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In India, you can register a Non-profit organization in three ways:
The type of registration you will need depends on the purpose you want to achieve. So, you should choose a model that suits your specific purpose.
Please note that Society and Trust registration in India are different from business registration, the reason being societies, trusts, and NGOS have charitable objectives. On the other hand, a business works only for profit. Therefore, separate laws govern Society and Trust registration. The only exception is a Section 8 company which is governed by the Companies Act, 2013. These entities receive some special tax exemptions and benefits and these benefits are not available to commercial business set ups.
A trust is a form of interest created in a property. This interest is created by one person for the benefit of another person. The interest in the property relates to its ownership. For instance, a father wants his daughter to enjoy the benefits of his property. Now he can either become a trustee himself and can also appoint his friend as one. Now the trustee will manage the property and look after it. The daughter will be the beneficiary. She will receive all benefits arising from the property.
1.1 Trust Registration
Trust registration procedure in India depends upon the type of trust. There are two types of trust:
Both are governed by separate laws. Registration of Private Trusts takes place under the Indian Trusts Act, 1882. But, there is no separate act for public trusts and they are governed by their respective state laws. These state laws usually appoint a commissioner who administers and carries all trust activities in that state. One example of such state laws is Rajasthan Public Trusts Act, 1959. It appoints a Devasthan Commissioner for administering trust activities in Rajasthan.
1.2 Difference between a Public Trust and Private Trust
1.3 Validity of a Trust
Before proceeding to trust registration, you should know whether your trust is a valid trust. The state public trust laws do not state any essential ingredients of a valid trust. However, the Indian Trusts Act, 1882 which governs private trust states that a valid trust must:
1.4 Documents Required for Trust Registration
Following are the list of documents you need for trust registration:
1.5 Fees for Trust Registration
Trust registration fee depends upon the value of the property which is the subject-matter of trust. It is 1 % percent of the value of the property.
Please note that you need to pay stamp duty as well as the registration fee for registration of your trust.
1.6 Timeline for Trust Registration
On an average, trust registration takes anywhere between 3-6 months.
Society registration in India takes place under The Societies Registration Act, 1860. A society is an entity that works for promoting any of the below-mentioned activities or purposes.
2.1 Difference between Society and Trust
Societies work in a manner similar to trusts. That is why these two terms are often used interchangeably. However, both entities are different from each other. The Societies Registration Act, 1860 governs societies in India. On the other hand, private trusts come under the purview of Indian Trust Act, 1882. Apart from the governing acts, here are some more key differences between the two.
Moreover, the society may have any other purpose if the state law allows it.
2.3 Registering a Society
State governments manage society registration. Therefore, an application for society registration is sent to the appropriate state government. Appropriate state government means the government of the state where the registered office of the society is located. To register a society, you need to take the below steps.
2.4 Documents for Society Registration
2.5 Timeline for Society Registration
Society registration can take anywhere between 30-60 days.
A Section 8 company is a company with charitable objects and Section 8 of the Companies Act, 2013 governs its registration. This is why it is known as section 8 company. However, earlier section 25 of the Companies Act, 1956 governed the same. Therefore, it is still commonly known as Section 25 company.
3.1 Who Can Form a Section 8 Company
Anyone who is either:
may form a section 8 company.
3.2 Conditions for a Section 8
A section 8 company should make sure that:
Its aim is to promote a certain cause. This cause relates to:
If the company fulfills all these conditions, the Central government will issue it the license to carry business. Moreover, along with the license, it will also receive the benefit of not having to add private limited or limited after its name.
3.3 Features of a Section 8 Company
3.4 Documents for Registration of Section 8 Company
Before registering your company as a section 8/section 25 company, keep the below documents and details ready.
Moreover, an existing company also needs some extra documents such as:
3.5 Timeline for Registering a Section 8 Company
It usually takes around 20-30 days to register a section 8. But, this time period depends on the government processing time and therefore may vary further because of it.
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