Understand the difference between Trust, Society and Section 8 Company

Meaning of Society and Section 8 Company or Trust

Here is general overview of the Society and Section 8 Company or Trust explains herein:

Society: It is an association created by a group of persons with common purposes. Such as education; promoting culture, scientific, charitable, literary or social activities. Societies are formed under the provisions of the Societies Registration Act,1860. It provides the provisions related to its formation, functions, and registration of the society. 

The society is operated through a structured management system, which is governed by an executive committee elected by the members. The activities and operations of a society are mainly given by its bylaws. That provides the governance framework, rules for decision-making, the company’s goals, and membership criteria. 

Section 8 Companies: It is also known as a Section 8 non-profit company. A section 8 company is a legal framework provided as per provisions of the Companies Act, 2013. It is for encouraging and promoting certain activities such as scientific, artistic, educational, charitable, religious, or social welfare. The primary motive of this company is to facilitate performances, which contribute towards the betterment of society and the general public. 

Trust: It is a legal entity in which a person (who is known as a Trustee) holds and manages all assets for the well-being of another individual or group of individuals (those are known as Beneficiaries). A person who makes the trust is known as the “grantor”. Trusts have been set up for several purposes such as asset protection, estate planning, charitable giving, etc. 

Trusts can take any form; each has its features and benefits like charitable trusts, revocable living trusts, testamentary trusts, and irrevocable trusts. Trusts provide separate legal ownership and managing assets from beneficial ownership, which can help to offer benefits. Such as Privacy, tax planning, and structured distribution of assets over time.

Difference between Trust, Society, and Section 8 Company

Here represents the tabular form of difference between Trust, Society and Section 8 Company are as:

Final Words

In conclusion, the article has provided the finest understanding of the three different charitable institutions. In which, one can select for the well-being of the society or general public. The selection can be done with your mission, and make sure to create positive change. These three different charitable institutions are equally important to each other. This entire legal framework provides its distinct benefits and limitations. The selection depends on the particular goals, governance, and activities of your company.