NGO and INGO Law in Nepal

What are NGOs & INGOs?

Non-governmental organizations (NGOs) and international non-governmental organizations (INGOs) are considered to be independent corporate associations as per NGO and INGO Law in Nepal. NGOs are non-profit organizations that operate independently from the government to address social or community issues. They are typically formed by Nepali citizens and work at the local or national level. INGOs, on the other hand, are international organizations that carry out development work in Nepal but are based in other countries.

The legal framework governing NGOs and INGOs in Nepal aims to regulate their establishment, registration, and operations while enabling them to contribute to the country’s socio-economic development.

What are the Laws governing NGO & INGO in Nepal?

The primary laws regulating NGOs and INGOs in Nepal are:

1. Associations Registration Act, 1977
2. Social Welfare Act, 1992
3. Social Welfare Council Rules, 1992

Associations Registration Act, 1977

The Associations Registration Act of 1977 provides the legal basis for registering NGOs in Nepal:

• NGOs must register with the Chief District Officer’s office in the district where they are based
• At least 7 Nepali citizens are required to form an association
• Associations must submit their constitution, details of founding members, and objectives when registering
• Registered associations become corporate bodies with legal standing
• Associations must renew their registration annually
• The Act prohibits establishing or operating unregistered associations
• Local authorities can examine the accounts and activities of registered associations
• Authorities can suspend or dissolve associations for violating the Act or their own constitution

This Act establishes the basic framework for NGO registration and oversight in Nepal. It gives legal status to associations while allowing government monitoring of their activities.

Social Welfare Act, 1992

The Social Welfare Act of 1992 created the Social Welfare Council to coordinate NGO and INGO activities in Nepal:

• Establishes the Social Welfare Council as an autonomous body to promote social welfare activities
• Outlines the Council’s powers to approve foreign funding for NGOs/INGOs
• Requires INGOs to obtain approval from the Council before working in Nepal
• Mandates that NGOs affiliate with the Council to receive foreign funding
• Allows the Council to monitor and evaluate NGO/INGO activities and accounts
• Gives the Council authority to provide recommendations to the government on social welfare policy
• Outlines penalties for NGOs/INGOs violating the Act’s provisions

This Act centralized oversight of the NGO sector under the Social Welfare Council, particularly for organizations receiving foreign funding. It aimed to better coordinate NGO activities with national development priorities.

Social Welfare Council Rules, 1992

The Social Welfare Council Rules of 1992 provide more detailed procedures for implementing the Social Welfare Act:

• Outlines the Council’s organizational structure and meeting procedures
• Specifies requirements for NGO affiliation with the Council
• Details the process for INGOs to obtain work approval in Nepal
• Establishes procedures for NGOs to obtain approval for foreign-funded projects
• Mandates annual reporting of activities and finances to the Council
• Specifies penalties for non-compliance with the Rules
• Outlines the Council’s monitoring and evaluation procedures for NGO/INGO activities

These Rules provide the operational guidelines for NGO and INGO oversight by the Social Welfare Council. They establish the bureaucratic procedures organizations must follow to legally operate and receive foreign funding in Nepal.

Registration of Association in Nepal

Registering an association in Nepal involves the following key steps:

1. A group of at least 7 Nepali citizens must come together to form the association
2. The founders must draft a constitution for the association outlining its objectives, organizational structure, and operating procedures
3. An application for registration must be submitted to the Chief District Officer’s office in the district where the association will be based
4. The application must include:

• The proposed name of the association
• Objectives and work areas
• Names and details of founding members
• Constitution of the association
• Address of the association’s office

1. The Chief District Officer reviews the application and may request changes or clarifications
2. If approved, the association is registered and issued a certificate of registration
3. The registration must be renewed annually by submitting activity reports and audited financial statements

This registration process gives the association legal standing as a corporate body in Nepal. It allows the organization to open bank accounts, enter into contracts, and carry out its stated objectives as a recognized entity.

Association to be a Corporate Body

Once registered under the Associations Registration Act, an association becomes a corporate body with the following key attributes:

• It has perpetual succession, meaning it continues to exist regardless of changes in membership
• It can acquire, hold, and dispose of property in its own name
• It can enter into contracts and be a party to legal proceedings
• It has a separate legal identity from its members
• It can sue and be sued in its own name

This corporate status gives registered associations important legal rights and protections to carry out their work. It also subjects them to legal obligations and oversight from regulatory authorities.

Property of the Association

The Associations Registration Act contains provisions regarding the property of registered associations:

• All property acquired by the association belongs to the association as a corporate body, not individual members
• The association can own both movable and immovable property
• If any person misuses or misappropriates the association’s property, authorities can take action to recover it
• Upon dissolution of an association, its property devolves to the government after settling any debts
• The government assumes liabilities of a dissolved association only to the extent of assets received

These provisions aim to protect the property and assets of associations from misuse while ensuring proper disposition if an organization ceases to exist. They reinforce the separate legal identity of the association from its individual members.

Association Compliance & Procedures in Nepal

Registered associations in Nepal must follow certain compliance procedures to maintain their legal status:

1. Submission of Statements of Account

Associations are required to submit annual financial statements to the local authority, typically the Chief District Officer. These statements must include:

• Income and expenditure accounts
• Balance sheet
• Audit report from a registered auditor

Failure to submit these statements can result in fines for the association’s management committee members. This requirement aims to ensure financial transparency and accountability.

2. Examination of Account by Authority

The local authority has the power to examine the accounts of registered associations:

• An officer may be appointed to conduct the examination
• The association must provide all requested statements and documents
• The examining officer submits a report to the local authority
• If misuse of funds is found, action can be taken to recover losses
• Criminal cases may be filed for serious financial irregularities

This provision allows oversight of associations’ finances to prevent misuse of funds and ensure compliance with stated objectives. Associations must cooperate fully with any such examination.

Punishment for Violation of Rules of Association

The Associations Registration Act outlines penalties for violations:

• Operating an unregistered association: Fine up to 2000 rupees for management committee members
• Failure to submit financial statements: Fine up to 500 rupees for management committee members
• Non-cooperation with account examination: Fine up to 500 rupees for responsible officials
• Making unauthorized changes to objectives: Suspension or termination of registration

These penalties aim to ensure compliance with registration and reporting requirements. More serious violations can result in suspension or dissolution of the association by authorities.

Affiliation with the Social Welfare Council

1. Step 1: Submission of Application Form
2. Step 2: Submission of Required Details
3. Step 3: Payment of Prescribed Fees
4. Issuance of Certificate

NGOs and INGOs seeking to receive foreign funding must affiliate with the Social Welfare Council. The process involves:

Step 1: Submission of Application Form

Organizations must submit a prescribed application form to the Council expressing their intent to affiliate.

Step 2: Submission of Required Details

Along with the application, organizations must provide:

• Registration certificate
• Constitution/bylaws
• List of executive committee members
• Most recent audit report
• Annual program and budget

Step 3: Payment of Prescribed Fees

Affiliation requires payment of fees as determined by the Council.

Step 4: Issuance of Certificate

If approved, the Council issues an affiliation certificate valid for one year.

This affiliation is mandatory for NGOs to receive foreign funding and for INGOs to work in Nepal. It allows the Council to coordinate and monitor foreign-funded development activities.

Annual Compliance for NGOs & INGOs in Nepal

NGOs and INGOs must fulfill certain annual compliance requirements:

• Renew registration with local authorities (NGOs) or the Social Welfare Council (INGOs)
• Submit annual progress reports and audited financial statements
• Obtain approval for any new foreign-funded projects
• Report any changes in executive committee membership
• Comply with project agreements and stated objectives
• Allow monitoring visits by relevant authorities

Failure to meet these requirements can result in non-renewal of registration or affiliation, restricting an organization’s ability to operate legally in Nepal.

Read More:

• NGO Registration Process in Nepal
• INGO Registration in Nepal
• Renewal and Compliance of NGO and INGO in Nepal
• Profit Not Distributing Company Registration in Nepal
• NGO and INGO Lawyer and Legal Services in Nepal

Also Read: Social Welfare Council Act, 1992 Associations Registration Act, 1977

NGO/INGO Lawyers in Nepal

NGO and INGO Lawyers in Nepal, Prime Law Associates can provide assistance with the following in Nepal:

• Drafting constitutions and bylaws
• Navigating the registration and affiliation processes
• Ensuring compliance with relevant laws and regulations
• Advising on foreign funding procedures
• Handling any legal disputes or regulatory issues

FAQs

Contact NGO and INGO Lawyer in Nepal

Disclaimer: This material is presented solely for informational purposes, without constituting legal advice, counsel, or solicitation, and no liability shall arise from any actions, omissions, or reliance on its contents, directly or indirectly, in any manner whatsoever, irrespective of the jurisdiction or specific circumstances.