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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

It means that the Company can earn profits but the promoters cannot be benefited out of those profits.

ThinkBiz Filings is an eminent business platform and a progressive concept, which helps end-to-end incorporation, compliance, advisory, and management consultancy services to clients in India and abroad. Incorporating a Section 8 Company (Non-Profit Organization) is easy, seamless, cheapest and quickest with ThinkBiz Filings! Apart from an NPO, ThinkBiz Filings also helps entrepreneurs with Private Limited Company Registration, Public Limited Company Registration, LLP Registration, HUF, One Person Company and Proprietorship Firm Registration easily. You may get in touch with our compliance manager on 09704561215or email info@Thinkbizfilings.com for free consultation.