If you’re looking to establish a Not-for-Profit Organization (NPO) or an NGO, you can choose from three common legal structures: Trust, Society, or Section 8 Company.
1. Trust Registration (Under the Indian Trusts Act, 1882)
Registration Process in Karnataka: > Draft a Trust Deed with a minimum of two trustees. > The trustees must be personally present at the Sub-Registrar Office for the deed’s registration. > After executing the Trust Deed, apply for the Trust PAN. Once issued, the trust can open a bank account and begin operations.
2. Society Registration (Under the State Society Registration Act)
Best for: Organizations aiming to promote art, education, culture, science, or social welfare.
Registration Process:
⇒ Draft the Memorandum of Association (MoA) and Bye-Laws.
⇒ A minimum of seven members must subscribe to the MoA and bye-laws.
⇒ Submit the application for registration to the Registrar of Societies under the applicable state laws.
3. Section 8 Company Registration (Under the Companies Act, 2013)
Best for: NGOs seeking corporate-style governance and transparency.
Key Features:
⇒ Section 8 Companies are similar to Private Limited Companies but are formed with the objective of promoting charitable causes.
⇒ The registration process includes filing the incorporation form (SPICe+), obtaining DIN and DSC for directors, name approval, and PAN/TAN allotment.
| Criteria | Trust | Society | Section 8 Company |
|---|---|---|---|
|
Governing Law |
Indian Trusts Act, 1882 |
Societies Registration Act, 1860 (or State Act) |
Companies Act, 2013
|
|
Purpose |
Charitable, Religious, or Public Welfare |
Art, Education, Culture, Social Welfare, etc. |
Promotion of Charity, Commerce, Education, etc.
|
|
Minimum Members Required |
Minimum 2 Trustees |
Minimum 7 Members |
Minimum 2 Directors and 2 Shareholders |
|
Legal Status |
Not a separate legal entity |
Not a separate legal entity |
Separate legal entity under the Companies Act
|
|
Registration Authority |
Sub-Registrar Office |
Registrar of Societies |
Registrar of Companies (ROC) |
|
Governance Structure |
Managed by Trustees |
Managed by Governing Body or Executive Committee |
Managed by Board of Directors |
|
Flexibility |
Less flexible due to rigid trustee control |
Moderate flexibility |
Highly structured and transparent
|
|
Compliance Requirements |
Low compliance (only basic requirements) |
Moderate compliance (annual filings, etc.) |
High compliance (annual filings, audits, etc.)
|
|
Tax Benefits |
Eligible for 12A and 80G tax exemptions |
Eligible for 12A and 80G tax exemptions |
Eligible for 12A, 80G, and CSR Funding
|
|
Legal Protection |
Personal liability of trustees |
Personal liability of members in some cases |
Limited liability of members and directors
|
|
Preferred by |
Small charities or religious organizations |
Medium-sized NGOs, clubs, and societies |
Larger NGOs seeking corporate-style governance
|
At Habco, we streamline the entire registration process for Trusts, Societies, and Section 8 Companies, ensuring compliance and making the process hassle-free. Let us help you turn your vision for social impact into reality!
Documents required for Trust Deed Registration
- Trust deed on stamp paper
- Two passport size photograph
- Self attested copy of PAN and ID proof
- Signature of settler on all pages of trust deed
- Proof of registered office address (Electricity Bill/Water bill etc)
- NOC from land owner with his identity proof
- Proof of property registered in the trust name
Documents Required for Society Registration
1. Application for Registration
⇒ Covering Letter requesting society registration, signed by all founding members
⇒ Application Form in the prescribed format
2. Memorandum of Association (MoA) (Mandatory)
⇒ Name of the Society
⇒ Registered Office Address
⇒ Objectives of the Society
⇒ Details of the Founding Members (at least 7 members for state-level, 8+ members for national-level)
⇒ Signatures of all members along with witnesses
3. Rules & Regulations of the Society
⇒ Governing structure & membership rules
⇒ Duties & powers of office bearers
⇒ Meeting & voting procedures
⇒ Rules for dissolution (if required)
4. Identity & Address Proof of Members (Any One)
⇒ PAN Card (Mandatory)
⇒ Aadhaar Card / Voter ID / Driving License / Passport
5. Registered Office Proof (Any One)
⇒ Electricity Bill / Water Bill / Telephone Bill (Not older than 2 months)
⇒ Rent Agreement + No Objection Certificate (NOC) from the landlord (if rented)
⇒ Property Ownership Document (if self-owned)
6. Affidavits & Declarations
⇒ Affidavit from the President/Secretary stating the society’s name is unique and not used by any other organization
⇒ No Objection Certificate (NOC) from the owner of the premises for using the address as the registered office.
7. List of Governing Body Members
⇒ Full Name, Address, and Occupation of all members
⇒ Designation (President, Secretary, Treasurer, etc.)
8. Additional Documents (As Per State Requirements)
⇒ Stamp Duty or Notarization (If required by the state government)
⇒ Letter of Authorization for legal representation
Documents Required for Section 8 Company Registration
1. Documents of Directors & Shareholders
⇒ Identity Proof (Any One)
• PAN Card (Mandatory)
• Passport (For Foreign Nationals)
⇒ Address Proof (Any One, Not Older Than 2 Months)
• Aadhaar Card
• Voter ID
• Driving License
• Passport
⇒ Residential Proof (Any One, Not Older Than 2 Months)
• Bank Statement
• Electricity Bill
• Telephone Bill
⇒ Email ID & Mobile Number of all directors
⇒ Passport-size Photographs of all directors
⇒ Digital Signature Certificate (DSC) of all directors (Required for online filing)
⇒ Director Identification Number (DIN) (Can be applied during registration)
2. Company Related Documents
⇒ Proposed Name of the Company (At least 2 name options for name approval via RUN service in MCA)
⇒ Memorandum of Association (MoA) – Defines the company’s objectives, specifically for charitable or non-profit purposes
⇒ Articles of Association (AoA) – Lays down rules & regulations governing the company
⇒ Declaration by Directors & Shareholders (INC-9 & DIR-2) – Self-declaration of compliance
⇒ Consent to Act as Director (DIR-2 Form)
⇒ Statement of Estimated Income & Expenditure for the next 3 years (Mandatory for Section 8 companies)
⇒ Declaration for Non-Profit Objectives – A declaration that the company will not distribute profits among members but will use them for the charitable purpose mentioned in MoA
⇒ Proof of Registered Office Address (Any One, Not Older Than 2 Months)
• Electricity Bill
• Telephone Bill
• Rent Agreement + NOC from Landlord (if rented)
• Property Tax Bill (if owned)
⇒ Proof of Business Address (If different from registered address)
⇒ Bank Account Proof (Once Company is Incorporated)
• Copy of bank statement or cancelled cheque in the company’s name