NGO = NPO = Not For Profit

Karnav Shah


Nonprofit organization (abbreviated as NPO) is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals rather than to distribute them as profit or dividends.

While not-for-profit organizations are permitted to generate surplus revenues they must be retained by the organization for its self-preservation, expansion, or plans. NPOs have controlling members or boards. Many have paid staff including management, while others employ unpaid volunteers and even executives who work without compensation (or that work for a token fee, such as $10 per year).Where there is a token fee, in general, it is used to meet legal requirements for establishing a contract between the executive and the organization.

In India, NPOs are known commonly as Non-Governmental Organizations (NGOs).
They can be registered in four ways:
  1. Trust
  2. Society
  3. Section-25 Company
  4. Special Licensing
Registration can be done with the Registrar of Companies(RoC).
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

A non-governmental organization (NGO) is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations (UN), and is normally used to refer to organizations that do not form part of the government and are not conventional for-profit business. In the cases in which NGOs are funded totally or partially by governments, the NGO maintains its non-governmental status by excluding government representatives from membership in the organization. The term is usually applied only to organizations that pursue some wider social aim that has political aspects, but that are not overtly political organizations such as political parties. Unlike the term "intergovernmental organization", the term "non-governmental organization" has no generally agreed legal definition. In many jurisdictions, these types of organization are called "civil society organizations" or referred to by other names.

The number of internationally operating NGOs is estimated at 40,000.[ National numbers are even higher: Russia has 277,000 NGOs;[2India is estimated to have around 3.3 million NGOs in year 2009, which is one NGO per less than 400 Indians, and many times the number of primary schools and primary health centres in India.
Pixy Newspaper 11
Pixy Newspaper 11
Pixy Newspaper 11

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