Find out the dissimilarities between Trust, Section 8 Company & Society

There are certain forms of organisation or company created with the motive of providing services to the members, rather than earning a profit like Trust, Section 8 Company & Society. Private Trust is governed under Indian Trust's Act,1882 whereas Societies are governed by the Indian Societies Act,1860. Section 8 Companies are governed by the Companies Act 2013. Let us further define what Trust, Section 8 Company & Society and then discuss the differences in this article.

TRUST

A Trust Property requires a Trust Deed where a document details the terms and conditions of the Trust Deed. The Trust Deed is applicable across the country except in Jammu & Kashmir as stated by the Indian Trusts Act.

It is a legal entity, formed by one part in which assets are entrusted to the second party by the first party, for the benefit of a third party.

SOCIETY

A Society is established by a group of persons who benefit mutually from the fulfilment of a common goal or for serving a shared purpose. Such goal or purpose may pertain to the advancement of any literary, charitable or scientific work.

SECTION 8 COMPANY

A Section 8 Company is established for a charitable purpose as an adjunct to the commercial business which is formed under Companies Act 2013. The prerequisite of Section 8 organisation is that the one cannot divide the profits earned by the organisation. They can use the profits only to promote and strengthen the work.

Key Differences:

• Agreement: A Trust is an agreement between parties. Where Section 8 Company is a non-profit enterprise associated with a commercial venture. While Society is a group of people who share mutual goals.
• Members: Trust require a minimum of two members, while a Society requires a minimum of 7 members. A Section 8 company requires two members to set up.
• Documents: Trust Deed is an important document for a Trust while MOA(Memorandum of Association) and Rules & Regulations are required to form a Society & Section 8 Company.
• Director: Trust can be governed by a single man, while Society is relatively democratic. Section 8 Company has a board of directors.

We'd love to hear your response!

Make it heard by sharing this piece of information!