NGOs are non-profit organizations formed as corporations under the laws of their home jurisdiction. The registration process involves filing articles of incorporation and registering in all foreign jurisdictions where they plan to operate. Non-profit organizations benefit from tax-exempt status and must also register overseas.
A non-governmental organization (NGO), also called a not-for-profit or non-profit organization, is formed as a corporation under the laws of the jurisdiction it considers its home base. The process of completing the paperwork to establish an NGO and establishing its authority to operate is the official registration process. The specifics of this process differ across jurisdictions, but there are certain commonalities that hold true in the NGO registration process in most places. Once the organization is registered in its home jurisdiction, it must also file paperwork to register in all foreign jurisdictions in which it plans to operate.
Not-for-profit companies are companies with no mandate to generate profits for shareholders. They are formed or registered in the same way as for-profit companies, except that there is usually a special section of a jurisdiction’s business laws that specifically deals with non-profit organizations, so that operational distinctions between the two types of companies are clarified. . As with a for-profit corporation, the first step in the NGO registration process is to incorporate.
Incorporation requires a company to file articles of incorporation in an authorizing jurisdiction. An NGO’s articles must contain language that complies with non-profit laws, otherwise the entity will not be treated as a non-profit organization by the government. Most jurisdictions require these articles to state their charitable purpose and designate people, known as a board of directors, as responsible for the entity, since there are no shareholders. NGO registration is complete once these articles are filed and accepted by the appropriate government office in your local jurisdiction.
In many jurisdictions, non-profit organizations also benefit from tax-exempt status. Since they don’t sell products for profit, governments often waive taxes on income generated by public donations. Technically, obtaining tax-exempt status from a taxing authority is not part of the entity’s registration process, nor is it required of all NGOs. But most donors consider tax-exempt status to be part of an NGO’s official registration, as the tax authorities regulate the nonprofit’s financial affairs. Registering NGOs with the tax authorities is usually a matter of submitting an application with materials demonstrating the group’s charitable purpose, public support and proper management oversight.
Non-profit organizations must also register in all jurisdictions in which they plan to operate. This process is called overseas registration and is something all companies must do, regardless of their status as for-profit or not-for-profit entities. Foreign NGO registration is usually accomplished by filing an application with an authority to operate as a foreign entity at the same office that accepts new corporate registrations. If the office accepts the request, it issues a certificate of authority that proves the NGO is duly registered with the government and authorized to carry out activities.
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