Procedures, Rules and Requirements

Company

Society

Trust

Registration
processes have the status of Non Profit Organisation (NGO) / Non Profit
Organisation (NPO)

Non
Profit Company is an NGO/ NPO.

Society
is an NGO / NPO.

Trust
is an NGO / NPO
There is no
difference in the registration process in the status of ‘NGO’ in any
organisation registration process.

Law/Act
applied for to register NGO

Companies
Act.

Societies
Registration Act, 1860

Indian
Trusts Act 1982/ Bombay Public Trusts Act

Time
takes to Form

15
Days-1 Month.

15 Days-2 Months.

From
2 days to one week.

Registering Authority

Registrar of Company.

Registrar or Deputy Reg. of
Societies of the concerned State/ Charity Commissioner.

Sub-Registrar of Registration/
Charity Commissioner.

Issue of Name approval

Before registration name approval
is required by application to ROC.

If any other NGO is not registered
with the required Name in the particular jurisdiction of registration, then
it is possible. And if any other Society (NGO) is registered with the name in
that registrar then it can not be approved and provided.

Name approval is not required, if
the name is not under Emblem Act.

The State Emblem of India
(Prohibition of Improper Use) Act, 2005

Name cannot be approved if the
name is restricted under the Emblem Act.

Name cannot be approved if the
name is restricted under the Emblem Act.

The names restricted under the
Emblem Act can be disapproved. But sometimes some Deputy Registrars and
Readers refuse the other names which are not under the Emblem Act, just due
to their personal and unofficial reasons, this is illegal they can not do it.
If they do such actions, they can be legally challenged against their
offensive and unauthorised actions.

Eligibility of Family Members to
be Member of Organisation

Anybody can be the director of a
Company. But certain Government Ministries/ Departments and funding agencies
can refuse funding for the Company having same family members as directors.

Members of the same family can not
be member in a Society.

There is no restriction in
formation of a Trust with members of the same family.
But certain Government Ministries/ Departments and funding agencies can
refuse funding to the Trusts those are having same family members as Trustee.
So initially family members can be there to form NGO but at the time of
funding from certain Ministries or Funding agencies the Trustees can be
changed.

Minimum Members/ Directors/
Trustees at state level Registration required

Minimum Two Directors.

Minimum Seven Members.

At least (Minimum) Two Trustees.
Minimum 3 Trustees/Members recommended.

Minimum Members at National level
required

Minimum Two Directors.

Minimum Eight Members from 8
different states are required in National level Society.

Minimum Two Trustees only, no
limit of maximum Trustees/ Members. Minimum Three Trustees/Members
recommended.

Governing Structure

1. General Body of Directors.
2. Board of Directors.

1. General Body.
2. Executive Committee.

1. General Body/Board of Trustees.
2. Executive Committee.
Or Only one General Body of Trustees.

Area of operation of NGO

Company can be operated throughout
India. National validity is there as the registration is granted by the
Central Government.

Society can be operated throughout
India when registered as a National level society. When a society is
registered in one State, area of operation will be in that state only.

Registration under Trust Act has
national validity and can operate throughout India. Some certain terms,
clauses and processes are applicable during registration and after
registration.

Status for Rights of Vote and
Power

Provision of the voting rights
vary on the basis of share holding capacity of Directors.

All members of a society have
equal rights in the General Body.

All Trustees have equal rights
except the Managing Trustee, if there are any specific powers are provided.
Authorised persons may have different powers.

Can get funding. There is no
difference to get funding in any of the NGO form.

Company can have funding
possibilities.

Society can get funding if it is
eligible according to the terms of the funding agencies or Government
Ministries or departments.

Trust can get funding if it is
eligible according to the certain terms of the funding agencies or Government
Ministries or departments.

Annul Reports and other Documents
to be submitted or filed apart from Income tax department

Company has to submit Annual
Return and audited accounts at the financial year end.

According to the Section 4 of
Societies Registration Act Annual list of managing body is to be filed every
year. Resolutions are also submitted for approval in certain cases in certain
states and in all or certain cases in some states.

No Annual report, resolution or
any documents are required to be submitted or filed after registration of
Trust to Registering authorities.
Only the General body and other executive committees or any sub committees
have to maintain their own registers of meetings, resolutions, decisions
and/or any other activities regarding decisions.

General Body and Board meetings

In the Companies Act there are
specific provisions of meetings. At least one Annual General Meeting and 4
Board meetings are required to be held every year.

General Body and Board meetings
are required to be held as prescribed in the bye laws of the society. To
follow the democratic pattern of society, regular meetings should be held for
active societies.

No provisions exist to organise
meetings. But to follow the democratic pattern of working of NGO registered
under Trust Act, regular meetings should be organised for active Trusts. To
organise meetings, adequate rules can be framed in the trust deed.

Transfer of Directorship/
Membership/ Trusteeship

Directorship can be transferred.
Restriction on the transfer can also be placed.

Membership of Society is not
transferable according to the Act.

There is no provision to transfer
the Trusteeship in the Indian Trust Act for the Charitable Trust as an NGO.

Can use Foundation, Trust,
Society, Samiti, NGO words with the name of organisation

Foundation, Samiti word can be
used with the name.

Foundation, Samiti, Society,
Organisation words can be used with the name of society.

In the name of Trust the words Foundation,
Trust, Samiti, Society or any words can be used. No need to use Trust word
along with the name during Trust registration.

Can a foreigner be a director/
member/ trustee.

Foreigners can be directors with
certain Government Terms and Rules.

A foreigner can be a member of
society with certain permission and terms of Goverment of India and the
concerned state/Union Territory of India where the registration process is
applied.

There
is no restriction and provision to foreigners to be or not to be members. So
foreigners can be members of a Trust but certain Government Terms and Rules
are applied

Membership/ Directorship/
Trusteeship and Citizenship status of NRIs and OCI Card Holders matters
according to their Passports.

For the NRIs or OCI Card holders
their status of citizenship as mentioned in their passport is applied for the
nationality.
If NRI is India citizen then he/she can be Director.

If the NRI or OCI Card holder want
to be member then the status of citizenship/ nationality shall be applied as
per mentioned in the passport.
If NRI is India citizen then he/she can be Member.
There are certain terms including the members must not be outside India for
more than 6 months.

For NRIs and/or OCI Card holders
there is no special rule to be member/ trustee but their citizenship status
is considered as it is mentioned in their passport.
If NRI is India citizen then he/she can be Trustee.

If there is a foreigner as member/
trustee/ director in any NGO

There may be certain difficulties
to get FCRA registration.

It is difficult to get FCRA
registration if there is any foreigner member in a Society.

If there are any foreigner members
in a Trust then it may not possible to get FCRA.

Provision of Recurring expenditure

Annual Returns and balance Sheet
are filed with certain fees. Have to pay fee if there is any resolution to
approve.

Negligible and minimum statutory
compliances are required.

No statutory recurring expenditure
after registration.

Eligible for School/ College
Formation

Non Profit Company is eligible for
School/ College formation except in certain States of India.

Society is eligible for School/
College formation in all States of India, including Rajasthan.

Trust is eligible for School/
College formation except in few certain States of India like Rajasthan. So if
you want to form school/ college in those states you have to register a
separate society and can run a Trust as an NGO for social development works.

Can members get Payment or can not

General body of Company can
approve to get payment.

General body can permit and
approve to get payment.

Trustee can not receive Payment
but if there is a provision to get funds in the trust deed then Trustees can
receive payment for project or if the Trustee is providing professional
service or consultancy.