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A non-governmental organization (NGO), also called a nonprofit or not-for-profit, is formed as a corporation under the laws of the jurisdiction it considers its home base. The process of filing the paperwork to set up an NGO and establish its authority to operate is its official registration process. The specifics of this process differs in every jurisdiction, but there are certain commonalities that are true of the NGO registration process in most places. Once the organization is registered in its home jurisdiction, it must also file paperwork to register in every foreign jurisdiction in which it plans to operate.
Nonprofit corporations are corporations without a mandate to generate profits for shareholders. They are formed, or registered, in the same way as for-profit corporations, except there is typically a special section of a jurisdiction's business laws that deal specifically with nonprofits so the operating distinctions between the two types of corporations are made clear. As with a for-profit corporation, the first step in the NGO registration process is to incorporate.
Incorporation requires a business to file articles of incorporation with an authorizing jurisdiction. An NGO's articles must contain language that complies with the nonprofit laws, otherwise the entity will not be treated as a nonprofit by the government. Most jurisdictions require these articles to state its charitable purpose and to designate people, known as the board of directors, to be responsible for the entity, since there are no shareholders. NGO registration is complete once these articles are filed and accepted by the right government office in its local jurisdiction.
In many jurisdictions, nonprofits also benefit from tax-exempt status. Since they do not sell products to make a profit, governments often waive taxes on the income they do generate from public donations. Technically, obtaining tax-exempt status from a tax authority is not part of the entity's registration process, nor is it required of all NGOs. But most donors do consider tax-exempt status to be part of an NGO's official registration, since tax authorities regulate the nonprofit's financial matters. NGO registration with tax authorities is typically a matter of submitting an application with substantiating materials that prove the group's charitable purpose, public support and proper managerial oversight.
Nonprofits must also register with every jurisdiction where they plan to operate. This process is called foreign registration, and it is something all corporations must do, regardless of their status as for-profit or non-profit entities. Foreign NGO registration is usually accomplished by filing a application for authority to operate as a foreign entity with the same office that accepts new corporation registrations. If the office accepts the application, it issues a certificate of authority that proves the NGO is properly registered with the government and authorized to conduct activities.
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