Recently I had written about how to register a trust and the process of registering a society in India. I have written several articles on the subject of NGOs in India. Today, I though that I should present a summary of differences between trust and society. These two are the main types of non profit organizations in India. Often people ask “Trust or Society, which is better?”. There is no universal answer to this question. Both society and trust have their own benefits and drawbacks. You should spend some time considering both these options. The following comparison table should help you in deciding which is better for your circumstances and objectives.
Social work is important for a better society.
NGO: Frequently Asked Questions
| Basis of Difference | Trust | Society |
| Statute/Legislation | Private trusts are governed by Indian Trust Act, 1882. Public charitable trusts do not have a national level governing law. | Societies Registration Act, 1860 |
| Minimum number of members | Two | Seven |
| Geographical area of activities | All India (no need to mention this in the Trust Deed) | A separate registration for All India level is required (8 members from different states required) |
| Nature of control | One man control, i.e. Settler | Democratic system. Decisions are made by voting. Power struggle may ensue. |
| Amendments | Can easily be done via a supplementary trust deed | Relatively more difficult. Both Memorandum of Association and Rules and Regulations need to be changed |
| Names | Easily available | A bit difficult to get the desired name |
| Bank a/c operation | Controlled by one person, Settler | Two persons, either President or Secretary and Treasurer |
| Office holders’ tenure | Trustees generally hold office for the whole life | Members hold office for a period of time and may stand for re-election |
| Winding-up | Trust is generally irrevocable, Can not be wound-up. | Can be wound up if 3/5th of the members so desire |
| Family members | Can become trustees | Registrar objects on family members becoming part of the Governing Body |
| Governed by | Board of Trustees | Governing Body |
| Main documents |
|
|
| Objectives | Can be general | Have to be specific |
SEE ALSO: Can an NRI Become a Trustee?
SEE ALSO: Can a government employee become a Trustee?
Some people also gets confused about a trust and a foundation. I have written a separate article to answer this question.
I hope this table of differences would make several things clear in your mind about differences among Trust and Society. For more specific information you may read more articles as listed below. In case you still have any questions, please ask them in through the comments section. While asking questions, please write in details. Also, please do not ask questions without going through all my relevant articles. You will find most of your answers in one or the other articles. Thank you for using TechWelkin!
Dear Lalit,
Is it possible to convert a trust into a society?
I don’t think it is possible to convert a trust into a society or vice versa.
A few Telugu friends residing in Noida ( NCR) opened a Bank account in the name & title ” NOIDA TELUGU SEVA SAMITHI, NOIDA” in year 2013 and carrying out socio-cultural activities with the donations collected from like minded people; mostly Telugu people. We have so far not registered and so haven’t got PAN card. Bank deducts 20% tax on FDs taken with surplus.
We want to register as Trust for simple reason of convenience and obtain PAN & eligibility to receive donations under 80 (G). We intend to have 7/8 trustees.
Can we have trust deed to make it democratic of equal rights to all members?
Yes you can make such provisions in the trust deed.
Indian Red Cross Society was formed by Indian Red Cross Society Act 1920. National Head Quarter, State Branches, District Branches governed by this act. To collect donations from peoples registration under Public Trust Act and / or Society Act is required. The commissioner of Income Tax has issued letter to IRCS to register each branch seperately under Trust/Society Act. one branch was registered in 1952 under Bombay Public Trust Act 1950 , there is no any record with Charity Commissioner office except certificate and trust deed. Trustees at that time were no more now… there is 64 years span.. in which no change report has given… How can we continue this trust… activity of trust is still running by other members…
Hello Mr. Lalit…. Thanks for your information. I would like to get some clarification. we, a group of 6 friends, are contributing a fixed amount monthly with the objective of investment in some profitable activity, so as to procure some assets in the future that is common to all the members. This is completely for the future financial benefits to the members with no plans for any charity. In this case, pls suggest me under which category our group can be registered (trust/society/foundation/or any other), so as to make all the monetary transactions legal. Thank You….
I can not give you any opinion because this article is about public charity. If your purpose is to make profit, you should consult a lawyer to know how to go ahead.
Hi Lalit Sir,
I am an NRI,Me and my like minded friends have started a small organization for NRIs in our village.We are trying to register as a society ,do some business and spend 60 percent of the profit for charity and 40 percent for the members.But when we submitted the bylaw for registration, they said from collectrate that if it registered as society you can not draw profit out from that.Anyway we are going ahead as charitable society. But still we have the plan to do business. We are in a confusion now.Could you please suggest an option for us to do business and charity and give some profit to our members?
Thank you
You can not take any profit from a charitable society or trust. Your main motive is business -so you should register a company. Also register a trust or society. Do business through you company and donate 60% of profit to the trust/society so that it can do charity work.
Hello Mr. Lalit
Is it possible for a particular association to get registration under Trust which is already registered as Society under The Societies Registration Act
I don’t think so.
Can a government officer/bank employee/lawyer form a non-government organization, welfare society, or trust in India during his service?
Read our article on this topic.
Dear Lalit ji, I have one small question. Can I use ‘Trust’ word in my NGO’s name while registering as society?
Hi Atul, I don’t think there is any problem in that.
Hi Lalit
Can I register a trust on my share of property/home if civil case is going in the court among shareholders of that property?
Regards
A lawyer can answer this question better. But I guess it is not advisable to register a trust office on a disputed piece of property.
Thank you Lalit. I think you are doing a good job to work for the interest of many needy future trustees and social workers. Best wishes for having a nice cause for many causes. God help us to make our planet worth leaving. Regards
God bless u lalit
Dear Lalit
Thanks a lot for such an excellent article on the difference. I read your other articles too about registration of trust and society. They are extremely useful. I have a query. We are a group of friends planning to contribute a monthly amount and donate that amount to less privileged orphanages/homes. To avoid any tax implications to an individual’s bank account we are planning to register a trust or society to do this. My friends are located across India. Can you please advise what is the recommended option here ? Or do we need to register at all to do this kind of donation?
Well, it is recommended that you either register a trust or society for this purpose. There is no “recommended option” as to whether you should register a trust or a society. It depends on your organizational needs. In both cases you will open a bank account, apply for a PAN, apply for 80g and 12a. This will save you from paying Income Tax as you will not be directly receiving money as an individual. As an individual, you should not accept monetary donations but if you do -then you will have to pay Income Tax on the donations received -even if you use the donations for charitable purpose.
Dear Lalit, thanks very much for this information. For long time I was in search of such an article providing clear information.
Can a trustee earn in any form if he has no other occupation other than running school as a trustee
A trustee can not take anything from trust fund just because he/she is a trustee. But if the trustee is doing some professional work for the trust, then he/she can take a reasonable reimbursement.
Dear lalit can we use Foundation word with the name of society
Yes you can. There should not be any problem in using the word Foundation in the name of a society.
Hello Lalith,
Firstly appreciate your help to her everyone here.
I have an educational society registered in 2010. Since then there are no activities conducted on this society due to various reasons. Now that we wanted to start, we wanted to apply for 80G for the registered society. Please help me with all what is required for getting 80G for our society.
Also, the society is registered in Andhra Pradesh before its bifurcation. We are helping 4 students with their education in the bifurcated state Telangana. Can we continue on the same society or should we register one more in the new state. Please help with your knowledge.
Regards,
Jay
Hi Jay, I am not sure about how bifurcation of Andhra Pradesh has affected your soceity’s ability to work in Telangana. You should contact the registrar of societies for this. As for 80G exemption certificate, I have an article on that. You can read it.
We, five friends together, have decided to contribute some funds out of our salary per month that we want to spend on education for deprived children who have not gone to school or left it incomplete. We don’t want to open any office for it but there is a need of a bank a/c for it. Is it mandatory to name our group? Please let me know the procedure to have bank a/c open with a bank. And also do we need to have trust deed.
Hi Rajeev, you should go to the bank of your choice and ask them about how to open an account. May be you and your friends can open a joint bank account and that’s it. If that suffice your purpose, you would not need to register an NGO.
Dear Lalit Sir,
I have gone thru all of the above. Can u guide me one question. Suppose five friends have made one trust and after some years they want to make individual trusts, then the original trust fund and property etc can it be divided equally among them i.e. in the name of their individual trusts.
pl guide.
rabi dash
No, this is not so straightforward! The funds that you collected were given to you to carry out a certain social work. If your trust deed allows, you may donate your trust funds to the other trusts with similar objectives but you can not just divide the funds like you said.
Great work brother… I, truly appreciate your research and information and thanks for sharing the same.
Regards: Adv. Jai Agarwal
Dear Lalit Sir, Why the registration for society is so complicated and tough compared to Trust which is easily done though , in my opinion, both trust and society are enjoying almost equal powers . Why then people opt for society registration and not trust.
Durga Prasad ji, people opt for a Society when they want to have a democratic structure. That is the main reason behind making a society.
We need to take a PAN in the name of the Registered Society. What should be the status of the applicant: Trust / Association of Persons OR Body of Individual
Trust / Association of Persons
Dear Sir,
Is it possible to get an NGO registered both as a Trust and as a Society? If Yes, then would it be better to get it registered as a Trust first and then go for the Society? If NO, then why?
You can not register an NGO both as a trust and as a society. The reason is because there is no need to do so!
A registered public charitable trust wants to sell utility articles to public at large for which registration under vat/cst etc.are required. However proceeds out of this selling activity will not be distributed among trustees but will be treated as receipts and used for further welfare. Can the trust do so and accordingly how should the deed be altered so as not to invalidate the nature of its existence.
A trust can have “business income” of upto Rs. 10 lakh. If your income by selling utility articles go beyond Rs. 10 lakh, you may have to pay income tax on that.
Dear Mr. Lalit,
First of all thanks a lot for this good info. I have already registered a society under 1956 act and a school is running under this society. I need to ask you whether I can change this society into a trust?
Please advise.
Regards,
Brij
No, you can not change a society into a trust. You will have to register a new trust.
Sir,
In maharshtra if you register a Society then that society gets a Trust Registration also automatically. My Society has Trust registration also.
Pls can you tell I can enjoy which type of benefits either of Trust or of Society. As it is registered as both.
Regards,
Mohsin
I did not know that in Maharashtra, a society automatically gets registered as a trust also! Now, I am not sure what benefit they give to you because apparently Maharashtra act is specific. You should talk to a lawyer in Maharashtra who knows about the act.
I am interested in providing legal aid to the poor and organising awareness camp for them. Which should be best option for me trust or society?
Trust is better or society is better —it does not depend on what social work you want to do. It depends on who are the people involved. I have written about the differences between trust and society, you should be able to make decision.
Please let me know a society registered under the Karnataka societies registration act 1960 can be a trustee of the trust. And Can a trust registered under indian trust act 1882 be a member of society.
Well, as far as I know, it is not possible. Trustees and governing body members are individuals -and not organizations. But you may consult a good lawyer about this.
If i registered trust in city patna, bihar state then it be registered at all India level or i have to registered it from some particular state to work at all india level. And the name of trust is also registered. Or some other charges or process to registered name at india level.
That no other origination use my trust name.
Trusts work at all India level. You don’t need to register it separately in different Indian states. I do not have enough information about exclusive rights on the name of the trust. May be a reader will shed some light on this matter.
Dear Sirs,
I was made trustee along with one more person by the alone surviving trustee in the year 2010. Later I came to know that in this particular registered deed, in last a paragraph was included ” And this indenture further witness that this Religious & Charitable Trust ” HAZARIBAGH ROAD SHREE RAM KRISHNA aSHRAM ” BEING REGISTERED UNDER SOCIETIES REGISTRATION ACT XXVIof 1961 having Registered Office at Kolkata in the Schedule in part recited in the Deed of Trust shall vest in the new trustees along with the continuing trustees without any further assurance in that behalf.”
Actually I came to know that this society was made by old trustees with other members to make a Governing body of the trustee, while our this trust was made in year 1945 by registering a deed in Kolkata and this Society was made in the year 1994-95. After holding the office of Trustees, we removed the Governing Body and taken full control of the trust.
Now my question is how we can rectify this error? What will be the effect of this error on us? As we have given a part of our property on lease to a school and by filing one PIL, one person has made party to the Society in that lease matter case, while only we trustees has signed on the lease agreement paper.
Ramesh ji, you need to speak with a good lawyer about this issue.
Hello Sir,
Nice Article. I want to ask that is it which form will be better if we want to get foreign funding, trust or society?
There is no difference.
Hello Lalit sir…
Your articles are very very helpful.
But I have a doubt in my mind.
I want to educate the children who are with intoxication (addicted). My project is to open a small school & nursing home in villages of my district for poor, labour child Family . And a full facilitated school & Nursing Home in my town for addicted children. Which one will be perfect for me Trust or Society? According to funding either public or government funds.
Hello Aamir, there is no difference between trust and society as far as possibility of funding is concerned. If you do the good work, you’ll find funding.
Hi Lalit jee,
Your articles are very much helpful.
I am running a trust. But my trustees want to kick me out of my organization. I need your help. Help me please sir.
Rakhi ji,
This is your trust’s internal matter. I am afraid I can not help in this regard. You should take advice from your lawyer.
Dear Lalit jee.
I have a question. If any NGO wants to other works besides trust deed… like environment. And public avairness. Can they do?
Well, no body stops you from doing any social work. But technically, you can not (and should not) utilize trust funds for the activities that are not mentioned as objectives in the Trust Deed. People donate to you for the work that is mentioned in the trust deed.
Thanks a lot sir.
One more question from me. If my trust deed is related to education.
And after long time my trust is running well in educational field. If we also want to do other work not related to our trust deed, like environment and pollution or other works, can we do later.
No, you can not (and should not) work outside the objectives of your trust deed. If you want to work in other areas, you should register a new trust.
Hello Lalit sir…
Your articles are very very helpful.
But I have a doubt in my mind.
I want to educate the children who are with intoxication (addicted) My project is to open a small school in 20 villages of my district for poor and labour child. And a full facilitated school in my town for addicted children. Which one will be perfect for me Trust or Society? According to funding either public or government funds.
There is no difference between a trust and a society as far as prospects of getting funds is in question. You get funds if you do good job. Period.
Hi Lalitji very interesting article.
My question is, if I have company and register trust on my wife name,if I donate fund from my company to trust. And trust will use that fund for project like green India and save water. In that case how goverment help to improve that work of trust
Brijesh, social work is all about putting one’s own resources to the welfare of society. Surely, one can seek government’s help but essentially it should mainly be about making good use of resources that are there at your disposal. If you’ll do good work, help will come. If you’ll just keep on thinking about government help, then probably it will be too late to begin. So, my friend, just go ahead and begin the good work.
Dear Sir,
Details provided by you is really precious. One more query is whether a trust is entitled for any grant/donation if the husband holds position of Secretary whereas wife is President in the same trust while treasurer is not a relative either of the two ?
Rajesh Kumar,Ranchi,
Jharkhand
—
Yes, in case of charitable trusts, family members can become trustees and hold whatever positions agreed among the board of trustees. You can also apply for government grants but agencies are free to refuse grant if they are not satisfied with your work or organization.
Dear Lalit Ji,
I have gone through your article and find it very informative. I would like register a not for profit organization to mainly promote education among socially and backward community and also promote games and sports in the area like Club. Confused whether to register under Trust or Society??. Kindly Help me out.
Thanks
good learning from this site. it felt nice to know the compression between Trust & society
Very well presented. Thanks.
Dear sir,
Your comparison of Trust and Society gives a clear picture. Thank you for making things so simple. On reading your article, I have immediately decided to register our institution under trust.
We are running a training institute, IDEAS ( Institute to Develop English, Attitude & Soft skills). If time permits, visit our website, and pass on your suggestions.
All the very best to all your efforts.
Stephen
Dear Lalit,
Many thanks for your article, well written and very informative. I have a query related to the legal status of a “trust”. We want to enter into a contract with a Trust and as per our rules, we can enter into contracts with “legal entities”only. Is a “Trust” legal entity?
Thanks again for your good work.
Dear Alka,
Yes, a registered trust is a legal entity which is bound by its own constitution (called Trust Deed). Please note that the trust must be a registered one. If you’re entering into a legal contract with a trust, you should check their Trust Deed and see if there is any clause that you may not like. Later on, if the contract is breached, you can drag the Trust to courts. But remember that a Trust is allowed to do activities which is permissible in the Trust Deed. So, it is important for you to check the Trust Deed. Hope it helps.
Hi Lalit,
Many thanks. Indeed it is very helpful.
Alka
I want to form an animal welfare ngo. Kindly do suggest which is better for this trust or society?
Would i be able to get donation in trust?
Plzz advice me benefits and dis advantages of both
Thank u
Dear Ananya, I have written these articles exactly for the purpose to let readers know all the details about Trust and Society. Please read the articles and ask very specific questions, if you have any.
Hi,
I along with 10 more guys from my village are planning to start a society for development of our village. We are not sure to register a society or trust. Also most of us don’t have pan cards.
We want to implement few development schemes in village hence need a registered body.
Can you help if we should start with society or trust. Also what all things that we need to initiate are goals.
thanks
Hello Chandrabhan, I can not go in details but I feel that you should register a Society. You can get the PAN card issued in the name of your Society. For more details and chalking out finer steps, I would suggest that you consult a good lawyer.
I want to form a non profit organization for improvement of science and technology development where various institution across the globe will be member and participate for improvement of science technology development by assisting training, R & D Set up and there will be some other specific objectives..I am confused which I should form society or trust or company, but I am afraid if it is formed as society under society act and I may be thrown by voting of other members and my objective will not fulfilled but if I formed as trust or company then democracy may not be there.
a) I want my security towards my objectives
b) I want democracy, so that it can work good for its objectives
d) I want active participation of public and institution
can you help me
e) organization will be eligible to collect fund international source
my mail is [email protected] or call me 9830051583
Well, Sambhu ji, I guess registering a Trust should be good for you. No one can kick you out of your own Trust. Moreover, in Trust, you are free to make decision making as democratic as you want. Societies HAVE TO be democratic and Trusts CAN BE made democratic.
But I understand Trust is less credible to take grant from govt, corporate and foreign companies.
I understand, any one will donate have right to select member in the committee even any body Rs 100 as donation
Trust will allow me to open office anywhere ?
How the trust will be acceptable for foreign investor/donor
A lot of big NGOs have been registered as Trusts and they get lots of funding for their objectives. So, it’s not that Societies get better funding.
I would suggest that you find a good lawyer who can give you more detailed advice.
I want to help of acid victim. what is better to help them by collect crowd funding trust or ngo?
Dear Sir,
is it possible to work as company in ngo or trust……
pease revert me on my mail
Thank’s & Regards
Surya
Sir,
kindly do let me know the which do i needed to registers ,,,as per my deed,,,i would like to take few children form the poor community and give them tution and make them to educated by staying with us full of year,,,and we like to provide them food, and helth care as well,by collecting nationa; fund these are the deeds we wanted to do,,,so under which one do i need to go for registered as a SOCIETY, trust or non profit org.
satyanarayana.v
Type of organization is not really linked with what you want to do. You can established either a trust or a society -both will work fine.
nice informative article. thanks
very important information provided
thanks
Great Article by Lalit, Wish him all the success in his life.
Thanks
thank you for providing information
really very nice
i would plane to organized a welfare organization to help abundant, uncared, unloved people and offer compassion and aid to those in need.
organizing slum evening school
programming bring peace and brotherhood in all religions
please tell me which one could i choose for registration society or trust
reallly we thanks for making our doubt to be clear.
thanks once again with regards
It would be nice to know how the government (state and central) looks at these two entities from the point of view of giving aid (funding), subsidies, etc. I know that private funding is harder to receive by trusts but don’t know if that’s true for tax-exempt trusts.
Thank you.
How it can secure the employees if it is trusty and society?
Sir,
Thanks , very important information given. Pl.support us all time to com.
yours
Rabi
My Pleasure Rabi Mohanty!
Family members are not allowed to be part of the society?
I have registered an education trust at Thane Maharastra. How to make it valid for all India so that school can be open any part of India on the same Registration Number.
Please also reply on email id: [email protected]
Trusts are valid all over India by default. You don’t need to do anything.
We have a Trust registered under Karnataka Societies Act. We also got registered under section 12A of Income Tax act, 1961 in the same state. Now we want to transfer its jurisdiction in Delhi. So do we have to get it registered again in Delhi Societies registration act?
Trusts can function on all India basis. You don’t need to re-register your trust in Delhi.
simple and whole at a glance, thank you sir
thanks for saving our time and provide us important information
Nice piece of research. This comparative table is worth saving. Thanks for this one :-)