Non-Profit Organisations or Non-Government Organisations, both are used in the same nature of particular purpose. These kinds of Organisations can be registered in India as Society under the Register of Societies or as a Trust by making a Trust Deed or as a Section 8 Company under the provisions of Companies Act, 2013.
As per the provisions laid down in the Societies Registration Act, 1860, the definition of Society defined as “it is basically charitable societies, military orphan funds or societies established at the several presidencies of India, mainly society is formed with the purpose of promoting science, culture, sports, literature, fine arts or other extra-curricular activities’ fields.
Society is regulated and governed under the provisions are laid down in the Societies Registration Act, 1860 which is the Federal Act, applicable through India but subject to ratification by the State.
When society is formed then the two documents are issued
- Memorandum of Association of Society (i.e. Charter of a Society) and
- Articles of Association of Society (i.e. Rules and Regulations of the Society).
Minimum 7 members are required to manage the Society’s day to day activities through distinguished position. However there is no upper limit to numbers of member of managing committee members.
Trust means doing something help for helpless section of the public through providing Land & Building. The wordings of Indian Trust Act, 1882 also contains that “a trust is an obligation annexed to the ownership of the property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner”.
Trust is regulated and governed under the provisions are laid down in the Indian Trust Act, 1882 which is the Federal Act, applicable through India but subject to ratification by the State, however, in case of State keeps silent laws about trust then the general principles of the Indian Trust Act, 1882 are applied.
When trust is formed then Trust Deed registered with respective Registrar of Trust which contains the aims and objects and mode of management of the trust. In every trust deed, the minimum and maximum number of trustees has to be specified. The trust deed should clearly spell out the aims and objects of the trust, how the trust should be managed, how other trustees may be appointed or removed, etc. The trust deed should be signed by both the settlor/s and trustee/s in the presence of two witnesses. The trust deed should be executed on non-judicial stamp paper, the value of which would depend on the valuation of the trust property.
Section 8 Company
Section 8 Company is a very wide concept of making non-profit Organisations and defined through such company registration act in India i.e. Companies Act, 2013. As per the provision of Companies Act, 2013, a Section 8 company can be established for promoting commerce, art, science, sports education, research, social welfare, religion, charity, protection of environment or any such other object.
A Section 8 Company is similar to a Trust or Society except a section 8 Company is registered Ministry of Corporate Affairs under the Government of India. Trusts and Societies are registered under State Government regulations. Section 8 companies have various advantages when compared to Trust or Society like improved recognition and better legal standing. Section 8 company also has higher credibility amongst donors, Government departments and other stakeholders.
The main instrument is a Memorandum and articles of association. A section-8 Company needs a minimum of two members; there is no upper limit to the number of members. The Board of Management is in the form of a Board of directors or managing committee and should preferably be Indian nationals.
Necessary documents to apply for Section 8 Company-
- Passport size photo of all directors of company
- PAN card copy, Voter ID, Adhar card, and Bank Statement of all directors of company
- Educational Qualifications of all member
- Rent Agreement copy along with NOC from Landlord and Electricity Bill
- Property Papers copy, if business owned by any director of the company