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Knowledge Base for India NGOs

NGO registration: Difference between Trust, Society, Foundation.

NGO Registration and formation: It depends on the objects and purpose of NGO Registration. Here you shall find the difference between Trust, Society, Foundation and Nonprofit Company.

Let's have a real analysis about NGO Registration. Some people are thinking that without a base monetary resource if they do just NGO Registration then they can attain their goals and vision. It's a truth some people are registering NGO with a nice mood and several wound up or even left it in middle.

In case if you are an Individual or a group of 2 to 7 members, Before registering NGO just think over what is your actual monetary strength, and immovable assets to manage and maintain the NGO, though you have ocean wide mind to give others. If you are doing NGO Registration only with the mindset of getting grants and donation from external sources, then the sustainability of such NGO is a question mark.

If you are a company and if you are sure that your company shall allow a portion of the fund to charity regularly, then you can register an NGO with the better planning about its sustainability.

In India, several registered NGOs are only in the paper form and only 65% of NGOs are really working for the society. Some NGOs formed with a rocket speed and when they fail to get the project funds from Government schemes or contributions from local and outside countries, they got held up and even they forget about their own NGO. The legal entity and eligibility of such organizations are also a reason for the same.

Instead of searching for easy possibilities towards the formation of NGO, better analysis about what is the actual requirement for NGO Registration and what is the strength to form, how to manage and how to maintain such NGO is much important.

NGO Registration | Formation of Nonprofit:

Now let us look at the difference between NGO Types. That is the difference between trust, society, foundation and nonprofit company. Before the formation of a nonprofit or NGO, learn the difference between types of organizations in India. After your best analysis, you shall know how you can form a nonprofit organization with a perfect NGO Registration.

This page is only for the ideological purpose and for knowledge learning. It's a best practice to consult with your Lawyer, Auditor and professional towards NGO Registration.

Please be clear before starting a social organization. Several NGO organizations are sleeping only with certifications. If you do not have the solid financial resource to run your organization, please don't jump into NGO Registration, only with your desires and willingness to do for the society and public. Instead, You shall join with other organizations to dedicated your social service mind.

Difference between Trust, Society, and Non-Profit Company.

Differential Factors Trust Society Nonprofit Company
Basic Document Trust Deed - which contains objects of the trust (bye-law) Memorandum of Association Articles of Association with rules and regulations. Memorandum of Association Articles of Association
Formation Very Easy Simple Little Hard
Jurisdiction Deputy Registrar / Charity Commisioner Registrar of Societies - For Maharastra Charity Commissioner Registrar of Comapnies
Legislation Statute Relavent state Trust Act - Bompany Public Trust Act 1950 Societies Registration Act 1860 Indian Companies Act 1956
Objects Social benefits & Charitable Literary, Charitable, Scientific and resource oriented Nonprofit Activities
Re-ammendment or Modification of Objects Alteration can be undertaken only by the Founder or settler. If the founder deceased alteration of objects is impossible. Easy Legal Procedures Complicated Legal Procedures
Required Members Minimum = 2 Maximum = No limit Minimum = 7 Maximum = No limit Minimum = 7 Maximum = No limit
Registration As Trust with the Registrar. As Society with Society Registrar - Both as a society and a trust in some states like Maharastra. As per Companies Act under Section 25
Stamp Duty 4% or as applicable to current date % of Trust property Value will be executed in non judicial stamp paper with the registrar No stamp paper required for Memorandum of association, and rules and regulations. No Stamp paper required for Memorandum of association and articles of association.
Name Very easy to choose Very easy to choose Prior approval required from Registrar of Companies.
Management Board Trustees Governing Body Board of Directors & Management committee
Succession in Management By Election By Election By Appointment
Meetings No provisions Annual Meeting As per Law. Governing Body meeting as per the rules of Society. Quite Extensive as per the provision of Company Law
Legal Status Limited Legal Status Limited Legal Status Full Legal Status
Statutory Regulations Nominal Limited Maturable - Exhaustive
Membership Transfer Impossible Impossible Free or Control as per desire.
Member Admission Not applicable Governing Body Control General Body or Board Control through issue of Capital.
Dissolution or Take over by State Possible Possible Very risky and difficult
Payment to Members As notified in Trust deed Not restricted As approved by Company & State.

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