Some organizations devote their money to the welfare of society. Collectively they are known as a non-profit organization. These include hospitals, schools, religious institutions, and NGOs online registration. The most common form of non-governmental organizations in India includes trusts, societies, and Section 8 companies.
They may be formed as a private or public institution, which is generally looked upon for the benefit of individual members or trustees. A private trust in India is generally governed under the Indian Trust Act 1882, while no separate legislation has been provided for the registration of public trusts.
To create a trust, one has to obtain a trust deed composed of the organization, specifying all the necessary details of the trust, including the members, an investment is made, policies are agreed upon, which all the members consent can be modified at any time. However, it is the simplest form of non-profit organization, as it does not require any regulatory complexities for annual accounts or governance filing.
Societies have developed in the modern era. In general, they can be formed with a minimum of 7 persons or more. In India, the societies are governed under the registration act 1860, which specifies the various statutory documents such as the MoU, AOA, and ROC to carry out the declaration of members legally as one society.
At intervals a society, the registrar must file the necessary documents and audited accounts. Although registration under the Act is not compulsory for a society, it is necessary to register a society under the Act to take advantage of legal principles and the right to hold sessions in court. A society can be considered the best form of a non-profit organization for people with state-level objectives.
Section 8 companies:
Section 8 companies registration have limited functionalities as compared to the social society functioning as an NPO. Section 8 companies are Ltd. companies established under the companies act, 2013. They are formed as a non-profit organization, which does not do any business for any profit or dividend income payable to its members.
Under the Companies Act, 2013, the formation of a Section 8 company registration is governed, it can be easily formed with at least two members either acting as shareholders or directors of the company or both.
Of all, Section 8 companies have far more complaints than trusts and societies. While the cost of registration and maintenance charges is much lower than section 8 company in the trust or society formation, they are generally ignored during the grant of several government schemes.
There is a very big difference between the registration of a public, a private, and a section 8 company. Therefore, it is recommended to go to the assistance of a professional compliance specialist for registration of a Section 8 company. Chartered Munshi as an NGO registration consultant is holding a team of financial experts to reduce your overall compliance efforts and speed up the entire registration process for you.