Services

Home / Services

Trust, Society, Section 8 Company

Trust (Public Charitable Trust)

A Trust is the oldest form of non-profit structure, usually created when a property owner (Settlor) dedicates property or money for the benefit of others (Beneficiaries).

Registration: Governed by the State Trust Act (or the Indian Trusts Act, 1882). It requires a Trust Deed registered with the local Sub-Registrar.

Advantages

  • Simple to Start: Minimal compliance and very few "moving parts."
  • Low Cost: Registration fees are generally lower than the other two.
  • Total Control: The founder can maintain significant control over the management.

Disadvantages

  • Low Transparency: Since it is less regulated, it may be viewed with less trust by large international donors.
  • Difficulty in Amending: Changing the terms of a Trust Deed can be legally cumbersome.

Society

A Society is an association of individuals combined for a common goal (scientific, literary, or charitable). It is more "democratic" than a trust.

Registration: Governed by the Societies Registration Act, 1860. Requires a minimum of 7 members (in most regions) and a Memorandum of Association.

Advantages

  • Democratic Setup: Governance is managed by a managing committee elected by members.
  • Wide Recognition: A very common format for schools, clubs, and welfare associations.

Disadvantages

  • Internal Disputes: Because it is democratic, it is prone to "power struggles" among members.
  • Annual Filings: Requires filing a list of managing committee members every year with the Registrar.

Section 8 Company

This is a limited company formed for promoting commerce, art, science, sports, education, research, social welfare, or religion. It is "non-profit" because any profits made are reinvested into the company's goals.

Registration: Governed by the Companies Act, 2013. It is the most robust and sophisticated NPO structure.

Advantages

  • High Credibility: Viewed as the most reliable by government agencies, foreign donors, and corporate CSR wings.
  • Limited Liability: Members have no personal liability for the company's debts.
  • Better Governance: Strict compliance leads to transparent and professional management.

Disadvantages

  • High Compliance: Must follow all company law requirements (audits, board meetings, annual filings).
  • Expensive: Registration and annual maintenance costs are much higher than Trusts or Societies
 
     
281 Times Visited