In India registration of NGO (non-profit organizations)/public charitable organizations i.e. NG...
There are various organisations and institutions which have a sole mission to make the world a better place. Some organisations are set up by a group of individuals for serving the society, which can be a Non-Governmental Organisations or NGO and Non-Profit Organisations or NPO. Non-Governmental Organization (NGO) and Non-Profit Organisation (NPO) both functions to benefit the society and welfare of humans or improve the world. These institutions or organisations are not affiliated with the Government. NGO and NPO are quite similar to each other on the basis of their goals and initiatives that is the reason it gets difficult to analyse the difference between both of them.
An NGO or non-governmental organisation works for the public, social welfare and animal’s interest. This organisation is not affiliated with any government.
NPO is a non-profit organisation that works for the purpose other than the making of profits, but such organisations are incorporated under the Companies Act, 2013.
The rules, regulations and purpose of establishing an NGO and NPO are different. In this article, we shall cover the basic difference between an NGO and NPO.
The difference between NGO and NPO is explained in detail in the table given below:
|Formation||An NGO is formed by ordinary citizens that operate autonomously of government.||An NPO is an organisation which is formed to provide goods and services to people and also operates on the principle that no member will receive share profits or losses by the entity.|
|Registration||Registration of NGOs can be done under various acts and laws in different states: mainly under the Trust Act, Society Registration Act or Non-Profit Private Limited Company.||The Registration of NPO is done as per Section 8 of the Companies Act, 2013.|
|Area of Operation||NGO’s operate worldwide.It’s area of operation is very large.||NPO’s area of operation is limited.|
|Purpose||NGO’s works for the benefit of society and the economy of the country. It also brings awareness amongst the people regarding various issues like environment, health etc.||The basic purpose of an NPO establishing a company as a is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports, research.|
|Raising of Funds||NGO’s rely on donations, various other methods, processes, programmes, projects and activities for raising of funds.||An NPO uses its extra funds for the purpose of the organisation, rather than dividing it between its shareholders and the owners of the organisation NPO’s can raise funds through external commercial borrowings, foreign funds or the funds can be contributed by the members or directors.|
|Concept||NGO in India is much broader concept as it also covers an NPO.||NPO is a form of NGO.|
Also, Read: What are the Types of NGO Registration in India.
The following are the benefits of registering as an NGO and NPO in India:
NGO and NPO are both similar as well as different. However, they are working towards the greater good of society. In either way, the work they do is critical towards the society and without both types of organisations, many of the causes and efforts we support today would not exist. The only thing to keep in mind while registering an NGO or NPO is the motive of starting the organization. The primary difference lies in small details such as NPOs are exempted from tax, while NGO’s do not allow government representatives to become members of the organization.
See our recommendation: Difference Between Trust, Society and Section 8 Company.