Workshop on legal and financial compliance

A one-day workshop on “Legal Compliance and Financial Management” for NGOs was jointly organised by South Asia Governance & Compliance Center (SAGCC) in collaboration with Can Youth at Hotel Acacia, Dimapur, on August 19. The programme brought together representatives from various NGOs across Nagaland and Assam to strengthen institutional knowledge on financial systems and good governance practices.
Welcoming the participants, chief functionary of Can Youth, Jenpu Rhakho Rongmei, stressed the importance of building robust systems among grassroots organisations to ensure long-term sustainability and accountability. He also introduced and felicitated the resource person, Puran Jha, founder of SAGCC.
In the first session, Jha outlined seven key steps for effective financial management, including establishing clear financial policies, budgeting throughout the project cycle, maintaining robust accounting systems, internal controls, legal compliance, timely reporting, and independent audits. He emphasised that budgeting must be treated as a continuous process integral to project planning and execution.
The second session focused on documentation and legal registrations. Jha explained the three legal frameworks under which NGOs can register in India—Trusts, Societies, and Not-for-Profit Companies—and highlighted the importance of securing and renewing 12A and 80G certificates for income tax exemption.
Addressing queries on commercial activities, Jha clarified that NGOs cannot engage in profit-making ventures as their primary objective. However, incidental activities aligned with their charitable purpose are permissible, provided such income does not exceed 20% of the organisation’s total annual revenue, as per Section 2(15) of the Income Tax Act.
The final session dealt with compliance under the Foreign Contribution (Regulation) Act (FCRA), 2010. Jha urged organisations registered under FCRA to strictly adhere to reporting, utilisation, and governance norms to maintain transparency and credibility.
The workshop concluded with remarks from Rongmei, who encouraged NGOs to foster collaboration and networking for greater social impact. Participants expressed appreciation for the practical insights and clarity provided during the sessions. The initiative reinforced the message that legal compliance is not merely a statutory requirement but a cornerstone of credibility and sustainability in the nonprofit sector.