Introduction: The First and Most Important Decision for Starting an NGO
If you want to start an NGO (Non-Governmental Organization) in India, the first and most critical legal decision you’ll make is choosing the right structure.
There are three major legal formats for forming an NGO under Indian law:
- Trust (under Indian Trusts Act, 1882 or State Acts)
- Society (under Societies Registration Act, 1860 or State Societies Acts)
- Section 8 Company (under Companies Act, 2013)
Each structure has its own advantages, drawbacks, formation process, and regulatory authority. A wrong decision can create operational hurdles, compliance issues, and even restrict donor funding in the future.
In this article, we’ll help you understand:
- The full legal meaning of each structure
- Comparison of all three (with pros and cons)
- Which format suits what kind of NGO
- How RegistrationMART helps you legally register and run an NGO with full compliance
Let’s start with the legal backbone of each type.
Legal Foundation of Each NGO Type
| NGO Type | Governing Law | Regulating Authority |
|---|---|---|
| Trust | Indian Trusts Act, 1882 / State Trust Acts | Charity Commissioner |
| Society | Societies Registration Act, 1860 / State Amendments | Registrar of Societies |
| Section 8 Company | Companies Act, 2013 | Registrar of Companies (ROC), MCA |
What is a Trust?
A Trust is a legal arrangement where the settlor (founder) gives property to trustees to be held and used for a charitable or religious purpose.
Types of Trusts:
- Private Trusts – for specific individuals (governed by Indian Trusts Act)
- Public Charitable Trusts – for society at large (NGOs are registered as Public Charitable Trusts)
Key Features:
- At least 2 trustees required (recommended 3+)
- Formed via Trust Deed on non-judicial stamp paper
- Irrevocable after registration
- Suitable for small to medium-sized charities
- Regulated by Charity Commissioner (varies by state)
What is a Society?
A Society is a group of individuals who come together for non-profit activities in fields like education, health, art, science, etc.
Legal Reference:
- Societies Registration Act, 1860 (with state-specific amendments)
Key Features:
- Minimum 7 members, including 1 from a different state (for national level)
- Formed via Memorandum of Association (MOA) and Rules & Regulations
- Has democratic structure
- Annual meetings and elections are mandatory
- Suitable for larger membership-based organizations
What is a Section 8 Company?
A Section 8 Company is a non-profit company formed under the Companies Act, 2013 for charitable, religious, educational, or social purposes. It is the most professionally recognized and structured form of NGO in India.
Legal Backbone:
- Governed by Ministry of Corporate Affairs (MCA)
- Requires license under Section 8 of the Companies Act
Key Features:
- Minimum 2 Directors (Private) / 3 (Public)
- No minimum capital required
- Can receive foreign donations (FCRA) more easily
- Has higher compliance, but also strong legal credibility
- Suitable for large-scale operations and CSR collaborations
Side-by-Side Comparison: Trust vs Society vs Section 8 Company
| Feature | Trust | Society | Section 8 Company |
|---|---|---|---|
| Governing Law | Trust Act (State/1882) | Societies Act, 1860 | Companies Act, 2013 |
| Registration Authority | Charity Commissioner | Registrar of Societies | ROC (MCA) |
| Formation Document | Trust Deed | MOA + Rules | MOA + AOA |
| Minimum Members | 2 trustees | 7 (8 for national) | 2 (private) |
| All-India Operations | Yes | Yes (if 1 member from other state) | Yes |
| Legal Status | Not distinct from trustees | Separate entity | Separate legal entity |
| Compliance Level | Low | Medium | High |
| Audit Requirement | Not always mandatory | Yes, if registered under 12A | Yes (mandatory) |
| Annual Filings | Limited | With Society Registrar | With ROC (MCA) |
| Foreign Funding (FCRA) | Allowed if FCRA approved | Allowed | Easier & preferred |
| Corporate CSR Friendly | Moderate | Moderate | High |
| Cost of Registration | Low | Low–Medium | Medium–High |
| Modification of Structure | Difficult | Moderate | Easier through ROC |
Which NGO Structure is Best for You?
| Your Goal | Recommended Structure |
|---|---|
| You are an individual starting a small charitable trust | Trust |
| You are a group of professionals doing social work together | Society |
| You want a highly credible entity with legal structure like a company | Section 8 Company |
| You want to work with corporate CSR, get foreign funding, hire employees, run large projects | Section 8 Company |
| You want simple registration with minimal cost | Trust |
| You want regular democracy (elections, meetings) in your NGO | Society |
Registration Process Overview for Each Structure
Trust Registration
- Draft Trust Deed
- Get Trust Deed notarized/stamped
- Submit to Charity Commissioner
- Get Certificate of Registration
Processing Time: 10–20 days
Documents: Aadhaar, PAN, Address Proof, Electricity Bill
Society Registration
- Draft MOA + Rules
- File with State Registrar of Societies
- Submit affidavit, ID proof, NOC from premises
- Get Registration Certificate
Processing Time: 15–30 days
Documents: 7 members’ IDs, address proof, utility bill, NOC
Section 8 Company Registration
- Apply for DSC and DIN
- Reserve name via SPICe+
- Apply for Section 8 License (Form INC-12)
- File incorporation documents (Form INC-32)
- Certificate of Incorporation issued by ROC
Processing Time: 20–30 days
Documents: Director IDs, address proof, MOA, AOA, declaration
Additional Registrations to Obtain
| Registration | Purpose |
|---|---|
| PAN & TAN | Required for all entities |
| 12A | Tax exemption on income |
| 80G | Donor tax deduction |
| FCRA (if needed) | To receive foreign donations |
| GST (if applicable) | On services provided (like education) |
Note: RegistrationMART handles all registrations end-to-end.
Conclusion: Start Smart, Scale Sustainably
The decision between Trust, Society, and Section 8 Company isn’t just legal—it’s strategic.
- ✅ If you want minimal effort and fast launch – go with Trust
- ✅ If you are a collaborative, member-driven group – Society may suit
- ✅ If you aim for corporate credibility, fundraising, and scale – Section 8 Company is the best
Let RegistrationMART help you not just register, but structure your NGO for maximum legal clarity, donor trust, and compliance.
