registered office.

Documents Required for Section 8 Company Registration

In India, Private Limited company registration cannot be done without proper identity and address proof. These documents will be needed for all the directors and the shareholders of the company to be incorporated. Listed below are the documents that are accepted by MCA for the online company registration process.

Identity and Address Proof

• Scanned copy of PAN Card. Foreign nationals must provide a valid passport (Shareholders and Directors) 
• Scanned copy of Voter’s ID/Passport/Driver’s License/Aadhar (Shareholders and Directors)
• Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill (Shareholders and Directors)
• Latest Passport size Color photograph of all the promoters (Shareholders and Directors)

For foreign nationals, an apostilled or notarized copy of the passport has to be submitted mandatorily. All documents submitted should be valid. The residence proof documents like the bank statement or the electricity bill must be less than 2 months old.

Registered Office Proof

• Latest & Clear Telephone Bill/Electricity Bill/ /Water/Gas Bill of the registered office address
• No Objection Certificate from the owner(s) of the premises of the registered office.

Note: Your registered office need not be a commercial space; it can be your residence too.

Why register Section 8 Company - Benefits

The following are the advantages of incorporating a Section 8 company over other modes of registering an NGO:

• It has organised operations and greater flexibility.
• Avoids meticulous registration process and no physical presence required.
• No requirement of a minimum paid-up capital.
• Seamless procurement of tax benefits under section 12AA and 80G of the Income Tax Act.
• Any partnership firm can be a member in its individual capacity.
• Can be registered with only 2 members as against the requirement of 7 persons for registration of the society.
• More creditworthiness and goodwill as it is registered with the Central Government of India.
• No other NGO can be registered in India with a similar name.
• All filings including the filing of the balance sheet with ROC and other activities such as name change, office address change or all other kinds of change is done online.
• Most preferred from the point of view of grants by Government.
• Most preferred from the point of view of CSR funding.
• Easy to transfer ownership in comparison to trust and societies.
• Can be verified online on the website of the Government.
• Voting rights are in percentage and hence only 1 person can hold 99.99% voting rights and thus it is easy to take policy decisions.
• It is a national level NGO.
• It can be converted into a normal Private Limited or Public Limited Company anytime.