Why Registration needed for an NGO
Why do you need to register your organization: At village level or even in urban areas interested people wants to take up some development activities in the area where they live and also support activities in other areas too.
This is initially done with contributions from members and other local people and organizations. At that time they may not have plans to form an organization, but over a period of time they may like to start an organization and get it registered.
Some people may ask why to register when the activities are running well even without the registration. The purpose of getting an organization registered are as follows:
When an individual or a number of individuals coming together and raising donations and start the work but there is no ownership. An individual may start and leave half- way and there may not be any accountability.
When one buys assets for the organization, they may be in individual names as the organization is not registered. However, when an organization is registered, all the assets will have to be in the organisation’s name.
Once registered, the organisation’s members will have to be bound by the rules and cannot act as they wish.
Even when one wish to open a bank account, the bank may ask the registration details alongwith the bye-laws of the organization.
To apply for funds either within the country the foremost thing that needs to be done is to get the organization registered.
To apply or tobe eligible to get funds from foreign donor agencies, they need to get either prior permission or permanent registration under Foreign Contribution Regulation Act. To apply for this FCRA registration, the ngo concerned must have been registered.
Even for applying for Income tax Registration under 12A, an organization must be a registered one.
A registered organization will have more credibility and funding agencies will be interested to support registered NGOs than individuals (it depends upon the funding agencies priorities and criteria).