Trust vs Society vs Section 8 Company: Choosing the Right NGO Structure

Anyone starting a non-profit in India must choose between three legal forms: a public charitable trust, a society, or a Section 8 company. All three can get income tax exemption and 80G approval, and all can apply for FCRA registration. But they differ in ways that matter for years.

Public Charitable Trust

A trust is created by a settlor through a trust deed, registered with the Sub-Registrar. Trustees manage it according to the deed. Some states, such as Maharashtra and Gujarat, have public trust laws with a Charity Commissioner; in others, including Telangana, registration of the deed is the main step, though state endowment laws can apply to some institutions.

• Pros: simple to set up, closely controlled, light compliance.
• Cons: less democratic governance; changing the deed can be hard; some institutional donors prefer other forms.

Society

A society is an association of at least seven people registered under the state's Societies Registration Act. Members elect a governing body.

• Pros: membership-based and democratic, well understood by government funders.
• Cons: annual state filings, possible control disputes between member groups, and rules that vary by state.

Section 8 Company

A Section 8 company is incorporated under the Companies Act, 2013 with a licence for charitable objects. Profits must be applied to its objects, and no dividends can be paid.

• Pros: strong governance and transparency, national recognition, often preferred for CSR and institutional funding.
• Cons: the heaviest compliance — board meetings, audits, MCA filings — and restrictions on changing objects without approval.

How to Choose

• Want close control and light compliance? Consider a trust.
• Building a membership organisation? Consider a society.
• Seeking CSR or large institutional funding? Consider a Section 8 company.

Getting Help

Think Filing advises on NGO structure and handles registration for trusts, societies and Section 8 companies.