Non Profit Organization

Non Profit Organization

In India, you can register a Non-profit organization in three ways:

  1. Trust Registration
  2. Society Registration
  3. Section 8 Company Registration(NGO)

The type of registration you will need depends on the purpose you want to achieve. So, you should choose a model that suits your specific purpose

Note:  Society and Trust registration in India are different from business registration, the reason being societies, trusts, and NGOS have charitable objectives. On the other hand, a business works only for profit. Therefore, separate laws govern Society and Trust registration. The only exception is a Section 8 company which is governed by the Companies Act, 2013. These entities receive some special tax exemptions and benefits and these benefits are not available to commercial business set ups.

Procedure for Registration of Trust

A trust is a form of interest created in a property. This interest is created by one person for the benefit of another person. The interest in the property relates to its ownership

Trust registration procedure in India depends upon the type of trust. There are two types of trust:

  1. Public trust
  2. Private trust

Difference between a Public Trust and Private Trust

  1. Public trusts accept donations from the general public, but private trusts do not.
  2. Private trusts do not receive the tax benefits that public trusts receive
  3. Public trust is formed to benefit the public at large. Private trust is created for the benefit of one or more specific persons.

Difference between Society and Trust

  1. Society needs a minimum of seven members, trust needs two.
  2. Trusts don’t need a separate all-India registration, societies do.
  3. Voting system governs a society, but one person can control a trust.
  4. Amendments are easy in case of trusts, not so in the case of societies.
  5. Trust may be revoked with ease, but it is more difficult in the case of societies.
  6. A trust can have general objectives, but a society cannot. It needs to have specific objectives.
  7. It is possible to make a family member the trustee. But, it is usually not possible in case of societies.
  8. A trust works as per the trust deed. A society works as per its MoA and regulations.
  9. Moreover, the society may have any other purpose if the state law allows it.

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