Complete Guide to 80G, 12AB, LLP, MSME, and Firm Registration in India

Introduction

For businesses and non-profit organizations in India, obtaining the right registrations is crucial for tax benefits, legal recognition, and operational efficiency. Whether you're running an NGO, a small business, or a partnership firm, proper registration helps in availing government incentives, tax exemptions, and credibility.

In this blog, we will discuss:
✅ 80G & 12AB Registration – Essential for NGOs to get tax exemptions and attract donors.
✅ LLP (Limited Liability Partnership) – A flexible business model with limited liability.
✅ MSME (Micro, Small, and Medium Enterprises) Registration – Government benefits for small businesses.
✅ Firm Registration – Legal recognition for partnerships and proprietorships.

Each section will explain eligibility, benefits, and the step-by-step registration process, ensuring a clear understanding of each concept.

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1. 80G & 12AB Registration for NGOs

Non-Governmental Organizations (NGOs), charitable trusts, and Section 8 companies rely on donations and grants for their operations. To encourage donations, the government provides tax exemptions under Section 80G, while Section 12AB ensures tax exemption on the NGO’s income.

What is 80G Registration?

80G registration allows donors to claim tax deductions on donations made to a registered NGO. This encourages philanthropy and makes fundraising easier for NGOs.

Eligibility for 80G Registration

✔ The NGO must be a registered trust, society, or Section 8 company.
✔ It should not be involved in commercial or profit-making activities.
✔ The organization must maintain proper financial records and audits.
✔ No funds should be used for personal gains.

Benefits of 80G Registration

✅ Donors can claim 50% to 100% tax deductions on donations.
✅ Helps NGOs attract CSR funding from corporates.
✅ Increases credibility and transparency, making fundraising easier.

How to Apply for 80G Registration?

1️⃣ Register the NGO under the Trusts Act, Societies Act, or Companies Act.
2️⃣ File Form 10A online through the Income Tax e-filing portal.
3️⃣ Submit required documents like PAN, MoA/AoA, audit reports, and activity details.
4️⃣ After verification, the approval is granted for 5 years.

What is 12AB Registration?

12AB registration is mandatory for all NGOs seeking tax exemptions on their income. Without 12AB approval, the NGO’s income is subject to tax.

Eligibility for 12AB Registration

✔ The NGO must be registered as a trust, society, or Section 8 company.
✔ It should conduct genuine charitable activities.
✔ Proper books of accounts and financial records must be maintained.

Benefits of 12AB Registration

✅ Complete tax exemption on NGO income.
✅ Enables NGOs to receive foreign and CSR funding.
✅ Improves transparency and accountability.

How to Apply for 12AB Registration?

1️⃣ Apply through Form 10A on the Income Tax portal.
2️⃣ Upload PAN, Trust Deed, and Audit Reports.
3️⃣ The Income Tax Department reviews and grants 5-year approval.

📌 Example: NGOs like Teach for India and Smile Foundation have 80G & 12AB registrations, making them eligible for tax-free donations.

2. LLP (Limited Liability Partnership) Registration

A Limited Liability Partnership (LLP) is a business structure that offers the flexibility of a partnership with the limited liability protection of a company. It is popular among law firms, consultants, and small businesses.

Features of LLP

✔ Requires at least 2 partners, with no maximum limit.
✔ Limited liability – Partners are not personally responsible for business debts.
✔ Less compliance than a private limited company.

Benefits of LLP

✅ Lower tax rates compared to companies.
✅ No mandatory audits unless turnover exceeds ₹40 lakh.
✅ Easier to manage with minimal documentation.

How to Register an LLP?

1️⃣ Obtain Digital Signature Certificate (DSC) for all partners.
2️⃣ Apply for Director Identification Number (DIN).
3️⃣ Reserve LLP name via RUN-LLP on MCA portal.
4️⃣ File Form FiLLiP for incorporation along with LLP Agreement.
5️⃣ Obtain Certificate of Incorporation and apply for PAN, GST, and MSME registration.

📌 Example: Many IT startups and legal consultancies operate as LLPs due to low compliance requirements.

3. MSME (Micro, Small, and Medium Enterprises) Registration

MSME registration is crucial for small and medium businesses to avail government benefits, including subsidies, loans, and tax incentives.

MSME Classification (Based on Investment & Turnover)

Category	Investment Limit	Turnover Limit
Micro	Up to ₹1 crore	Up to ₹5 crore
Small	Up to ₹10 crore	Up to ₹50 crore
Medium	Up to ₹50 crore	Up to ₹250 crore

Benefits of MSME Registration

✅ Easier access to bank loans at lower interest rates.
✅ Tax exemptions and rebates under Income Tax Act.
✅ Priority in government tenders and contracts.

How to Register an MSME?

1️⃣ Visit Udyam Registration Portal.
2️⃣ Provide Aadhaar, PAN, and business details.
3️⃣ Submit the application and receive the MSME Udyam Certificate.

📌 Example: Many small-scale manufacturers, traders, and service providers benefit from MSME status for easy financing and tax rebates.

4. Firm Registration in India

A firm can be a sole proprietorship, partnership, or LLP. Registering a firm provides legal recognition and access to business loans and government benefits.

Types of Firms

✔ Sole Proprietorship – Single-owner business.
✔ Partnership Firm – Owned by two or more partners.
✔ Limited Liability Partnership (LLP) – A partnership with limited liability.

Benefits of Firm Registration

✅ Provides legal protection.
✅ Allows access to bank loans and MSME benefits.
✅ Enhances credibility and business trustworthiness.

How to Register a Firm?

1️⃣ Choose a unique business name and obtain a PAN card.
2️⃣ Draft a Partnership Deed (for partnership firms).
3️⃣ Register with the Registrar of Firms (for partnerships).
4️⃣ Apply for GST, MSME, and necessary business licenses.

📌 Example: A local trading business, consultancy, or shop can be registered as a firm for legal recognition.

Comparison of Different Business Registrations

Registration Type	Best For	Tax Benefits	Compliance Level
80G & 12AB	NGOs & Charities	Yes	Moderate
LLP	Small businesses, law firms	No	Low
MSME	Small manufacturers & traders	Yes	Low
Firm	Sole traders & partnerships	No	Low

Conclusion

Choosing the right business or NGO structure depends on your goals, liability concerns, and tax benefits. 80G & 12AB help NGOs attract donations, while LLP and MSME registration support businesses with growth and compliance.

At NGO RC Tax Consultancy, we provide expert assistance in company registration, NGO tax exemptions, and business compliance. Need help with your registration? Contact us today! 🚀