DIFFERENCE BETWEEN TRUST, SOCIETY & SECTION 8 COMPANY

S.
Basis of Difference Trust Society Section 8 Company
No.
1 Statute/Legislation Trusts governed by the Societies are governed by Section 8
Indian Trust Act, 1882. the Societies Registration Companies are
Act 1860, which is an all- governed by the
India Act. Many states, Indian Companies
however, have variants on Act, 2013.
the Act.
2 Jurisdiction The trusts are under the The power to register a The power to
jurisdiction of Deputy society lies in the hand of register a section 8
Registrar/Charity Registrar of societies Company lies in the
commissioner of the (charity commissioner in hand of Regional
relevant area. Maharashtra). Director & Registrar
of Companies of
concerned state.
3 Registration For Registration of For Registration of society For registration of
Document Trust main instrument main instrument is section 8Company
is Trust deed. Memorandum of main instrument is
Association and rules & Memorandum and
regulations. Articles of
Association.
4 Stamp Duty Trust deed to be No stamp duty required for No stamp duty
executed on non- memorandum of association required for
judicial stamp paper, and rules and regulations. memorandum and
vary from state to state. articles of
association.
5 Members Required At least two trustees Minimum: Minimum 2 for a
are required to register - Seven members are private company
a public charitable required for formation of and 7 for a public
trust. In general, state level society. ltd company.
Indian citizens serve as - Eight members required
trustees, although there from separate states for
is no prohibition formation of national level
against non-natural society.
legal persons or
foreigners serving in
this capacity.
6 Board of Trusts are governed by Societies are usually It is managed by the
Management their trustees or by managed by a governing board of directors.
board of trustees. council or managing
committee.
7 Legal Title Legal title of the In a society, all properties In section 8
property of a trust vests are held in the name of the Company, all
in the hands of society. properties are held
 trustees. in the name of
Company.
8 Revocable/ Indian public charitable Societies may be A section 8
Irrevocable trusts are generally dissolved. Dissolution must Company may be
irrevocable. be approved by at least dissolved.
three-fifths of the society's
members.
9 In case of If a trust becomes Upon dissolution, and after Upon dissolution
Inactiveness inactive due to the settlement of all debts and and after settlement
negligence of its liabilities, the funds and of all debts and
trustees, the Charity property of the society may liabilities, the funds
Commissioner may not be distributed among and property of the
take steps to revive the the members of the society. company may not
trust. Furthermore, if it Rather, the remaining funds be distributed
becomes too difficult to and property must be given among the members
carry out the objects of or transferred to some other of the company.
a trust, the doctrine of society, preferably one with Rather, the
cy pres, meaning "as similar objects as the remaining funds and
near as possible," may dissolved entity. property must be
be applied to change given or transferred
the objects of the trust. to some other
Thus, it appears that section 8 Company,
grantors can feel fairly preferably one
secure that the having similar
charitable nature of a objects as the
trust will be honored, dissolved entity.
even if the original,
specific purposes of the
trust cannot be carried
out.
10 Annual Compliance There is no Societies must file annually, There is requirement
requirement of annual with the Registrar of of annual
return filing. Societies, a list of the compliance by filing
names, addresses and of annual accounts
occupations of their and return of
managing committee company with the
members. RoC.
11 Online filing Online filing facility in Online filing facility is not Online facility is
facility not available. available. Everything has to available. The
Compliances are more be submitted in the office of Compliances, like
complicated & time Registrar of Societies in annual filing,
consuming hard copy. Compliances are appointment &
more complicated & time removal of
consuming. directors, shifting of
registered office,
 increase in capital,
change in object
clause & others can
be done online at
MCA portal. It is
very easy, time
saving and
transparent process.
12 Time Period 10-15 days 30-45 days 60-75 days
involved in
registration/
formation
13 Cost factor Low Medium High

14 Registration with At par with society & At par with trust & Section At par with trust &
Income Tax u/s. Section 8 Company. 8 Company. Society.
12A & 80G as NGO
15 From the point of Less preferred Less preferred Most preferred
view of Grant of
subsidy by the
government
16 From the point of Less preferred Less preferred Most preferred
view of Foreign
Contribution
Regulation Act,
(FCRA) registration
17 Transparency in Low Low High as everything
working is available online.
18 Change in board of Easy Complex Easy
directors/ trustees
Members
19 Change of Difficult Difficult Easy
Registered office