Choose between society, trust and company

Comparative Table for Forms of Registration for NGOs in India
Description Society Trust Company
Act under which it is registered The Societies Registration Act, 1860 The Registration Act, 1908 The Companies Act, 1956
Objects Charitable, Literary, Scientific etc Charitable, socially beneficial Non profit activities
Main Documents Memorandum and Articles of Association, Rules and Regulations (Bylaws) Trust deed Memorandum and Articles of Association
Authority with whom to be registered Registrar of Societies of the concerned state Sub registrar of Registration at District level Registrar of Societies of the concerned state
Ease of Formation Relatively simple, it may take 12 months Very simple, it may take a week Relatively complicated, it may take 36 months
Approval of Name Separate application not required. Name is generally granted if available Not required Separate application is required to be made. There are strict guidelines for approval of name.
Stamp Duty No stamp paper required for Memorandum & Articles of Association Trust required to be executed on non judicial stamp paper (valued at 4% of the trust property) No stamp paper required for Memorandum & Articles of Association
Minimum no. of subscribers/trustees required 7(Seven) 2 (Two) 2 (Two)
Name Comparatively Simple Comparatively Simple Prior approval required from the Registrar of Companies in the relevant state/ U.T
Cost of Registration Less thanRs.10,000/ Less than Rs.10,000/ Less than Rs.25,000/
Governing Structure Two tier structure a) General body b) Board of Directors Single tier structure the trustees are the ultimate authority Two tier structure a) General body b) Board of Directors
Voting Rights All members have equal rights All trustees have equal rights The voting rights may vary on the basis of share holding. This provision can be used for control purposes
Types of activities allowed Not much of a difference between these 3 forms. Any kind of charitable & public utility activity can be undertaken Same Same
Annual Documents to be filed The Act requires a list of managing body to be filed every year. But different states have different requirements for filling additional documents every year No documents are filed every year. Annual return and audited required to be filed every year.
General & Board meetings General & Board meetings are required to be held as prescribed in the bye law of the society No provisions are laid down. Adequate rules should be framed in the trust deed, in this regard. Specific provisions have been laid down. At least 1 Annual General Meeting and Board meetings only once in six months but should have held four meetings in a year.
Transfer of Membership Membership is not transferable Membership is not transferable Membership can be transferred. Restriction on transfer can also be placed.
Payment to functionaries Permitted as per general body approval Provision in the trust deed should be there for any such payment Permitted as the general body approval
Recurring expenditure The statutory compliances required are minimal. Consequently recurring expenditure are also negligible No statutory recurring expenditure Annual returns & Balance Sheet are filed along with certain fees. Again the quantum ofexpenditure is not significant.
Area of operation Can operate throughout India even if registered in one particular state. No separate registration is required for operating in another state. Can operate throughout India Can operate throughout India as the registration is granted by the Central Government
Income Tax Registration Compulsory within 12 months of registration Same Same
Foreign Contribution Regulation Act, 2010 Registration or Prior Permission Compulsory for receiving foreign funds. Same Same
Labour & other relevant laws To be complied as per applicability. Same Same
Foreigner as a member/trustee Possible Same Same
Threat in having foreigner on board Difficulties may be faced in getting Foreign Contribution Regulation Act, 2010 registration. No other threat perceived. Same Same
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