Trust vs Society vs Section 8 Company
If you’re planning to start an NGO in India, you’ll quickly discover that one of the first decisions you need to make is:
👉 Should I register it as a Trust, Society, or Section 8 Company?
Each structure has its own benefits, legal rules, and use-cases. In this friendly guide by Green Vision Society, we’ll break down all three in simple terms — helping you choose the best fit for your mission.
📑 Table of Contents
- Why Choosing the Right Legal Structure Matters
- What is a Trust?
- What is a Society?
- What is a Section 8 Company?
- Detailed Comparison: Trust vs Society vs Section 8
- Which One Should You Choose?
- FAQs
- Conclusion
🙋 Why Choosing the Right Legal Structure Matters
Starting an NGO is not just about helping people — it’s also about building an organization that can:
- Legally raise funds
- Get recognized by donors and the government
- Apply for tax exemptions and grants
- Expand operations smoothly
The structure you choose will impact how your NGO operates, how many people are needed to start it, and how donations are handled.
📘 What is a Trust?
A Trust is one of the simplest and oldest forms of nonprofit in India. It’s governed by the Indian Trust Act, 1882 (or state laws).
✅ Key Features:
- Minimum 2 trustees required.
- Once created, a Trust cannot be easily modified.
- Suitable for charitable and religious work.
- Very easy to form and operate.
- Operates based on a Trust Deed.
Ideal for: Small to mid-sized NGOs working in local communities (e.g. feeding programs, schools, rural help, etc.)
📗 What is a Society?
A Society is a more democratic setup — registered under the Societies Registration Act, 1860. It needs at least 7 members from different states (for national level).
✅ Key Features:
- Requires a Memorandum of Association (MOA) and rules.
- More flexible and democratic (voting system).
- Popular for education, art, culture, and awareness NGOs.
- Must file annual returns to the Registrar.
Ideal for: NGOs involving multiple people, awareness campaigns, education drives, etc.
📘 What is a Section 8 Company?
A Section 8 Company is the most professional and credible NGO form, governed under the Companies Act, 2013. It is monitored by the Ministry of Corporate Affairs (MCA).
✅ Key Features:
- Minimum 2 directors (no upper limit).
- Highly recognized by donors, CSR funders, and foreign agencies.
- Requires financial and compliance reporting (like companies).
- Can receive foreign donations after FCRA registration.
Ideal for: NGOs focused on growth, funding, international partnerships, and national-level operations.
🔍 Detailed Comparison: Trust vs Society vs Section 8
| Feature | Trust | Society | Section 8 Company |
|---|---|---|---|
| Governing Law | Indian Trust Act | Societies Registration Act | Companies Act, 2013 |
| Members Needed | Min 2 | Min 7 | Min 2 Directors |
| Area of Operation | Local/National | Local/National | National/International |
| Flexibility | Low | Moderate | High |
| Compliance | Low | Moderate | High |
| Suitable for | Grassroots charity | Education, awareness | Professional NGOs, CSR |
| Can get CSR funding? | Rarely | Sometimes | Yes |
| Credibility | Medium | High | Very High |
| Foreign Funding (FCRA)? | With effort | With effort | Easier to get approval |
🤔 Which One Should You Choose?
✔ Choose a Trust if:-
- You want a simple, quick registration.
- You’re working in a small local area.
- You have fewer team members.
✔ Choose a Society if:-
- You have a strong group from different states.
- Your focus is awareness, education, culture.
- You want a semi-structured approach.
✔ Choose a Section 8 Company if:
- You want credibility, corporate funding, or foreign donations.
- You are planning to expand across India or globally.
- You are comfortable with professional accounting and compliance.
🙋 FAQs
Q1: Can I convert my Trust into a Section 8 Company later?
👉 No, conversions between structures are not straightforward. Choose carefully at the beginning.
Q2: Can NGOs make money?
👉 NGOs can generate income, but must use all profits for charitable purposes, not personal benefit.
Q3: Which structure gets the most donations?
👉 Section 8 Companies are most trusted by CSR donors and foreign funders.
Q4: Do I need a lawyer to register any of these?
👉 Not compulsory, but legal help is highly recommended especially for MOA, bylaws, or MCA filings.
📝 Conclusion
Choosing between a Trust, Society, or Section 8 Company depends on your NGO’s mission, vision, size, and funding goals. At Green Vision Society, we recommend you think long-term and choose the model that gives you the most support and flexibility for your growth.
📧 Email: support@greenvisionsociety.org
🌐 Website: www.greenvisionsociety.org
📞 Phone: +91-8011705086
💚 Green Vision Society – Supporting changemakers across India.
