{"id":57310,"date":"2023-05-29T16:58:18","date_gmt":"2023-05-29T11:28:18","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=57310"},"modified":"2024-03-11T15:43:51","modified_gmt":"2024-03-11T10:13:51","slug":"what-is-the-difference-between-ngo-and-trust","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-is-the-difference-between-ngo-and-trust\/","title":{"rendered":"What Is The Difference Between NGO And Trust?"},"content":{"rendered":"\n<p>We\nhave been gifted with this beautiful world where we can live, but due to busy\nschedules, we often forget that we owe some responsibilities towards nature. In\norder to take care of this world and nature, the NGOs and Trust came into the\npicture. There is no specific reason why these entities are created. At the\nsame time, the only common thing is that they are registered for a social\ncause. Every NGO and Trust can be incorporated for different social reasons,\nsuch as poverty, nature welfare, education, etc.<\/p>\n\n\n\n<p>Both\nNGO and Trust work for the welfare of people and are engaged in charitable\nwork. Therefore, there might be some difficulty in understanding the difference\nbetween the two and some people might also think that NGO and Trust are same.\nIn contrast, both are different entity work for different purposes, and their\nregistration and incorporation process is also different. <\/p>\n\n\n\n<p>Generally, NGOs do the work of promoting governmental issues and creating awareness among such issues that are not in government&#8217;s control. Moreover, NGOs can take financial assistance from the government. Whereas trust can be a public or private entity, and they do not have any connection with the government and their issues. They work on their own set of rules and regulations. It cannot receive any financial assistance from the government. In this blog, we will understand the difference between <strong><a href=\"https:\/\/corpbiz.io\/ngo-registration\">NGO<\/a><\/strong> and <strong><a href=\"https:\/\/corpbiz.io\/trust-registration\">Trust<\/a><\/strong> and their registration process.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is The\nMeaning Of NGO And Trust?<\/h2>\n\n\n\n<p>Let\u2019s\ndiscuss the meaning of NGO and Trust:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Meaning of NGO<\/h3>\n\n\n\n<p>NGOs are Non-governmental Organizations that are created only for the purpose of social welfare. Therefore, they cannot earn profits or distribute dividends. These organisations are governed by Section 8 of the Companies Act 2013, which clearly states that these companies cannot declare dividends and invest profits back in the company for promotion or welfare.<\/p>\n\n\n\n<p>There are different NGOs created for different purposes, such as education, health, poverty, unemployment, etc. Their main aim is to make this world a better place to live in for everyone, irrespective of the condition of the person.<\/p>\n\n\n\n<p>Furthermore, the NGOs receive huge tax benefits and exemptions as they do not make a profit and are known to be members of civil society.<\/p>\n\n\n\n<p><strong>Laws governing the\nRegistration of NGOs<\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Indian Trust Act of 1882<sup><a href=\"https:\/\/www.indiacode.nic.in\/bitstream\/123456789\/2327\/1\/AAAA1882____A02.pdf\"><strong>[1]<\/strong><\/a><\/sup> \u2013<\/strong> A trust can be registered under this act. <\/li>\n\n\n\n<li><strong>Societies Registration Act, 1860 \u2013<\/strong> Societies in India can be registered under this act. <\/li>\n\n\n\n<li><strong>Companies Act, 2013 \u2013<\/strong> Section 8 companies can be registered under this act. Such as Nidhi Companies.<\/li>\n<\/ul>\n\n\n\n<p><strong>Registration of NGOs Based\nOn Their Functions<\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Trust Registration: <\/strong>Since\ntrusts are irreversible and cannot be altered or dissolved without the\nbeneficiary&#8217;s approval, NGOs with a small membership or permanent institutions\nlike orphanages and nursing homes choose this kind of organisation. Trusts are\nnot governed by a Central Act, but there are certain states governing the\ntrust, and as a result, the same happens with NGOs.<\/li>\n\n\n\n<li><strong>Registration of Societies\n&#8211; <\/strong>Societies are member-based organisations that\nare controlled by a committee selected by the members in accordance with\nself-created regulations. Associations are registered under the Societies\nRegistration Act of 1860.<\/li>\n\n\n\n<li><strong>Company Registration\nUnder Section 8 <\/strong>&#8211; Limited liability firms are\nbusinesses that are created to achieve social objectives and the common good.\nMoreover, every NGO will be registered as per the provisions of the Companies\nAct. <\/li>\n<\/ul>\n\n\n\n<p>Companies\nAct 2013 allows the creation of an NGO under section. It allows NGOs to be\neither governed by the government or individuals. Incorporating NGOs is\nimportant for a well-functioning society as they help people in need and fulfil\ntheir objectives. The main objective of these NGOs is to bring the common people\nand government on the same and let the common voice people heard, and make the\ngovernment take cognisance of the same. <\/p>\n\n\n\n<p>So\nfar, we have witnessed the role of NGOs in helping people and fighting for\ntheir rights. They have successfully contributed to society and worked for\ntheir welfare. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Meaning of\nTrust<\/h3>\n\n\n\n<p>This\nis also a form of charitable organisation, and such organisations have been\ncreated since the old days. Here the ownership of one party is retained by\nanother. This means that a property owned by someone is held by someone else on\nbehalf of the owner of the property. <\/p>\n\n\n\n<p><strong><em>Instances\nin which a trust can be formed:<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>If two or more members of\nthe family are engaged in running a business. <\/li>\n\n\n\n<li>If you would prefer that the\ntrustee must remain in office permanently without being put up for election.<\/li>\n\n\n\n<li>Privacy is also crucial,\nin addition to benefit distribution flexibility.<\/li>\n<\/ul>\n\n\n\n<p><strong>Registration\nof Trust Deed<\/strong><\/p>\n\n\n\n<p>The\namount the trust property is worth and will determine how much it is worth on\nthe non-judicial stamp paper used to execute the trust deed. A request must be\nmade to the competent sub-registrar with authority over the desired\nregistration area in order to trust registration.<\/p>\n\n\n\n<p>The trust deed must be recorded in order for an immovable property owned by a charity or religious trust to be excluded from taxation under Section 11 of the <strong><a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\" target=\"_blank\" rel=\"noreferrer noopener\">Income Tax<\/a><\/strong> Act.<\/p>\n\n\n\n<p>A\nTrust Deed cannot be recorded unless the Settlor or Trustees, two witnesses,\nand their images and Identity Proofs are physically present at the Registrar&#8217;s\nOffice. After two witnesses have attested to it, the settlor or trustees should\nsign the trust deed with their consent.<\/p>\n\n\n\n<p><strong>Inclusions\nin a Trust Deed<\/strong><\/p>\n\n\n\n<ul>\n<li>Trustee\u2019s Name<\/li>\n\n\n\n<li>Name of Author or Settlor\nof the trust.<\/li>\n\n\n\n<li>Name of the beneficiary,\nif any.<\/li>\n\n\n\n<li>Purpose of the trust,\nwhether public or charitable.<\/li>\n\n\n\n<li>Name of the Trust.<\/li>\n\n\n\n<li>Place of residence of trustees,\nprincipal &amp; other offices.<\/li>\n\n\n\n<li>Details of Trust assets.<\/li>\n\n\n\n<li>The main and secondary\nobjects of the trust.<\/li>\n\n\n\n<li>Appointment, removal,\nreplacement of trustees, their powers, rights, duties, etc. <\/li>\n\n\n\n<li>The procedure of\nestablishment of the trust.<\/li>\n\n\n\n<li>The Rights and\nresponsibilities of the beneficiary of the trust.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Difference\nbetween NGO and Trust<\/h2>\n\n\n\n<p><strong>Following\nare the differences between NGO and Trust:<\/strong><\/p>\n\n\n\n<ul>\n<li>The trust is governed by\nthe Indian Trust Act of 1982, whereas an NGO is governed by the Companies Act\nof 2013.<\/li>\n\n\n\n<li>An NGO takes around 15\ndays to one month for registration. In contrast, the trust takes around two\ndays to one week for registration.<\/li>\n\n\n\n<li>The authority responsible\nfor the registration of an NGO is the Registrar of the Company. At the same\ntime, the Charity Commissioner\/ Sub-registration of Registration is responsible\nfor the registration of a trust.<\/li>\n\n\n\n<li>According to the trust\nact, you are not allowed to transfer the Trusteeship of a charitable trust to\nan NGO. On the other hand, it is allowed to transfer the Directorship to an NGO.<\/li>\n\n\n\n<li>The trustees of a\ncharitable trust are not allowed to take any funds except as stated in the\nstatute governing the body. But, in NGOs, the funds can be given to the members\nafter getting approval from the general body of the NGO. <\/li>\n\n\n\n<li>In order to get a name\nfor the trust, no approval is required, but the name of the NGO can be taken\nonly after submitting an application to the Registrar of Companies. <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>Everyone will now understand the difference between NGO and Trust, and it will be easy for you to take a decision as to whether you wish to register an NGO or a trust that can fulfil your requirement. For more related details, you can contact Corpbiz, our team of legal experts will provide detailed guidance and help you register an NGO or trust.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>: <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/full-guide-ngo-registration-types-and-benefits\/\">Guide On NGO Registration: Types And Benefits<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>We have been gifted with this beautiful world where we can live, but due to busy schedules, we often forget that we owe some responsibilities towards nature. In order to take care of this world and nature, the NGOs and Trust came into the picture. There is no specific reason why these entities are created. [&hellip;]<\/p>\n","protected":false},"author":59,"featured_media":57365,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[3686],"acf":{"service_id":"10"},"authorName":"Anushka Saxena","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2023\/02\/MicrosoftTeams-image-109.jpg","authorDescription":"Anushka Saxena is a final year law student from Indore Institute of Law. She is an hardworking, dedicated and fun-loving person. Her area of interest lies in corporate laws and IPR.","postViews":25170,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/57310"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=57310"}],"version-history":[{"count":4,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/57310\/revisions"}],"predecessor-version":[{"id":62993,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/57310\/revisions\/62993"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/57365"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=57310"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=57310"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=57310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}