Introduction:-

You buy goods of daily consumption from the general store of your locality, such

as clothes from cloth shop or you see a movie in a cinema hall. These are all business organizations that deal in purchasing and selling goods and services. Their objective is to earn profit. You must have studied in a school, you go to a hospital for treatment. You may be a member of a sports club of your area. These are the organizations that are founded not to earn profits but to provide services to their members and to the public in general.

Meaning of NPO : it is An incorporated organization which exists for educational or charitable reasons, and from which its shareholders or trustees do not benefit financially. Any money earned by a non-profit organization must be retained by the organization, and used for its own expenses, operations, and programs. Many non-profit organizations also seek tax exempt status, and may also be exempt from local taxes including sales taxes or property taxes.

Defn of NPO (Non-profit organization) or NCO (Non-commercial organization) or NPB (Non for profit Business)
It is A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. it is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. it is an incorporated organization which exists for educational or charitable reasons, and from which its shareholders or trustees do not benefit financially.

Objective & goal:a) Aim to improve society b) Bettering the communities they serve c) Creates changes d) Provide sustainable development e) Contribution in national income f) Provide benefits & services to general public

 Function: Economic activity Supervision and management provisions. Representation. Accountability and auditing provisions. Provisions for the amendment of the statutes or articles of incorporation. Provisions for the dissolution of the entity. Tax status of corporate and private donors. Tax status of the foundation.

Nature: Serve the public Having defined purpose Service oriented Statutory body of tax Based on Nature of Work such as:- religious, charity, Artistic, prevention of cruelty, labour organization, scientific, Health Care etc.

Scope: Art, culture & Humanities Education & Research Environmental & Animals Health Services Public & social Benefit Religion Mutual /Membership Benefit International & foreign Affairs

In India The NPOs are commely known as NGOs:They can be registered in four ways:1) Trust 2) Society 3) Section-25companys 4) Special Licensing

The following laws or Constitutional Articles of the Republic of India are relevant to the NGOs: Articles 19(1)(c) and 30 of the Constitution of India Income Tax Act, 1961 Public Trusts Acts of various states Societies Registration Act, 1860 Section 25 of the Indian Companies Act, 1956 Foreign Contribution (Regulation) Act, 1976 Trust Statute/Legislation Relevant State Trust Act or Bombay Public Trusts Act, 1950 Deputy Registrar/Charity commissioner As trust Society Societies Registration Act, 1860 Registrar of societies (charity commissioner in Maharashtra). As Society In Maharashtra, both as a society and as a trust Memorandum of association and rules and Section-25 Comapny Indian Companies Act, 1956 Registrar of companies

Jurisdiction

Registration

As a company u/s 25 of the Indian Companies Act. Memorandum and articles of association.

Registration Document

Trust deed

regulations Stamp Duty Trust deed to be executed on nonjudicial stamp paper, vary from state to state No stamp paper required for memorandum of association and rules and regulations.

and regulations No stamp paper required for memorandum and articles of association. Minimum three trustees. No upper limit.

Members Required

Minimum two Minimum seven trustees. No upper managing limit. committee members. No upper limit. Trustees / Board of Trustees Governing body or council/managing or executive committee Appointment or Election by members of the general body

Board of Management

Board of directors/ Managing committee Election by members of the general body

Mode of Succession on Board of Management

Appointment or Election

IV. Special Licensing

In addition to registration, a non-profit engaged in certain activities might also require special license/permission. Some of these include (but are not limited to): A place of work in a restricted area (like a tribal area or a border area requires a special permit the Inner Line Permit usually issues either by the Ministry of Home Affairs or by the relevant local authority (i.e., district magistrate). To open an office and employ people, the NGO should be registered under the Shop and Establishment Act. To employ foreign staff, an Indian non-profit needs to be registered as a trust/society/company, have FCRA(foreign contribution regulation Act) registration and also obtain a No Objection Certificate. The intended employee also needs a work visa. A foreign non-profit setting up an office in India and wanting staff from abroad needs to be registered as a trust/society/company, needs permission from the Reserve Bank of India and also a No Objection Certificate from the Ministry of External Affairs.