India offers three main legal structures for forming a non-profit or charitable organization:
-
Section 8 Company registrationย (under Companies Act, 2013)
-
Trust (under Indian Trusts Act, 1882 or state trust acts)
-
Society (under Societies Registration Act, 1860)
Each has unique features, advantages, compliance requirements, and is suited for different types of activities.
๐ 1. Governing Law
| Type |
Governing Act |
| Section 8 Company |
Companies Act, 2013 |
| Trust |
Indian Trusts Act, 1882 (or State Act) |
| Society |
Societies Registration Act, 1860 (or State Act) |
๐ 2. Registration Authority
| Type |
Authority |
| Section 8 Company |
Registrar of Companies (ROC) |
| Trust |
Sub-Registrar (Revenue Department) |
| Society |
Registrar of Societies (State level) |
๐ฅ 3. Minimum Members Required
| Type |
Minimum Members |
| Section 8 Company |
2 Directors + 2 Shareholders (can be same people) |
| Trust |
Minimum 2 trustees (no upper limit) |
| Society |
Minimum 7 members (from 7 different states for national-level society) |
๐ฏ 4. Primary Objective
| Type |
Purpose |
| Section 8 Company |
Non-profit objectives (education, charity, environment, social welfare, etc.) with corporate-style structure |
| Trust |
Welfare-based activities (charity, education, health, etc.)โusually asset-based like land or donation |
| Society |
Promotion of literature, science, fine arts, and charitable activities through member-based decisions |
๐ 5. Legal Status & Recognition
| Type |
Legal Identity |
| Section 8 Company |
Distinct legal entity (like Pvt Ltd company) |
| Trust |
Not a distinct legal entity (trustees act on its behalf) |
| Society |
Separate legal identity but less structured than Section 8 Company |
๐ผ 6. Compliance & Regulation
| Type |
Compliance |
| Section 8 Company |
High (mandatory annual filings with MCA, audits, board meetings) |
| Trust |
Low to moderate (depends on state, annual accounts required if 12A/80G is claimed) |
| Society |
Moderate (annual filing of list of managing committee and activities) |
๐ฐ 7. Foreign Funding (FCRA eligibility)
| Type |
FCRA Registration |
| Section 8 Company |
Eligible after 3 years or via prior permission |
| Trust |
Eligible after 3 years (if registered under 12A & 80G) |
| Society |
Eligible but often scrutinized more by MHA |
๐ 8. Preferred For
| Type |
Best Use Case |
| Section 8 Company |
NGOs looking for funding, CSR, professional operations, structured governance |
| Trust |
Religious institutions, private charitable initiatives, family-run operations |
| Society |
Art, culture, sports, education promotion by group/community of members |
โ
Summary Table
| Criteria |
Section 8 Company |
Trust |
Society |
| Separate Legal Entity |
โ
Yes |
โ No |
โ
Yes |
| Corporate Governance |
โ
Strong |
โ Weak |
โ ๏ธ Moderate |
| CSR Funding Friendly |
โ
Highly |
โ ๏ธ Possible |
โ ๏ธ Moderate |
| Recommended For |
Large NGOs, CSR-backed orgs |
Land/donation-based charity |
Cultural, group-run orgs |
| Compliance Level |
๐บ High |
๐ป Low |
๐ธ Medium |
| Preferred by Donors |
โ
Yes |
โ Sometimes |
โ ๏ธ Depends |
๐ Conclusion
If you want to run a well-structured, compliant non-profit with access to CSR funding, FCRA, and long-term sustainabilityโSection 8 Company is the best choice.
If you want a simpler, donation or land-based setup with fewer regulations, a Trust might work better.
For community-based organizations focusing on art, culture, or education with a group of members, a Society is ideal.
