here we will discuss about incorporation of all npo types in summery . click on the link for full detail discussion 

Incorporation Types

Incorporation of Trust

Types of Non Profit organization

There are many different types of non-profit organizations, each with its own unique mission and focus. Here are some of the most common types:

1. Charitable organizations: These organizations provide direct services to individuals and communities in need, such as food banks, homeless shelters, and animal shelters.
2. Educational organizations: These organizations provide educational opportunities to the public, such as museums, libraries, and universities.
3. Religious organizations: These organizations provide religious services and promote their faith, such as churches, mosques, and synagogues.
4. Social welfare organizations: These organizations advocate for social change and promote public well-being, such as environmental groups, civil rights organizations, and community development organizations.
5. Professional associations: These organizations provide support and services to professionals in a particular field, such as bar associations, medical associations, and engineering societies.
6. Mutual benefit organizations: These organizations provide benefits and services to their members, such as credit unions, cooperatives, and trade associations.
7. Community foundations: These organizations pool charitable funds from donors and distribute them to local nonprofits.

In addition to these, there are many other types of non-profit organizations, such as:

• Arts and culture organizations
• Health organizations
• International development organizations
• Research organizations
• Sports organizations

TRUST

• A trust is an obligation attached to ownership of property. The owner (settlor) transfers ownership to a trustee who manages it for the benefit of another (beneficiary) or themselves and others. This relationship relies on confidence placed in the trustee to uphold their duties.

Key Definitions:
• Trustee: The person entrusted with managing the trust property.
• Beneficiary: The person(s) who benefit from the trust.
• Trust property: Assets held by the trust for the benefit of beneficiaries.
Key Points of the Act:
• Creation of Trusts: Trusts can be created for any lawful purpose (e.g., education, maintenance, charity). The Act specifies legal requirements for valid creation.
• Duties of Trustees: The Act outlines various duties, including acting honestly, prudently, and in the best interests of beneficiaries. It also prohibits self-dealing and unauthorized use of trust property.
• Rights of Beneficiaries: Beneficiaries have rights to information, accounts, and enforcement of their entitlements.
• Registration: Registration of trusts is not mandatory, but it offers certain benefits (e.g., easier enforcement).

 Types of Trust

• Public Trusts: Public trusts are created for the benefit of the general public or a particular community. They are often established for charitable, religious, educational, or philanthropic purposes. Public trusts are governed by state-specific trust acts and are subject to registration requirements.
• Private Trusts: Private trusts are created for the benefit of specific individuals or families. The beneficiaries are named in the trust deed, and the trust property is managed for their benefit. Private trusts are also governed by state trust laws.
• Charitable Trusts: Charitable trusts are a subset of public trusts and are specifically established for charitable purposes. These purposes may include the relief of poverty, advancement of education, promotion of health, and other activities beneficial to society. Charitable trusts enjoy certain tax benefits under Indian law.
• Religious Trusts: Religious trusts are created for the promotion and management of religious activities, including the maintenance of temples, mosques, churches, or other religious institutions. These trusts are often established to support religious rituals, festivals, and related activities.
• Educational Trusts: Educational trusts are formed to promote and manage educational institutions such as schools, colleges, and universities. The trust’s objectives include advancing education and providing facilities for academic development.
• Specific-Purpose Trusts: Specific-purpose trusts are established for a particular cause or objective, which may not fall strictly under the categories of charitable, religious, or educational trusts. These trusts are formed to fulfill specific goals outlined in the trust deed.
• Revocable Trusts: In a revocable trust, the settlor (the person creating the trust) retains the right to alter or revoke the trust during their lifetime. The terms of the trust can be modified or canceled, and the trust property can be returned to the settlor.
• Irrevocable Trusts: An irrevocable trust, once established, cannot be easily modified or revoked by the settlor. The assets placed in the trust become the property of the trust, and the settlor generally relinquishes control over them.

The essential elements of a Trust
The creation of a trust involves several essential elements that must be present for the trust to be valid and legally effective. These elements are generally recognized in trust laws around the world, including in India. Which are listed below

1. Settlor (or Grantor or Trustor): The settlor is the person who creates the trust by transferring property or assets into the trust. The settlor establishes the trust and defines its terms and conditions.
2. Intent: The settlor must have the intention to create a trust. This intention is a crucial element, and it distinguishes a trust from a simple gift or transfer of property.
3. Trust Property: The trust must involve specific property or assets. This property forms the subject matter of the trust, and it can include real estate, money, securities, or any other valuable assets.
4. Trustee: The trustee is the person or entity appointed by the settlor to manage and administer the trust property for the benefit of the beneficiaries. The trustee has a fiduciary duty to act in the best interests of the beneficiaries.
5. Beneficiary (or Beneficiaries): The beneficiary is the person or group of persons for whose benefit the trust is created. The trustee holds and manages the trust property for the benefit of the beneficiaries.

6. Purpose or Object: The trust must have a lawful purpose or object, which could be charitable, educational, religious, or for the benefit of specific individuals or families. The purpose of the trust is often specified in the trust deed.
7. Legal Formalities: The creation of a trust typically involves certain legal formalities, such as the execution of a written trust deed. In India, the Indian Trusts Act, 1882, prescribes certain formalities for the creation and administration of trusts.
8. Certainty and Possibility of Performance: The terms of the trust must be certain and capable of being performed. Uncertain or ambiguous terms may render the trust invalid. The purpose of the trust should also be possible to achieve.
9. Transfer of Legal Ownership: The legal ownership of the trust property is transferred from the settlor to the trustee. The trustee holds the property for the benefit of the beneficiaries, who have equitable ownership rights.
10. Administered in Accordance with Law: The trust must be administered in accordance with the law, and the trustee must fulfill their duties in compliance with the terms of the trust deed and legal requirements.
 

Documents required for trust registration
Complete process of trust registration

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12A Certificate

After the NGO is incorporation, they have to register as per Section 12A of the Income Tax Act for claiming exemption under Section 11 and 12 of the Income Tax Act. Section 12A allows non-profit entities to claim full tax exemption as per Section 11 and 12 of the Income Tax Act, 1961, i.e. Non-Profit Organizations, Charitable Trusts, Religious Institutions Welfare Societies, etc.
If any non-profitable trust or NGO fails to registered for 12A, their financial receipts or transactions would be taxable. Any family or private trusts are not allowed such exemptions and cannot obtain 12A registration.

Benefits of 12A Registration

• Governments And International Organizations Grant
• Registration Certificate Serves As Valid Proof Of The Purpose Of The NGO And Its Operations
• All NGOs, Trusts, Or Societies, Companies, Are Eligible To Avail Exclusion From Taxes
• FCRA Registration Benefits

Documents Required for 12A Registration

The 12A certificate is considered a legitimate document to prove the existence of your organisation. This can help secure funds from the government and international organizations . However, if the organisation fails to obtain a 12A registration certificate, it won’t be able to avail of the benefits of tax exemption.

• Proof Of Incorporation Of NGO
• PAN Card Of Registered Applicant Of NGO
• Trust Deed (In Case Of A Trust) Or MoA ,AoA Or Section 8 Company
• A Duly Filled Application Form
• Consecutive 2 Years Financial Statements

80G Certificate
80G is a certificate that exempts from paying taxes, to the donor. Donations to charitable trusts, section 8 company or organizations that are registered to exempt from taxes. The 80G certificate aims to encourage philanthropy by allowing donors to claim deductions on their taxable income for the amount donated to eligible organization.
 

Benefits of 80G Registration

• 80G Certification Increase The Prospects And Reliability Of Any Organization
• Donors Obtain The Benefits Of Less Taxable Incomes
• Possibility Of Attracting More Donors
• Eligibility To Get Government Funds
• NGO Owners Can Look For Foreign Contributions Without Any Inconvenience