An overview of NGOs in India, their roles and responsibilities, and the distinctions between trust, society, and section

1. An overview of NGOs in India, their roles and responsibilities, and the distinctions between trust, society, and section 8 companies Introduction The formation of an organization for charitable purposes is considered a non-profit organization by the different authorities, and the registration of the same is possible in the form of an NGO, trust, society, or Section 8 company. These organizations is generally considered as Organisation for Charitable purposes as per the Income Tax act, section 2 (15) “Charitable purpose” includes the relief of the poor, education, yoga, medical assistance, Prevention of the Environment (inclusive watersheds, Forests, and wildlife) and the prevention of historical places, etc. It is necessary to verify the format in which it should be registered, the object and scope of its operations, and the individuals responsible for its formation. The funds being devoted to the welfare of non-profit organizations include those of schools, colleges, religious organizations (NGO’s), hospitals, and other institutions. NGOs are typically classified into eight types.

2. Roles and Functions of NGOs The NGO sector is growing quickly in order to help the less fortunate members of society, and in order to address issues like poverty and other social problems like illiteracy, the environment, and trade, NGOs work as agents for the advancement of the underprivileged. In addition to promoting and defending human rights, NGOs conduct extensive research and observations to support society's repressed ethics and values. NGOs work in a number of areas, including education, combating corruption, the environment, health, and children's rights, among others, and significantly improve social welfare and society's consultative role. If you want to start an NGO, trust, society, or Section 8 company, there are many advantages and government support available. For example, under the Income Tax Act, these organizations are exempt from paying taxes by receiving a Section 80G certificate, and the donor is entitled to a refund of any donations made through him to related NGOs. The Ministry of Home Affairs controls the possibility of receiving the advantages of a foreign contribution. The CAF can provide clarification on the materials falling under the suggested broad guidelines by consulting with legal and financial experts when making important legal and financial decisions or coming to a conclusion. The management of the elected body, consideration of the formation of the society, the family members operating the business, the desire for privacy in the activity, and the benefits of flexibility all favor trust registration. It is preferable to consider the creation of a Section 8 company when a variety of activities are being conducted. FORMATION OF TRUST For the benefit of a very small number of known individuals, trusts are classified as one type of charitable organization and are further divided into public and private trusts. The Indian Trust Act, of 1882 governs private trusts, while the Public Trust Act and the Indian Trust Act, of 1882 govern public trusts. In general, if someone wants to distribute their assets for the good of society, they might think about setting up a trust. It is necessary to create a trust deed, specify the goals, objectives, and management style, and have the settlers and trustee sign the deed in front of two witnesses in order to accomplish this. The document bearing the stamp must be used for the deed. Get in touch with the Corpseed Expert Team to learn more about the specific guidelines and compliance standards that must be met for the creation of the trust.

3. FORMATION OF SOCIETY The people must choose to follow the fundamental social norms because society is thought to be in a modern form. The Societies Registration Act, of 1860, is taken into consideration for the registration of the societies. There are a few specifications, such as the general body's requirement of seven members, who may be either Indians or foreigners. Additional members may also join the society, and each of them is given one vote. The memorandum of association and articles of association are primarily needed for the formation of societies, and they must be registered with the society registrar. Depending on the law that the State Legislature chooses, the governance varies from state to state. For businesses that operate best in states with an emphasis on fundamental formalities, the definition is simpler. Societies are regarded as being more difficult to establish than trusts, but they are simpler to establish than corporations. Contact the Corpseed Expert Team for comprehensive information and compliance requirements for the creation of societies. Formation of Section 8 Companies The Companies Act of 2013 establishes limited liability companies, and Section 8 of the company registration grants them an exclusive license. The following three requirements must be met for Section 8 companies to be formed, including: 1. For the purposes of the charitable trust, the companies must be formed. 2. The profits and income must contribute to meeting the objectives. 3. The members of such companies are not paid any dividends. The distinction between Trust, Society, and Section 8 Companies Grounds\Topic s Trust Society Section 8 Companies Governing Law/Act Indian trust act, 1882 or enforced act formulated by the state legislature. Societies are governed through the Societies Registration Act, 1860 The Companies act, 1956/2013 Members required for As least two members / no upper Any Seven or more members At least two members for a

4. Creation limit private limited company and seven members for public limited company Ownership Trustee Managing Council/Committee Board of Director Purpose of creation For the benefits of the poor section, educational purpose, and medical benefits, recreational purpose, or other general public utility. Associated for any Literary, Scientific or Charitable, Military orphan Fund, promotion of science, literature or fine arts, or for the diffusion of useful knowledge, library or reading room for general use, public museum or galleries, collection of history, Mechanical or philosophical inventions, instruments or design, purposes For the non-profit objective of trust, charity, Social welfare, commerce, art, Education, Religious, Environment Protection, etc. Form of Creation Through the registration of the trust deed and NOC from the owner of the property holder. Societies are formed through a Memorandum of Association and registration Through Form INC-1 and INC-12 for the grant of permission. INC-13 (MOA & AOA) And DSC authorization from the proposed Directors. Cost involved Lower cost Lower cost High The time period required in creation 10-15 days 30-45 days 60-75 days Dissolution Irrevocable unless mentioned in the trust At least three-fifths of the members of Through board resolution and

5. deed society are required for the dissolution. surrendering of license Conclusion Formation of an NGO, Trust, Society, or Section 8 Company is one of the great businesses in the public interest. If you're interested in starting one of these entities, the fundamental requirements must be understood. Consult the Expert Team of Corpseed for detailed information regarding the formation and compliances necessary for the same.