Ngo formation
mukund
(Querist) 23 May 2014
This query is : Resolved
which is the best option to register NGO.
as trust
or
as society.
what is the difference between two?.
mukund
(Querist) 23 May 2014
my question is what is the difference?
malipeddi jaggarao
(Expert) 24 May 2014
Mr.Mukund, the following may be useful to you:
I. Trusts
A public charitable trust is usually floated when there is property involved, especially in terms of land and building.
Legislation : Different states in India have different Trusts Acts in force, which govern the trusts in the state; in the absence of a Trusts Act in any particular state or territory the general principles of the Indian Trusts Act 1882 are applied.
Main Instrument : The main instrument of any public charitable trust is the trust deed, wherein the aims and objects and mode of management (of the trust) should be enshrined. In every trust deed, the minimum and maximum number of trustees has to be specified. The trust deed should clearly spell out the aims and objects of the trust, how the trust should be managed, how other trustees may be appointed or removed, etc. The trust deed should be signed by both the settlor/s and trustee/s in the presence of two witnesses. The trust deed should be executed on non-judicial stamp paper, the value of which would depend on the valuation of the trust property.
Trustees : A trust needs a minimum of two trustees; there is no upper limit to the number of trustees. The Board of Management comprises the trustees.
Application for Registration :
The application for registration should be made to the official having jurisdiction over the region in which the trust is sought to be registered.
After providing details (in the form) regarding designation by which the public trust shall be known, names of trustees, mode of succession, etc., the applicant has to affix a court fee stamp of Rs.2/- to the form and pay a very nominal registration fee which may range from Rs.3/- to Rs.25/-, depending on the value of the trust property.
The application form should be signed by the applicant before the regional officer or superintendent of the regional office of the charity commissioner or a notary. The application form should be submitted, together with a copy of the trust deed.
Two other documents which should be submitted at the time of making an application for registration are affidavit and consent letter.
II. Society
According to section 20 of the Societies Registration Act, 1860, the following societies can be registered under the Act: ‘charitable societies, military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collection of natural history, mechanical and philosophical inventions, instruments or designs.’
Legislation : Societies are registered under the Societies Registration Act, 1860, which is a federal act. In certain states, which have a charity commissioner, the society must not only be registered under the Societies Registration Act, but also, additionally, under the Bombay Public Trusts Act.
Main Instrument : The main instrument of any society is the memorandum of association and rules and regulations (no stamp paper required), wherein the aims and objects and mode of management (of the society) should be enshrined.
Trustees : A Society needs a minimum of seven managing committee members; there is no upper limit to the number managing committee members. The Board of Management is in the form of a governing body or council or a managing or executive committee
Application for Registration :
Registration can be done either at the state level (i.e., in the office of the Registrar of Societies) or at the district level (in the office of the District Magistrate or the local office of the Registrar of Societies).(2)
The procedure varies from state to state. However generally the application should be submitted together with: (a) memorandum of association and rules and regulations; (b) consent letters of all the members of the managing committee; (c) authority letter duly signed by all the members of the managing committee; (d) an affidavit sworn by the president or secretary of the society on non-judicial stamp paper of Rs.20-/, together with a court fee stamp; and (e) a declaration by the members of the managing committee that the funds of the society will be used only for the purpose of furthering the aims and objects of the society.
All the aforesaid documents which are required for the application for registration should be submitted in duplicate, together with the required registration fee. Unlike the trust deed, the memorandum of association and rules and regulations need not be executed on stamp paper.
T. Kalaiselvan, Advocate
(Expert) 24 May 2014
Expert Mr. Malipedi Jagga Rao has given an elaborate explanation and advise on the formalities in this regard, I agree with his views, you may follow it.
R.V.RAO
(Expert) 25 May 2014
through an NGO,if you wish to serve the entire community and public at large instead of a select few or chosen or specific group, then public trust is better.
remember the indian trusts act 1882 deals only with private trusts and trustees.
Differences between a Trust and a Society, are as follows:
Statute/Legislation.
Private trusts are governed by Indian Trust Act, 1882.
Public charitable trusts do not have a national level governing law.
for societies gov,act is Societies Registration Act, 1860.
Minimum number of members Two for trust and Seven for society.
Geographical area of activities of trust: All India (no need to mention this in the Trust Deed).
for society: A separate registration for All India level is required (8 members from different states required).
Nature of control:One man control, i.e. Settler for the trust.
for society Democratic system. Decisions are made by voting. Power struggle may ensue.
Amendments : Can easily be done via a supplementary trust deed
for society:
Relatively more difficult. Both Memorandum of Association and Rules and Regulations need to be changed.
trust Names: Easily available.
for society: name availability is a bit difficult to get the desired name.
Bank a/c operation: in trust, Controlled by one person, Settler
in society bank operation : is by Two persons, either President or Secretary and Treasurer.
Office holders’ tenure: Trustees generally hold office for the whole life .
society Members hold office for a period of time as per bye laws, and may stand for re-election.
Winding-up
Trust is generally irrevocable, Can not be wound-up.
society:
Can be wound up if 3/5th of the members so desire
Family members in a trust Can become trustees
society :Registrar objects on family members becoming part of the Governing Body.
trust Governed by Board of Trustees for a society Governing Body governs.
Main documents
Trust Deed for trust
for society:Memorandum Of Association
Rules and Regulation
trust:Objectives Can be general
society:Have to be specific
R.V.RAO
(Expert) 25 May 2014
source for above reply is http://techwelkin.com/difference-between-trust-and-society-in-india .
