Trust vs. Section 8 Company vs. Society Registration: A Comprehensive Guide

When setting up a non-profit organization in India, you have three main options: Trust, Section 8 Company, and Society. Each has its unique features, benefits, and requirements. This article explores these options, highlighting their benefits, the documents required, the registration process, and provides a comparison table to help you make an informed decision.

Benefits

Trust

1. Simple Registration Process: Trust registration is relatively straightforward and less bureaucratic.

2. Tax Benefits: Registered trusts can avail of various tax exemptions.

3. Perpetual Succession: Trusts have a continuous existence and can operate indefinitely.

4. Asset Protection: Assets held by a trust are protected and used only for the intended charitable purposes.

Section 8 Company

1. High Credibility: Section 8 companies are governed by the Companies Act, 2013, providing higher credibility.

2. Limited Liability: Members’ liability is limited to their shareholding.

3. Tax Benefits: Eligible for various tax exemptions under the Income Tax Act.

4. Perpetual Succession: Like trusts, Section 8 companies also have perpetual succession.

Society

1. Democratic Structure: Societies operate on a democratic basis, with elected members managing operations.

2. Tax Benefits: Societies can also avail of tax exemptions.

3. State-Level Registration: Societies are registered at the state level, allowing for local recognition.

4. Easy Management: Societies are easier to manage and operate due to their less stringent regulations compared to companies.

Documents Required

Here is the list of documents required for section 8 company, trust registration,society registration,

Trust

1. Trust Deed

2. Identity proof of trustees

3. Address proof of trustees

4. Passport-sized photographs of trustees

5. Proof of registered office address

Section 8 Company

1. Digital Signature Certificate (DSC) for directors

2. Director Identification Number (DIN) for directors

3. Memorandum of Association (MOA)

4. Articles of Association (AOA)

5. Proof of registered office address

6. Identity and address proof of directors

7. Passport-sized photographs of directors

Society

1. Memorandum of Association (MOA)

2. Rules and Regulations of the Society

3. Identity proof of members

4. Address proof of members

5. Passport-sized photographs of members

6. Proof of registered office address

Registration Process

You can check process of Society registration,trust and section 8 company

Trust

1. Prepare a Trust Deed: Draft a trust deed outlining the trust’s objectives, trustees’ details, and operational guidelines.

2. Register the Trust Deed: Submit the trust deed to the local registrar with necessary documents and fees.

3. Obtain Certificate: Upon verification, the registrar issues a registration certificate.

Section 8 Company

1. Obtain DSC and DIN: Acquire Digital Signature Certificates and Director Identification Numbers for the directors.

2. Name Approval: Apply for name approval through the Ministry of Corporate Affairs (MCA) portal.

3. Draft MOA and AOA: Prepare the Memorandum and Articles of Association.

4. File Incorporation Documents: Submit incorporation documents, including MOA, AOA, and other required forms, to the MCA.

5. Obtain Certificate: After verification, the MCA issues the Certificate of Incorporation.

Society

1. Prepare MOA and Rules: Draft the Memorandum of Association and Rules and Regulations of the society.

2. Submit Documents: Submit the MOA, Rules, and other required documents to the Registrar of Societies.

3. Verification and Registration: The Registrar verifies the documents and, upon satisfaction, issues a registration certificate.

Conclusion

Choosing the right legal structure for your non-profit organization is crucial and depends on various factors, including your objectives, the level of regulation you are comfortable with, and your long-term vision.

• Trusts are ideal for those seeking a straightforward setup with minimal regulatory interference.

• Section 8 Companies offer high credibility and are suitable for larger organizations looking for structured governance.

• Societies provide a democratic structure and are perfect for state-level operations.

Evaluate your specific needs and consult with legal experts to make the best decision for your organization.

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