not for profit

Not For Profit

All you need to know

An NPO/NGO can be formed for the promotion of any useful object like sports, education, research activities etc. The term No Profit does not mean that the Company cannot generate profit or income, but it essentially means applying the income for further promotion of the object and not for distributing it to the promoters.

What is Non Profit Organization (NPO)?

A Non-Profit Organization means a trust, company or other association of persons established for a public purpose and

The income and property of which are not distributive to its members or office bearers except as reasonable compensation for services rendered.

In India, NGO is a term for all non-profit organizations including Trust, Society and Section 8 Company.

Trust: In Charitable Trust at least two people are required, there is no limit of maximum members

Society: In society, the minimum seven members are required to be the members

Section 8 Company: A non-profit Company can be registered under section 8 of the Companies Act with the Registrar of Companies.

Other names for such not-for-profit organizations are “Sangathan”, “Sangh”, “Sangam”. Income tax exemption is available for all non-profit NGOs.

Benefits of registering an NPO:

  • Improves the credibility of the sector because NPOs can account to a public office.
  • Brings organizations into a formal system.
  • Helps the sector to get organized.
  • Helps in finding ways of getting benefits like tax exemptions and funding opportunities.
  • Donations made by individuals to the nonprofit corporation may be tax-deductible