Trust Registration

Basis	Section 8 Company	Trust	Society
Registration Document	MOA & AOA	Trust Deed	Bye-Laws (MOA & AOA)
Formation	Easy	Easy	Easy
Governing Legislation	Companies Act, 2013	Indian Trust Act, 1872	Societies Registration Act, 1860
Authority for Registration	Registrar of Companies	Sub-Registrar	Registrar of Society
Cost	Medium	Medium	High
Management Board	Board of Directors	Trustees	Governing Body
Meetings	Board of Directors	Board of Trustees	Governing Body & General Body meeting as per bye-laws
No. of Members Required	2	2	7
Compliance	Medium	Low	High
Online Filing	Online filing facility is available	N.A.	Online filing facility is not available. A Hard copy is to be submitted with the Registrar of Societies
Transparency	High	Low	Low
Voting Rights	As per Shareholding	Equal Rights to All Trustees	Equal Rights to All Members

What is Trust

As per sec 3 of Indian Trust Act 1882 define trust

An obligation annexed to the ownership of property

Arising out of confidence reposed in

Accepted by the owner or declare and accepted by him

For the benefit of another one or and the owner. Trust is that kind of entity which us formed by executing a trust deed.

Facts about trust

Private Trust

Public Trust

The Criterion for decide whether a particular trust is or is not of private nature is whether the said is or is not for the benefit of individuals where the intention of founder as shown by recital in his will, the property dedicated for benefit of idols, the trust is of a public nature and not for the benefit of individual members of family.

Advantages of Trust

Charitable trusts will not cease to function even if they have not been able to fulfill their initial goals. These trusts have what is known as cy pres, a provision that allows charitable trusts to change their beneficiary options if they are not able to meet the first one.
Charitable trusts can remain working perpetually, which is not the case with other organizations.
Charitable trusts are given permissions to establish themselves even if their beneficiary options do not seem to be quite concrete.
Tax exemptions under various provisions of Income tax Act.

Documents required for trust registration

Two passport size photos
Trustee’s Details
ID Proof
Property paper (Owned space)
Water bill or gas bill
ID proofs of witnesses

Section 8 Company NGO

The name of a company must end with word ‘Limited’, in case of public limited company and with the words ‘Private Limited’ in case of private limited company. But sec 8 permits the registration under a licence granted by central government of association not for profit with limited liability without adding the word ‘Limited’ or the word ‘Private limited’ to their name.

An association not for profit must satisfy two conditions

It is formed for promoting, commerce, science, art, religion, charity, sports, education, research, social welfare, protection of environment and other useful objects.

It does not intent to pay any dividend to its member but apply its profit or other income in the promotion of its object.

Additional Info

Sec 8 companies since working without motive of earning any profit, may be exempted for certain provision on of companies act 2013, which shall be prescribed by CG from time to time, pursuant to power conferred by sec 462 of companies act 2013. A companies which has been granted licence under sec 8 cannot alter any of provision of its memorandum as well as article of association except with the previous approval of Central Government. It may be noted that sec 8 company shall amalgamate only with another company registered under this section and having similar objects. Partnership firm become a member of sec 8 company.

Advantages of Section-8

Section 8 Companies do not require a minimum paid-up share capital like other companies.
Members of the company are only allotted a limited liability. Protection of personal assets in case of any discrepancy by the law is an advantage.
Numerous Tax exemptions are applicable.
The Central Government’s license offers greater credibility than NGOs, trusts and societies.
It is optional for the company to use suffixes such as Pvt.Ltd or Ltd.
No stamp duty during registration.
While taking registration under trust or society then promoters need to go at the office of the registrar along with witnesses but while incorporating a section 8 Company then in that case we just need to upload a form on the website of ministry that means registration of Section 8 company can be done online through the MCA portal.
Under Income tax act 1961, for the exemption of all the profits of Non-profit organizations we need to take certificate under Section 12AA and Section 80G which shall be easily granted to Section 8 Company as compared to Trust and Societies.
Section 8 company is more recognized in India for the purpose of Non-profit Organization as Compare to NGOs, Trust and Societies.
At the time of registration under Foreign Contribution (Regulation) Act to accept the foreign contribution from outside India then section 8 Company will easily get the registration as Compare to Trust and Societies.

Documents required for Registration of Section 8 Company

DSC of 2 directors
DIN of 2 directors
MOA & AOA of Company
Name approval of company
Share certificate
Company PAN or TAN

Sec 8 Company Registration Process

Taking digital signature of director in 1-2 days
Taking DIN in 1 day
Reservation name of company (0-3 days)
Application for Licence (10-15 days)
Preparation of other documents such as MOA and AOA form etc (0-1 days)
Filing of documents with authorities (0-1 days)

Registration under 12A: The Stepping Stone

The foremost thing for an NGO to do is to seek an exemption certificate, which is known as a 12A registration. Without this registration process for your NGO in India, the receipts would be entitled to normal tax rates and the beneficial exemptions available would evade you. It is also noteworthy that regardless of whether the NGO is constituted as a trust, society or a not-for-profit company (Section 8 Company), it will have to seek a 12A certification to avail tax exemption.

Registration under 80G: Benefits

One of the major registration processes for an NGO in India is receiving registration under 12A. Once that is done the major benefit is that you can seek to register under 80G of the Income Tax Act. The advantage NGO registration confers is that the donor (that is the person donating money) to the NGO will no longer be taxed for donating to your NGO. The donors can use this registration to reduce the amount they donate to an NGO from their total taxable incomes. The circular benefit of this registration would be threefold:

80G certification makes your NGO become a promising prospect and enhances the value of the organization and confidence of those associated with it.
It effectively enables a donor to not just feel good about making a donation for a cause but also reap the tax advantage of lowering taxable income associated with it. Well, who doesn’t like freebies?
Only an NGO registered under both 12A and 80G is eligible for availing government funding.
Getting an 80G registration also helps in seeking foreign contributions.

We can apply for registration under the above provisions after incorporation of the NGO. While the registration process may take a few months, it is a lifetime registration with no requirement for renewals.