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 and as papers in their lockers. Please don’t jump into NGO Registration only with your desires and willingness to do so without solid financial resource to run your organization. Instead, You shall join with other organizations and start to dedicate with your social service mind.
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| Difference | 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 Commissioner | Registrar of Societies – For Maharashtra Charity Commissioner | Registrar of Companies |
| Legislation Statute | Relevant state Trust Act – Bombay 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-amendment 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 Maharashtra. | 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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