PROFESSIONAL OPPORTUNITIES IN NON PROFIT ORGANISATIONS (NPOs) FOR CHARTERED ACCOUNTANTS. CA. Rajkumar S. Adukia B.Com ( Hons .), FCA, ACS, ACWA, LL.B, MBA, IFRS(UK ), DIPR, DLL & LW, Dip Criminology Mob: 098200 61049/093230 61049 E Mail: [email protected] . - PowerPoint PPT Presentation
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• Non profit organizations (NPOs) are organizations that use surplus revenues to achieve their goals rather than distributing them as profit or dividends.
• "NON-PROFIT" SECTOR - Sphere of social activity undertaken by organizations that are not for profit
• NPOs are also known as:– Not-for-Profit Organizations– Non-Governmental Organizations– Voluntary Organizations– Civil Society Organizations– Community Based Organizations– Charitable Organizations– Third Sector Organizations – Social Benefit Organizations– In Hindi - Seshcha Sevi Sangasthas/ Sanghatanas
• structure or management is not the essence of these organizations. It is their objectives that distinguish them from the business organizations.
• can be formed as - Any formal organization having a legal existence of its own with right to enter into contracts and transactions in its own name
• easier to carry conviction for a NPO in the below mentioned forms than any other forms:– Trust, by making a Trust deed– Society, under the Registrar of Societies– Registration as a section-8 Company under the Companies Act, 2013.– Non Trading Corporations– Autonomous Bodies
NPOs formed as Trusts• Trust is a relationship whereby property is held by one party for
the benefit of another• The India Trust Act, 1882 - Act to define and amend the law
relating to Private Trusts and Trustees. Thus this Act is not applicable to public trusts. The Public Trusts are governed by their respective state trusts acts. Eg.– The Maharashtra Public Trusts Act, 1950– The Rajasthan Public Trusts Act, 1959– The Tamil Nadu Public Trusts (Regulation of Administration of Agricultural
NPOs formed as Trusts• Applicability of Indian Trust Act, 1882
Even though it is designed for private trusts, in absence of any specific law for public trusts, courts have held that the principles & spirit of the Trusts Act would apply also for public trusts in India. (Sheikh Abdul Kayum and others v. Mulla Alibhai and others [ AIR 1963 SC 309]
NPOs formed as Companies• Section 8 of the Companies Act, 2013 - Companies with
charitable objects, etc• Companies that can be registered:
– That have their objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object
– Which intend to apply profits or other income in promoting their objects– which intend to prohibit the payment of any dividend to their members
• Are issued license by the central government allowing them to be registered as limited companies under this section without adding the words “Limited” to their name
NPOs formed as Non-Trading Corporations (NTCs)• Impart Non Trading activities for the benefit of its member,
without carrying commercial or profit making activities• Non-trading corporations (NTCs) appear under the entry 32 in
List II of the Seventh Schedule to the Constitution of India.• Monitored by Registrar, NTC, delegated to Sales Tax Department• A few acts related to NTCs can be listed as under:
– Maharashtra Non-Trading Corporations Act, 1959– The West Bengal Non-Trading Corporations Act, 1965 – The Orissa (Non-Trading) Companies Act, 1959
organization of workers pertaining to a particular trade, industry or a company and formed to promote and protect their interests and welfare by collective actionLegislation - Indian Trade Unions Act, 1926
• Political PartiesLegislation - Representation of the People Act, 1951
NPOs formed as Autonomous Bodies• Autonomous bodies are established by the Government to
discharge the activities which are related to governmental functions
• Although given autonomy to discharge their functions -Government’s control exists since these are funded by the Government of India
• mostly registered as societies under the Societies Registration Acts and in certain cases they have been set up as statutory institutions under the provisions contained in various Acts
Other forms for NPOs• right of all citizens to form associations or unions is guaranteed
by the Constitution of India, Article 19(1)(c)• Under Schedule VII of the Indian Constitution, the subject ‘Trust
and Trustees’ finds mention at Entry No.10 in the Concurrent List and ‘Charities & Charitable Institutions, Charitable and religious endowments and religious institutions’ find place at Entry No.28 of this list
• Thus both the Centre and the States are competent to legislate and regulate NPOs
• No comprehensive central law for legal incorporation of nonprofit organizations which applies to trusts, registered societies and section 8 companies alike
8. Arbitration & Conciliation- Drafting Arbitration Agreement- Representing either of the party (plainant/defendant) to the dispute in
the arbitral proceedings- Assisting Arbitrator in drafting arbitral award- Assisting to go to Court of Law- Assisting in preparing submissions to arbitrator- Acting as a member of Arbitral Tribunal- Acting as an arbitrator where required
1. Writing articles in NPO related magazines and other publications
2. Participating as speaker in conferences3. Communicating with people related to NPO activities4. Building a NPO information website5. Writing books on topics covered under NPOs6. Projecting oneself as an NPO Expert7. Reaching out to the prospective service receivers8. Using social media to reach more number of people related to
NPOs9. Increase expertise in the field of NPOs by undertaking capacity