Non-profit organizations play a crucial role in social welfare, but choosing the right legal structure is essential for long-term sustainability, compliance, and funding opportunities. Three of the most commonly used legal structures in India for charitable and non-profit activities are Section 8 Companies, Trusts, and NGOs (Societies).

This guide provides a detailed comparison of these entities based on legal status, registration process, governance, tax benefits, funding eligibility, and compliance requirements to help individuals and organizations make an informed decision.

1. Understanding Each Entity

A. What is a Section 8 Company?

A Section 8 Company is a non-profit company registered under the Companies Act, 2013, primarily for charitable, educational, social, environmental, or research-related objectives. Unlike regular companies, Section 8 Companies do not distribute profits among their members but reinvest them to promote their cause.

✅ Legal Status: Incorporated under the Companies Act, 2013
✅ Regulating Authority: Ministry of Corporate Affairs (MCA)
✅ Main Advantage: Higher credibility and greater access to funding than Trusts or Societies.

B. What is a Trust?

A Trust is a legal arrangement where the founder (settlor) transfers property or funds to trustees to manage for charitable or religious purposes. Trusts can be private (family-based) or public (charitable purpose).

✅ Legal Status: Governed by Indian Trusts Act, 1882 (Public Trusts may follow state laws)
✅ Regulating Authority: State Government (Registrar of Trusts)
✅ Main Advantage: Simple registration process and strong asset protection.

C. What is an NGO (Society)?

A Society is a group of individuals who come together to work for a charitable or social cause. Societies must have at least seven members to be registered. Unlike Section 8 Companies, Societies do not have a corporate legal structure but operate under the Societies Registration Act, 1860.

✅ Legal Status: Registered under the Societies Registration Act, 1860
✅ Regulating Authority: Registrar of Societies (State Government)
✅ Main Advantage: More flexibility in governance and operation.

2. Key Differences Between Section 8 Company, Trust, and NGO (Society)

3. Registration Process for Each Entity

A. Section 8 Company Registration Process

1. Obtain DSC & DIN for directors.
2. Reserve company name with MCA.
3. Draft MOA & AOA defining charitable objectives.
4. Apply for Section 8 Company License with the MCA.
5. File SPICe+ form for incorporation.
6. Obtain PAN, TAN, and open a bank account.
7. Register for 12A & 80G tax exemptions.

📌 Time Required: 30–45 days

B. Trust Registration Process

1. Draft a Trust Deed (includes objectives, trustee details, property details).
2. Submit deed to Registrar of Trusts along with ID proofs of trustees.
3. Obtain Trust Registration Certificate.
4. Apply for PAN, TAN & bank account.
5. Register under 12A & 80G for tax exemption.

📌 Time Required: 15–30 days

C. Society Registration Process

1. Draft Memorandum of Association (MOA) & Rules/Regulations.
2. Submit application to Registrar of Societies (signed by all members).
3. Obtain Certificate of Registration.
4. Apply for PAN, 12A & 80G benefits.

📌 Time Required: 30–45 days

4. Which One Should You Choose?

✅ Choose a Section 8 Company if:
✔️ You need high credibility for funding & CSR donations.
✔️ You require strict legal protection and structured governance.
✔️ You plan to scale operations at a national or international level.

✅ Choose a Trust if:
✔️ You are donating assets or property for charitable work.
✔️ You need minimal compliance and operational freedom.
✔️ You prefer long-term asset protection under trustees.

✅ Choose an NGO (Society) if:
✔️ You are a group of individuals with a common social cause.
✔️ You need a flexible governance structure.
✔️ You are working on community-driven projects.

5. Why Choose ASK ASSOCIATES for Registration & Compliance?

ASK ASSOCIATES makes registration & compliance easy for non-profits by offering:

✔️ Fast Registration (Section 8, Trust, or Society)
✔️ 12A & 80G Tax Exemptions Processing
✔️ FCRA Registration for Foreign Donations
✔️ Annual Filing & Audit Assistance

📞 Start your non-profit with expert guidance! Contact ASK ASSOCIATES today.