Step-By-Step Guide to Register an NGO in Sri Lanka

Are you ready to make a difference in your community? Establishing a Non-Governmental Organisation (NGO) is one of the most powerful ways to create lasting, positive change. An NGO can be a massive undertaking, and the logistics and paperwork can be overwhelming.

Fortunately, we have created this complete step-by-step guide to registering an NGO in Sri Lanka — so you can focus on making your vision a reality. The collective expertise of our team has been instrumental in contributing significantly to the development of this article.

The process of setting up an NGO in Sri Lanka involves several stages of paperwork and procedures. To simplify matters, we have outlined everything you need to know in this guide. With our help and guidance, you can be sure that your NGO is set up correctly and in compliance with all applicable laws. Updated – July 2024

How do I qualify as an NGO in Sri Lanka?

To qualify as an NGO in Sri Lanka, you must meet certain criteria set out by the government. These include:

• The organization must have a specific and identifiable purpose or objective that is beneficial to society, such as promoting education, health, welfare, or environmental protection.
• The organization must not operate for profit, and any income generated must be used solely for the furtherance of its objectives.
• The organization must have a minimum of nine members who have subscribed to the organization’s constitution. 
• The organization must have a registered office address in Sri Lanka.
• The organization must have a set of rules or a constitution that outlines its objectives, goals, and structure.
• The organization must have a governing body or executive committee responsible for managing its affairs.
• The organization must be committed to transparency and accountability and must maintain accurate financial records and reports.
• The organization must comply with all applicable laws and regulations, including tax and employment laws.

Once you meet these criteria, you can apply to register your organization as an NGO with the Registrar of Companies in Sri Lanka.

Why should I register my NGO?

Registering your NGO provides several benefits, including:

• Legal recognition: Registering your NGO provides legal recognition and status, making it easier for you to operate and access resources.
• Credibility: Registration adds credibility to your organization, showing that it is a legitimate entity committed to its stated objectives.
• Tax exemption: Registered NGOs may be eligible for tax exemptions or other financial benefits, which can help reduce the operating costs of the organization.
• Ability to receive funding: Registered NGOs are eligible to apply for funding from government agencies, international organizations, and private foundations, which can help support their activities and programs.
• Better access to resources: Registered NGOs may have better access to resources such as office space, equipment, and training programs, which can help improve their capacity to deliver services.
• Increased accountability: Registration requires NGOs to maintain accurate financial records and reports, which helps to increase accountability and transparency.
• Ability to open bank accounts: Registered NGOs can open bank accounts in the name of the organization, which helps to separate personal and organizational finances.

Registering your NGO boosts sustainability, credibility, and impact while demonstrating your commitment to responsible, transparent operations, fostering trust and support from stakeholders.

How to Register an NGO in Sri Lanka?

There are two steps involved in registering an NGO in Sri Lanka:

1. Register your organization as a Company Limited by Guarantee (CLG)
2. Submit an application to register your company as an NGO.

What is a Company Limited by Guarantee?

A company limited by guarantee is a legal entity where members’ liability is restricted to a guaranteed contribution payable upon liquidation. Unlike shareholders, members do not own shares but support the company financially. This structure is typically used by non-profit organizations and similar entities focused on mission accomplishment, with surplus reinvested for the company’s objectives.

Step 1 – Incorporating a Company Limited by Guarantee

1. Reserve a company name: The first step is to reserve a company name with the Registrar of Companies. This can be done online through the Department of Registrar of Companies website.
2. Prepare the Memorandum and Articles of Association: The next step is to prepare the Memorandum and Articles of Association. These documents outline the purpose of the company and the rules governing its operation. It is advisable to seek legal advice to ensure the documents are properly prepared.
3. Prepare other required documents: Other documents required include Form 1 (Declaration of compliance with the requirements of the Companies Act), Form 18 (Consent and Certificate of Director), and Form 19 (Consent and Certificate of Secretary).
4. Submit the documents: Once the documents are prepared, they must be submitted to the Registrar of Companies along with the required fees. The Registrar will review the documents and issue a Certificate of Incorporation if everything is in order.
5. Obtain necessary approvals: Depending on the nature of the company, it may require additional approvals or licenses from other government agencies.
6. Register for taxes: After incorporation, the company must register for taxes with the Inland Revenue Department.

Step 2 – Apply to Register your NGO under your Company Limited by Guarantee

1. Determine the purpose of the NGO: The first step is to determine the purpose of the NGO and how it will be structured within the Company Limited by Guarantee. This includes deciding on the goals, objectives, and activities of the NGO.
2. Create a separate legal entity: The next step is to create a separate legal entity for the NGO within the Company Limited by Guarantee. This can be done by drafting a separate Memorandum and Articles of Association for the NGO.
3. Register the NGO: The NGO must be registered separately with the relevant government authorities, such as the Department of Social Services, the Ministry of Social Empowerment and Welfare, or other relevant agencies, depending on the nature of the NGO’s activities. 
4. Obtain necessary licenses and approvals: Depending on the nature of the NGO’s activities, it may require additional licenses and approvals from other government agencies, such as the Central Bank of Sri Lanka or the Department of Inland Revenue.
5. Comply with legal requirements: The NGO must comply with all legal requirements and regulations governing its activities, including filing annual reports and financial statements with the relevant authorities.

How long will the Registration process take?

The registration process for an NGO in Sri Lanka typically takes between 3-6 months. However, the actual duration may vary depending on several factors, including:

• Completeness of application: The application process involves submitting several documents, and any errors or omissions can delay the process. Therefore, it is crucial to ensure that all documents are complete and accurate before submitting them to the relevant authorities.
• Approval from other government agencies: Depending on the nature of the NGO’s activities, it may require approval from other government agencies, such as the Department of Social Services, Ministry of Social Empowerment and Welfare, or other relevant agencies. The time it takes to obtain approval from these agencies can vary, which can affect the overall duration of the registration process.

• Complexity of the NGO’s structure: The more complex the NGO’s structure, the longer it may take to register. For instance, if the NGO has multiple branches or operates in several regions, it may take longer to process.

• Backlog at the relevant government agency: The relevant government agency may have a backlog of applications to process, which can delay the registration process. This can be particularly true during peak periods when many NGOs are registering simultaneously.

What’s Next?

Never forget to double-check if the NGO’s management supports the nonprofit issues you work for.

It’s crucial to keep track of each financial transaction that occurs within your Organization. You can always employ an expert by outsourcing this job because it takes a certain level of accounting understanding.

• An audit functions as a non-biased inquiry into all the actions carried out by your Organization. It is an effective approach to demonstrate financial statement transparency.
• Filing tax returns: Not every activity your NGO does will require tax returns, but this is more of a case-by-case scenario.
• Filing annual returns: You are required to submit “annual returns” on an annual basis to demonstrate that your NGO is still active.
• Develop a fundraising plan: Determine how you will raise funds for your NGO. This can include grant applications, fundraising events, donations from individuals, and corporate sponsorships.
• Hire staff or volunteers: Depending on the size and scope of your NGO, you may need to hire staff or recruit volunteers to help with various tasks.
• Establish partnerships: You can partner with other NGOs, government agencies, and community organizations to help you achieve your goals.
• Develop an outreach plan: Develop a plan to reach out to potential beneficiaries and stakeholders. This can include conducting surveys, organizing public awareness campaigns, and networking with other organizations.

Remember that running an NGO requires hard work, commitment, and dedication. With proper planning and execution, your NGO can make a significant impact on society.