|Basis||Section 8 Company||Trust||Society|
|Registration Document||MOA & AOA||Trust Deed||Bye-Laws (MOA & AOA)|
|Governing Legislation||Companies Act, 2013||Indian Trust Act, 1872||Societies Registration Act, 1860|
|Authority for Registration||Registrar of Companies||Sub-Registrar||Registrar of Society|
|Management Board||Board of Directors||Trustees||Governing Body|
|Meetings||Board of Directors||Board of Trustees||Governing Body & General Body meeting as per bye-laws|
|No. of Members Required||2||2||7|
|Online Filing||Online filing facility is available||N.A.||Online filing facility is not available. A Hard copy is to be submitted with the Registrar of Societies|
|Voting Rights||As per Shareholding||Equal Rights to All Trustees||Equal Rights to All Members|
The Criterion for decide whether a particular trust is or is not of private nature is whether the said is or is not for the benefit of individuals where the intention of founder as shown by recital in his will, the property dedicated for benefit of idols, the trust is of a public nature and not for the benefit of individual members of family.
The name of a company must end with word ‘Limited’, in case of public limited company and with the words ‘Private Limited’ in case of private limited company. But sec 8 permits the registration under a licence granted by central government of association not for profit with limited liability without adding the word ‘Limited’ or the word ‘Private limited’ to their name.
Sec 8 companies since working without motive of earning any profit, may be exempted for certain provision on of companies act 2013, which shall be prescribed by CG from time to time, pursuant to power conferred by sec 462 of companies act 2013. A companies which has been granted licence under sec 8 cannot alter any of provision of its memorandum as well as article of association except with the previous approval of Central Government. It may be noted that sec 8 company shall amalgamate only with another company registered under this section and having similar objects. Partnership firm become a member of sec 8 company.
The foremost thing for an NGO to do is to seek an exemption certificate, which is known as a 12A registration. Without this registration process for your NGO in India, the receipts would be entitled to normal tax rates and the beneficial exemptions available would evade you. It is also noteworthy that regardless of whether the NGO is constituted as a trust, society or a not-for-profit company (Section 8 Company), it will have to seek a 12A certification to avail tax exemption.
One of the major registration processes for an NGO in India is receiving registration under 12A. Once that is done the major benefit is that you can seek to register under 80G of the Income Tax Act. The advantage NGO registration confers is that the donor (that is the person donating money) to the NGO will no longer be taxed for donating to your NGO. The donors can use this registration to reduce the amount they donate to an NGO from their total taxable incomes. The circular benefit of this registration would be threefold: