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Difference between Trust, Society and Section 8

a group of young men standing next to each other .

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
DetailsTrustSocietySection 8 company
MeaningIt 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.
RegistrationAs an NGO/NPOAs an NGO/NPOAs an NGO / NPO, enjoying the privileges of a limited company, but without using the words “limited” or “private limited” in its name
Government lawThe 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 registerDeputy 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 ​​operationAll IndiaState-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 formationTrust deedRules and regulation and Memorandum of Association.Memorandum of Association and Articles of Association.
The legal title to the propertyLies in the hand of the trustee.Named after society.Named after the company
Cost factorLowMediumLow
Preference in case of Government grantNot much likedNot much likedPreferred mostly.
Registration under the Income Tax Act, 1961 Yes, allowedYes, allowedYes, allowed
Preference in case of FCRA registrationNot liked muchNot liked muchMostly preferred.
Many Annual compliance requirementsDepends 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. 

For more details related to the legal advice NGO registration process contact Chartered Munshi as an NGO registration consultant and get the best advice. 

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Swaraj

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