Difference Between Trust, Society & Section 8 Company

June 16, 2025

When you're starting a non-profit organisation in India, one of the first and most important decisions you'll make is how to structure it. Should you register a Trust, a Society, or a Section 8 Company?

Each of these legal forms has its own advantages, legal requirements, and use cases. Choosing the right one depends on your objectives, the nature of your activities, the scale, and how you want to govern the organisation. 

In this guide, we’ll explain the key differences and help you decide which structure best suits your non-profit mission.

Table of Contents

What is a Society?

A society is a non-profit organisation formed by a group of individuals who come together for charitable, literary, scientific, cultural, or educational purposes. Societies in India are governed by the Societies Registration Act, 1860, although many states have their own versions of the Act (e.g., Maharashtra, Tamil Nadu, etc.).

A society must have:

  • A minimum of seven members to register at the state level
  • An elected governing body or managing committee
  • A constitution or memorandum outlining its objectives and rules

Societies are known for their democratic structure, where members have voting rights and leadership is elected periodically.

When to Consider Forming a Society?

Forming a society may be your best option if:

  • You prefer a democratically run organisation with an elected management committee
  • Members may change frequently or seek easy exit options
  • You want a relatively simple dissolution process
  • You're operating within a state jurisdiction (or planning to expand nationally with additional registrations)

Societies are particularly suited for community-driven or volunteer-based initiatives, like resident welfare associations, cultural organisations, and grassroots education or health programs.

Meaning of Trusts

A trust is a legal arrangement under the Indian Trusts Act, 1882 (or relevant state-specific Public Trusts Acts) in which a settlor (or author) transfers property or assets to one or more trustees, who hold and manage them for the benefit of specific beneficiaries.

Key roles in a trust:

  • Author of the trust: The person who creates the trust and donates property
  • Trustee: The person(s) responsible for managing the trust and fulfilling its objectives
  • Beneficiary: The individual(s) or group for whom the trust is created

The central concept is the "beneficial interest"- the trustee has legal control of the asset, but the benefit goes to the beneficiaries. Trusts are often used in both private and public charitable contexts.

Want to register your organisation? Get expert help with Company registration — start your journey today with Razorpay Rize.

When and Why You Might Need a Trust?

You might choose a trust if:

  • You want to retain long-term control without democratic elections or rotating leadership
  • Your non-profit involves family members or a small, stable group of trustees
  • You need privacy, minimal external regulation, or flexible distribution of benefits
  • You plan to manage property, assets, or legacy donations

Trusts are ideal for schools, hospitals, orphanages, and religious institutions, especially when the focus is on asset management and continuity over generations.

Meaning of Section 8 Companies

A Section 8 Company is a special form of non-profit company registered under the Companies Act, 2013. It is incorporated to promote commerce, art, science, research, education, social welfare, religion, or charity.

Key features:

  • It must apply for a license from the Central Government
  • Its profits or income cannot be distributed as dividends
  • All income must be used to promote the organisation’s objectives
  • The name does not include “Limited” or “Private Limited”

Section 8 Companies are highly structured, professionally governed, and seen as credible entities both by donors and government bodies.

Reasons for Forming a Section 8 Company

You should consider registering for Section 8 Company if:

  • You're looking for a formal and transparent governance model
  • You want to build long-term partnerships with government bodies, corporates, or international NGOs
  • You're applying for CSR funds, grants, or FCRA registration
  • You want to project credibility and professionalism in your operations

Section 8 Companies are ideal for large-scale non-profits, social enterprises, or organisations planning to operate across India or internationally.

Difference Between Society, Trust, and Section 8 Company

All three structures, Trusts, Societies, and Section 8 Companies, are eligible for tax exemptions under Section 12A and 80G of the Income Tax Act. They also meet the definition of "charitable purpose" under Section 2(15).

But beyond this, they vary significantly in formation, governance, compliance, and scalability. Here’s a comparison at a glance:

Feature Trust Society Section 8 Company
Governing Law Indian Trusts Act, 1882 or State Trusts Acts Societies Registration Act, 1860 Companies Act, 2013
Minimum members 2 Trustees 7 Members 2 Directors
Legal Status Not a separate legal entity Not a separate legal entity A separate legal entity
Management Trustees (no elections) Governing Body (elected) Board of Directors
Jurisdiction State-level State or national (dual registration needed) Nationwide
Compliance requirements Low Moderate High
Ease of Formation Easy Moderate Requires licensing
Ideal for Asset holding, religious charities, long-term control Community organisations, associations Large-scale NGOs, CSR projects, international collaborations

Each structure, Trust, Society, or Section 8 Company, has its own strengths. The right choice depends on your mission, governance preferences, funding goals, and long-term vision.

Frequently Asked Questions

rize image

Register your Business at just 1,499 + Govt. Fee

Register your business
rize image

Register your One Person Company in just 1,499 + Govt. Fee

Register your business
rize image

Register your Company at just 1,499 + Govt. Fee

Register your business
rize image

Register your Limited Liability Partnership in just 1,499 + Govt. Fee

Register your business

Frequently Asked Questions

Which one should you choose: a Society, a Trust, or a Section 8 Company?

Choose a Trust for simplicity and long-term control, a Society for community-driven work with flexible membership, and a Section 8 Company for structured governance, high credibility, and large-scale funding opportunities.

Can a Section 8 Company be a Trust?

No, a Section 8 Company cannot be a Trust, and vice versa—they are legally distinct entities governed by different acts:

  • A Trust is formed under the Indian Trusts Act, 1882 (or the relevant state act).
  • A Section 8 Company is registered under the Companies Act, 2013.

Is a Trust better than a Company?

A Trust is better for small, asset-focused initiatives that don’t require external validation or heavy fundraising.

A Section 8 Company is better if you want visibility, growth, funding, and governance discipline.

Razorpay Rize

Rize.Start

Hassle free company registration through Razorpay Rize

in just 1,499 + Govt. Fee
With ₹0 hidden charges

Make your business ready to scale. Become an incorporated company through Razorpay Rize.

Made with ❤️ for founders

View our wall of love

Smooth onboarding, seamless incorporation and a wonderful community. Thanks to the #razorpayrize team! #rizeincorporation
Dhaval Trivedi
Basanth Verma
shopeg.in
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India.
@foxsellapp
#razorpayrize #rizeincorporation
Dhaval Trivedi
Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
Nayan Mishra
https://zillout.com/
Smooth onboarding, seamless incorporation and a wonderful community. Thanks to the #razorpayrize team! #rizeincorporation
Dhaval Trivedi
Basanth Verma
shopeg.in
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India.
@foxsellapp
#razorpayrize #rizeincorporation
Dhaval Trivedi
Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
Nayan Mishra
https://zillout.com/