Difference in Company, Society and Trust
Difference between various Types of NGOs:
What is difference between Society, Trust and Non Profit Company, it is given here. All the forms as Trust, Society or Non Profit Company are known and classified as NGO. Society, Trust or Non Profit Company all are known and identified as NGO, only formation, registration and management processes are main difference. There are other differences given below. Those who want to form or run NGO can check and find that what kind of NGO formation they prefer. NGO can be formed in any type for social welfare and social development.
|Procedures, Rules and Requirements||Company||Society||Trust|
|Registration processes have the status of Non Profit Organisation (NGO) / Non Profit Organisation (NPO)||Non Profit Company is an NGO/ NPO.||Society is an NGO / NPO.||Trust is an NGO / NPO
There is no difference in the registration process in the status of NGO in any organisation registration process.
|Law/Act applied for to register NGO||Companies Act.||Societies Registration Act, 1860||Indian Trusts Act/ Bombay Public Trusts Act|
|Time takes to Form||
From 2 days to one week.
|Registering Authority||Registrar of Company.||Registrar or Deputy Reg. of Societies of the concerned State/ Charity Commissioner.||Sub-Registrar of Registration/ Charity Commissioner.|
|Issue of Name approval||Before registration name approval is required by application to ROC.||If any other NGO is not registered with the required Name in the particular jurisdiction of registration, then it is possible. And if any other Society (NGO) is registered with the name in that registrar then it can not be approved and provided.||Name approval is not required, if the name is not under Emblem Act.|
|The State Emblem of India (Prohibition of Improper Use) Act, 2005||Name cannot be approved if the name is restricted under the Emblem Act.||Name cannot be approved if the name is restricted under the Emblem Act.||The names restricted under the Emblem Act can be disapproved. But sometimes some Deputy Registrars and Readers refuse the other names which are not under the Emblem Act, just due to their personal and unofficial reasons, this is illegal they can not do it. If they do such actions, they can be legally challenged against their offensive and unauthorised actions.|
|Eligibility of Family Members to be Member of Organisation||Anybody can be the director of a Company. But certain Government Ministries/ Departments and funding agencies can refuse funding for the Company having same family members as directors.||Members of the same family can not be member in a Society.||There is no restriction in formation of a Trust with members of the same family.
But certain Government Ministries/ Departments and funding agencies can refuse funding to the Trusts those are having same family members as Trustee. So initially family members can be there to form NGO but at the time of funding from certain Ministries or Funding agencies the Trustees can be changed.
|Minimum Members/ Directors/ Trustees at state level Registration required||Minimum Two Directors.||Minimum Seven Members.||At least (Minimum) Two Trustees.|
|Minimum Members at National level required||Minimum Two Directors.||Minimum Eight Members from 8 different states are required in National level Society.||Minimum Two Trustees only, no limit of maximum Trustees/ Members.|
|Governing Structure||1. General Body of Directors.
2. Board of Directors.
|1. General Body.
2. Executive Committee.
|1. General Body/Board of Trustees.
2. Executive Committee.
Or Only one General Body of Trustees.
|Area of operation of NGO||Company can be operated throughout India. National validity is there as the registration is granted by the Central Government.||Society can be operated throughout India when registered as a National level society. When a society is registered in one State, area of operation will be in that state only.||Registration under Trust Act has national validity and can operate throughout India. Some certain terms, clauses and processes are applicable during registration and after registration.|
|Status for Rights of Vote and Power||Provision of the voting rights vary on the basis of share holding capacity of Directors.||All members of a society have equal rights in the General Body.||All Trustees have equal rights except the Settler, if there are any specific powers are provided. Authorised persons have different powers.|
|Can get funding. There is no difference to get funding in any of the NGO form.||Company can have funding possibilities.||Society can get funding if it is eligible according to the terms of the funding agencies or Government Ministries or departments.||Trust can get funding if it is eligible according to the certain terms of the funding agencies or Government Ministries or departments.|
|Annul Reports and other Documents to be submitted or filed apart from Income tax department||Company has to submit Annual Return and audited accounts at the financial year end.||According to the Section 4 of Societies Registration Act Annual list of managing body is to be filed every year. Resolutions are also submitted for approval in certain cases in certain states and in all or certain cases in some states.||No Annual report, resolution or any documents are required to be submitted or filed after registration of Trust to Registering authorities.
Only the General body and other executive committees or any sub committees have to maintain their own registers of meetings, resolutions, decisions and/or any other activities regarding decisions.
|General Body and Board meetings||In the Companies Act there are specific provisions of meetings. At least one Annual General Meeting and 4 Board meetings are required to be held every year.||General Body and Board meetings are required to be held as prescribed in the bye laws of the society. To follow the democratic pattern of society, regular meetings should be held for active societies.||No provisions exist to organise meetings. But to follow the democratic pattern of working of NGO registered under Trust Act, regular meetings should be organised for active Trusts. To organise meetings, adequate rules can be framed in the trust deed.|
|Transfer of Directorship/ Membership/ Trusteeship||Directorship can be transferred. Restriction on the transfer can also be placed.||Membership of Society is not transferable according to the Act.||There is no provision to transfer the Trusteeship in the Indian Trust Act.|
|Can use Foundation, Trust, Society, Samiti, NGO words with the name of organisation||Foundation, Samiti word can be used with the name.||Foundation, Samiti, Society, Organisation words can be used with the name of society.||In the name of Trust the words Foundation, Trust, Samiti, Society or any words can be used. No need to use Trust word along with the name during Trust registration.|
|Can a foreigner be a director/ member/ trustee||Foreigners can be directors.||A foreigner can be a member of society.||There is no restriction and provision to foreigners to be or not to be members. So foreigners can be members of a Trust.|
|If there is a foreigner in any NGO||There may be certain difficulties to get FCRA registration.||It is difficult to get FCRA registration if there is any foreigner member in a Society.||If there are any foreigner members in a Trust then it may not possible to get FCRA.|
|Provision of Recurring expenditure||Annual Returns and balance Sheet are filed with certain fees. Have to pay fee if there is any resolution to approve.||Negligible and minimum statutory compliances are required.||No statutory recurring expenditure after registration.|
|Eligible for School/ College Formation||Non Profit Company is eligible for School/ College formation except in certain States of India.||Society is eligible for School/ College formation in all States of India, including Rajasthan.||Trust is eligible for School/ College formation except in few certain States of India like Rajasthan. So if you want to form school/ college in those states you have to register a separate society and can run a Trust as an NGO for social development works.|
|Can members get Payment or can not||General body of Company can approve to get payment.||General body can permit and approve to get payment.||Trustee can not receive Payment but if there is a provision to get funds in the trust deed then Trustees can receive payment for project or if the Trustee is providing professional service or consultancy.|
So it must be clear that there can be any kind of NGO but status are equal as NGO.