If you are stuck in such a situation, here is what to do.

Mr. Rohan Mehra, a compassionate resident of the bustling city of Amodhpur, wished to establish a Non-Governmental Organisation (NGO) named ‘Uplift Foundation’. His vision was to provide educational resources to underprivileged children in his community. While researching the process, he became entangled in a web of conflicting information, particularly regarding Corporate Social Responsibility (CSR) funding. Some online sources suggested his NGO would need a three-year track record just to register for CSR funds, while others claimed registration was possible for new entities, but companies would be hesitant to provide funding without a proven history. Confused and disheartened, Mr. Mehra was unsure if his dream of starting the Uplift Foundation was viable, especially concerning its financial sustainability through corporate and individual donations.

Advice in such cases

Navigating the legal framework for NGOs in India can seem complex, but it is a well-defined process. It is crucial to distinguish between registering for CSR eligibility and actually receiving CSR funds.

• First, determine the legal structure of your NGO. In India, an NGO can typically be registered as a Trust, a Society, or a Section 8 Company. Each has its own set of regulations and compliance requirements.
• Understand the CSR ecosystem. The Companies Act, 2013, mandates certain companies to spend a portion of their profits on CSR activities. To be eligible to receive these funds, an NGO must register itself with the Ministry of Corporate Affairs (MCA) by filing Form CSR-1.
• There is no requirement for an NGO to have a three-year track record to file Form CSR-1. A newly registered NGO can apply for it. However, the practical reality is that most corporations prefer to partner with established NGOs that have a proven track record of at least three years for their own due diligence and risk assessment purposes.
• Even if securing CSR funding seems distant for a new NGO, it can absolutely accept donations from individuals, philanthropists, and other entities not governed by the CSR mandate. Building a portfolio of small, successful projects through such donations is the best way to establish the track record needed to attract corporate funding later.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

The establishment and operation of NGOs, along with their funding, are governed by several key statutes:

• The Companies Act, 2013: Section 135, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, governs the entire framework of CSR in India. The rules mandate the filing of Form CSR-1 for NGOs seeking to undertake CSR activities.
• The Indian Trusts Act, 1882: Governs the formation and regulation of private trusts. Public charitable trusts are largely governed by general principles of law and relevant state-specific acts.
• The Societies Registration Act, 1860: A central act that provides for the registration of literary, scientific, and charitable societies. Many states have their own versions of this act.
• The Income Tax Act, 1961: Sections 12A and 80G are critical. Registration under Section 12A exempts the NGO’s income from tax, while registration under Section 80G allows donors to claim a tax deduction for their contributions, making it an attractive proposition for them.

If you are the complainant

If you are the founder of the NGO, like Mr. Mehra, you are the one initiating the process. Your steps should be methodical:

• Finalize the mission, vision, and governing body of your proposed NGO.
• Choose the legal structure (Trust, Society, or Section 8 Company) that best suits your objectives.
• Draft the necessary constitutional documents: a Trust Deed for a Trust, or a Memorandum of Association and Rules & Regulations for a Society/Section 8 Company.
• Apply for registration with the relevant authority (Sub-Registrar for Trusts, Registrar of Societies, or Registrar of Companies for Section 8 Companies).
• Once registered and a PAN is obtained, immediately apply for registration under Sections 12A and 80G of the Income Tax Act.
• After obtaining the registration certificate, you can file Form CSR-1 on the MCA portal to get a unique CSR Registration Number.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

If you feel victimized by misinformation or the daunting nature of the regulations, it is important to gain clarity and proceed strategically.

• Do not be discouraged by the “three-year track record” myth. It is a corporate preference, not a legal bar to entry. You are not prevented from starting your work.
• Focus on what you can control. Start by seeking donations from your local community, friends, family, and individual philanthropists. Meticulously document your projects, expenditures, and impact.
• Create a strong online presence and transparently report your activities. This builds credibility and serves as your digital track record.
• Use the initial years to build a solid foundation of governance, compliance, and small-scale project execution. This will make your NGO a highly attractive partner for corporates once you cross the three-year mark.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

In the context of NGO registration and funding, direct interaction with the police is rare unless there are allegations of financial fraud or criminal misconduct. The primary interactions are with administrative and regulatory bodies:

• Registrar of Societies/Companies/Trusts: These authorities are procedural. They will scrutinize your application and documents to ensure they comply with the law. Their behaviour is bureaucratic; any discrepancies or missing documents will lead to rejection or queries, requiring you to refile.
• Ministry of Corporate Affairs (MCA): The filing of Form CSR-1 is an online, system-driven process. As long as the required documents (Registration Certificate, PAN) are uploaded correctly, the system typically generates the CSR number automatically. The real scrutiny comes from the corporate donors.
• Income Tax Department: The authorities scrutinize applications for 12A and 80G registration carefully to ensure the genuineness of the NGO’s charitable activities. They may ask for detailed project plans and financial projections.

FAQs people normally have

What evidence is required?

The term “evidence” here translates to the necessary documentation for various registrations:

• For NGO Registration: A drafted Trust Deed or Memorandum of Association/Articles of Association; identity and address proofs of all founding members/trustees; and proof of the registered office address (like a utility bill or rent agreement).
• For Form CSR-1 Filing: A copy of the NGO’s registration certificate and the PAN card of the NGO.
• For 12A and 80G Registration: The NGO’s registration certificate, PAN card, constitutional documents, detailed notes on the activities of the NGO, and financial statements for the last one to three years (if applicable).

How long will the investigation take?

This refers to the timeline for various approval processes:

• NGO Registration: This can take anywhere from 2 weeks to 2 months, depending on the state and the type of entity.
• CSR-1 Registration: Being an online process, it is usually very quick, often completed within a week, provided all documents are in order.
• 12A and 80G Registration: This is a more lengthy process and can take from 3 to 6 months, as it involves detailed verification by the Income Tax Department.

Advocate Sudhir Rao, Supreme Court of India