Benefits from a tax exemption

Registering the firm as an NGO under the Companies Act, 2013 allows it to take advantage of many financial benefits, such as being exempt from a variety of taxes, which allows the company to save money on taxes and invest it in new projects.

Right to Acquire Assets

To operate autonomously, no minimum share capital is required. Donations to NGOs can be used to directly fund them. As a result, NGOs do not require a bigger share capital to operate freely.

Personal Liability Protection

You can purchase, acquire, and register assets and stakes in your NGO's name. This is a highly well-kept method of shielding yourself from endless obligation in the event of an unfavourable event like as foreclosure, bankruptcy, judgement debt, or divorce.

Ownership Transfer

The Income Tax Act of 1961 NGOs registered under the Companies Act of 2013 are not limited in their ability to transfer ownership or claims to earned interests.

A legal Entity

Your company's transactions and interactions with the community will improve as a result of this. In addition, the NGO can sue to enforce its legal rights or be sued by its registered trustees.

Stamp Duty Exemption

Section 8 corporations that qualify as non-profit organisations are exempt from stamp duty under the Income Tax Act, allowing the company to save money on taxes. All of the taxes saved by avoiding stamp duty are subsequently used to promote the company's goals. It also aids in the protection of finances for the organisation, which aids in the easier operating of the company and increased production.

A well-organized financial plan

Having an NGO can provide you with a tax-free mechanism for the activities you carry out on behalf of the registered NGO. Non-profit organisations are excused from paying taxes because they are not for profit. You can create a well-structured financial plan that permits your company to operate without incurring any tax liabilities.

Entity Stability

Your organization's registration may imply that it has effective and accountable leadership in place. When compared to an unregistered group, the public will regard it as more stable. Political parties, the government, donor agencies, financial institutions, charitable groups, and other non-governmental organisations (NGOs) will all wish to work with a recognised organisation to achieve common goals.

Perpetual Succession

This indicates that an NGO has an indefinite lifespan and will continue to exist even if the founders or trustees die or quit the organisation. The organization's existence will come to an end only if it is formally wound up by an Indian court order. This, among other things, may allow for eternal succession.

Credit Acceptance

By registering as a non-profit organisation, you can gain access to credit from lenders and financial organisations. A lending facility can be used to promote the organization's activities, fund a mortgage, or purchase land or fixed assets. Banks will need proof of registration as a condition of granting a loan.

The Preservation of Names

Once your organisation is registered, no one else in India can use the same or a similar name. This offers the added benefit of preventing illegal usage of your company's picture and name.

Opening a Bank Account

The fact that the NGO has opened a corporate account with a bank may indicate that it is transparent. Some private individuals, government agencies, donor agencies, and other NGOs will be hesitant to write you a check in your personal name on behalf of your organisation. A bank account for the NGO would be a proof of its legitimacy and ready to accept donations. To be able to create a bank account, you must show confirmation that your organisation is registered.