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 |
| Cost factor | Low | Medium | Low |
| 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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