Non-Governmental Organisation a.k.a NGO’s are usually also referred to as Non-Profit Organisations. These organisations are generally formed to promote social welfare, social development and other charitable purposes.
In India, such an organisation may be established as a Trust, a Society or a Section 8 Company. Bear in mind that these are not the same. They have different purposes and uses depending upon what you intend to achieve through the establishment of the organisation.
In the table below we will bring out the differences between the three different forms of organisation.
|Section 8 Company
|It is considered to be the oldest form of charitable organisations. It is, in essence, an arrangement between parties whereby one party holds ownership over property on behalf of another person
|It is formed when a collection of people come together for a common charitable purpose. But it is not limited to charitable purposes but may extend to multiple other fields.
|It is a company established with the purpose has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object and whereby they apply any profits into furthering the objective.
|A trust is established under and governed by the Indian Trust Act, 1882 for private trusts. General law is applied for public trusts except in a few states such as Gujarat and Maharashtra, which have their own state laws.
|Societies Registration Act,1860.
|Companies Act, 2013
|NGO/NPO. But they enjoy all the privileges of a limited company without the need for them needing to add Pvt. Ltd. to the name.
|Document of constitution
|MOA (memorandum of association) and rules and regulations
|MOA and AOA (articles of association)
|Deputy Registrar of the state
|Registrar or Deputy Registrar of the particular state in which it is to be registered.
|Registrar of Companies (ROC) or Regional Director
|Minimum members required
|2 trustees minimum
|7 members minimum (5 for Jammu and Kashmir and Telangana)
|2 directors and 2 shareholders. It should be noted that the directors may also be the shareholders.
|There are no mandatory yearly compliance to be met by a trust
|The society must file the list of names, occupations and address of the managing committee members of the society to the Registrar annually
|The company must file the annual returns and accounts with the ROC.
|Grants and subsidies from the government
|Preference in registration under FCRA
|Registration under The Income Tax Act, 1961
|Legal right over the property
|Held by the trustee
|Held in the name of the society
|Held in the name of the company
|Registration period (approximately)
|Dependent upon the state stamp duty Act a well as the total worth of the property involved in the matter.
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