Talk to a specialist about trust & section 8 company registration.
WhatsApp for a Free ConsultationUnderstanding Trust & Section 8 Company Registration
Not-for-profit organisations in India can be structured as a Public Charitable Trust, a Society, or a Section 8 Company. Each has distinct characteristics, but all are designed for entities whose purpose is charitable, educational, religious, scientific, social welfare, or other non-profit objectives.
Public Charitable Trust is governed by the Indian Trusts Act, 1882 and state-specific trust laws. It is created by a Trust Deed, which defines the objectives, trustees, and governance. Trusts are relatively simple to form and are widely used by family-run charitable institutions, temples, schools, and social welfare organisations.
Section 8 Company is a type of Private Limited Company registered under the Companies Act, 2013, where the profits — if any — are applied towards the promotion of the charitable objects and cannot be distributed as dividends to members. Section 8 Companies are subject to MCA regulations and are considered more structured and credible than trusts, making them preferred for organisations dealing with foreign funding (FCRA), corporate CSR partnerships, and institutional donors.
Both structures can apply for income tax exemptions under Section 12A and Section 80G of the Income Tax Act, which make donations to them tax-deductible for donors.
Why This Matters
- 12A Registration: Exempts the organisation's income from income tax, allowing funds to be deployed entirely towards charitable objectives.
- 80G Registration: Enables donors to claim a deduction on their Income Tax return for donations made to your organisation — a powerful fundraising tool.
- FCRA Compliance: Foreign Contribution Regulation Act (FCRA) registration allows organisations to receive foreign funding — critical for international NGOs and donor-funded projects.
- Legal Legitimacy: A registered trust or Section 8 company can open bank accounts, hold property, and enter into contracts in its own name.
- CSR Funding: Companies under the Companies Act, 2013 can direct CSR funds only to registered charitable entities or Section 8 companies.
Who Needs This Service?
- Founders setting up NGOs, charitable foundations, or social enterprises
- Educational institutions, hospitals, or religious organisations seeking formal registration
- Family trusts for philanthropic or wealth management purposes
- Organisations planning to receive foreign donations (FCRA)
- Corporates setting up their CSR implementing entities
Why Choose Pixelex
- CA + Legal expertise: Trust and Section 8 matters straddle company law, tax law, and charity law. Our combined CA and Advocate team is uniquely positioned to handle all three.
- 12A & 80G in one engagement: We don't stop at registration — we take you all the way to tax exemption approvals so your organisation is donor-ready.
- Clear, compliant trust deeds: A poorly drafted Trust Deed can create governance disputes for decades. We draft with precision and foresight.
Our Process
- 01
Structure Advisory
We advise on the most suitable structure (Trust vs Society vs Section 8 Company) based on your objectives, geography, governance preferences, and funding plans.
- 02
Document Drafting
We draft the Trust Deed or Memorandum of Association and Articles of Association (for Section 8), ensuring your stated objects meet the legal requirements for charitable purposes and are eligible for 12A/80G exemptions.
- 03
Registration
We handle the registration process — with the Sub-Registrar (for trusts), Registrar of Societies, or MCA (for Section 8 Company), as applicable.
- 04
Tax Exemption Applications
We file applications for 12A registration (income tax exemption) and 80G registration (donor deduction eligibility) with the Income Tax Department on your behalf.
- 05
FCRA Advisory (if required)
For organisations expecting foreign contributions, we advise on FCRA registration and assist with the application under the Ministry of Home Affairs.
Frequently Asked Questions
What is the difference between a Trust and a Section 8 Company?
A Trust is simpler and governed by state trust laws. A Section 8 Company is governed by the Companies Act, has a more structured governance framework, and is generally preferred for larger organisations, those receiving CSR funds, or those seeking FCRA registration.
Can a Section 8 Company earn income?
Yes, but any income must be applied solely towards the charitable objectives of the company. Profits cannot be distributed to members or directors.
How long does 12A and 80G registration take?
After filing the application, the Income Tax Department is required to process and grant (or reject) the application within specified timeframes. Pixelex tracks the application and responds to any queries from the department.
Is a Trust required to file Income Tax returns?
Yes. All registered trusts and Section 8 companies must file Income Tax returns annually, even if they are exempt from tax under Section 12A.
Can foreign nationals be trustees or directors in an NGO?
Yes, with certain restrictions. For entities receiving foreign funding, FCRA guidelines impose additional conditions on office-bearers.