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Do you ever wish you could do good for the society at large? If so, you can consider opening a non-profit organization. There are various kinds of non-profit organizations in India such as trusts, societies and section 8 companies. You can choose any of them for the purpose of promoting social welfare, social development and other charitable reasons. In this article, we will shed some light on the difference between trust, society and section 8 company. By learning about these non-profit organizations and how they differ from each other, you can easily decide which one is right for you!
A trust is a business structure which is formed with the intention of promoting the development of literature, science or other noble causes. Trusts help to alleviate scarcity, provide education to children and offer medical assistance. All the trusts in India are registered under the Trusts Act 1882. Establishing a legally registered trust ensures legal validity and existence as a separate legal entity.
A society is an association of parties who fulfill a common purpose or serve a common mission jointly. Societies in India are registered under the Indian Societies Registration Act 1860. Such a purpose or mission can be related to development of any philanthropic, scholarly works or academic research.
A society’s incorporation requires a minimum of seven individuals to be associated. To acknowledge the association formally, an MoA (Memorandum of Association) is signed and then submitted to the RoC (Registrar of Companies). This way, a society gets legally registered. The MoA of the trust consists of the society’s name and its purpose.
A Section 8 company is a non-profit organization registered under the Companies Act 2013. The reason why it’s called the section 8 company is because it is registered under Section 8 of the Act. Section 8 company’s goal is to promote non-profit activities like social welfare, arts, sports, education, research, commerce, religion or environmental protection.
Prior to being established as a non-profit organization, the section 8 companies require approval and license from the Central Government. The income, donations and charities earned by a section 8 company must not be used for personal gain and must be spent on the promotion of prescribed objectives of the organization.
Let’s explore the key differences between trust, society and section 8 company using the table below:
The Trust, Society and Section 8 companies all are different forms of Non-Profit Organizations. All of them are set up with the intention of doing good for the society, and not for selfish gains. By opening a trust/society/section 8 company, you can help hundreds or maybe thousands of people. By going through this blog post, you must have learned the differences between trust vs society vs section 8 company. If you need assistance in opening an NGO in India, connect with Registrationwala. We’ll help you to file your NGO registration application with the concerned authority and help you to obtain the certificate of incorporation in a smooth and hassle-free manner.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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