All the 3 types of organizations registered in India such as- Society, Trust, and Section 8 Company are NGOs, that is, non-governmental organizations and also commonly known as NPOs (non-profit organizations). All these can be formed for social welfare and development. But they are not the same. There are some differences among them.
Comparison between Trust, Society, and Section 8 Company
|Details||Trust||Society||Section 8 company|
|Meaning||It is an agreement between the parties, under which one party owns the property for the benefit of the other party.||It is a collection of individuals, who come together for the beginning of any literary, scientific or charitable purpose.||It is an enterprise formed with a commercial, social, charitable or any other purpose and intends to apply its profits to promote such objectives.|
|Registration||As an NGO/NPO||As an NGO/NPO||As an NGO / NPO, enjoying the privileges of a limited company, but without using the words “limited” or “private limited” in its name|
|Government law||The Indian Trust Act for private trusts, 1882 and general law for public trusts, except in states like Gujarat, Maharashtra, where they have separate Public Trust Acts.||Society registration act 1860.||Company registration act 2013.|
|Right to register||Deputy Registrar of the respective field.||Registrar or Deputy Registrar of State Committees.||Registrar of Companies (ROC) or Regional Director.|
|Time of registration||The minimum number of members required is 2 trustees.||Minimum 2 members.||Minimum 2 directors and shareholders required. The same person can be a shareholder and a director too.|
|Geographical area of operation||All India||State-wise, but can operate/work in all over India after taking all India registration and becoming a national level society.||All India|
|Main documents supporting formation||Trust deed||Rules and regulation and Memorandum of Association.||Memorandum of Association and Articles of Association.|
|The legal title to the property||Lies in the hand of the trustee.||Named after society.||Named after the company|
|Preference in case of Government grant||Not much liked||Not much liked||Preferred mostly.|
|Registration under the Income Tax Act, 1961||Yes, allowed||Yes, allowed||Yes, allowed|
|Preference in case of FCRA registration||Not liked much||Not liked much||Mostly preferred.|
|Many Annual compliance requirements||Depends on whether the trust is a private trust or a public trust.||Annual filing of the list of names, occupations, and addresses of the members of the society’s managing committee with the registrar of the society.||With the Registrar of Companies (ROC), the annual compliance of the filing and filing of the annual returns of the Se 8 company.|
From the above comparison, we get an overview of the important points that need to be discussed before choosing from the appropriate type of organization.
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