Trust vs Society: Key Differences, Features and Registration in India

When it comes to the charitable, social, educational or religious purposes, individuals often choose between Trusts and Societies as the preferred forms of non-profit organizations in India. Both are recognized legal entities, yet they differ in their structure, governing laws and modes of functioning. Understanding these distinctions is crucial for founders, beneficiaries and stakeholders to ensure the right legal structure is chosen for long-term sustainability and compliance.

This blog explains the meaning, features, registration process and key differences between Trusts and Societies in India, helping you make an informed decision.

What is a Trust?

A Trust is a legal arrangement where the owner of property (the settlor or author) transfers it to another person or group of people (trustees) for the benefit of a third party (the beneficiaries). In India, public charitable trusts are usually established for purposes like education, medical relief or advancement of religion.

Trusts are governed by:

• The Indian Trusts Act, 1882 (mainly for private trusts), and
• State-specific public trust laws for charitable or public trusts (e.g., the Maharashtra Public Trusts Act, 1950).

Features of a Trust

• Creation by Trust Deed – A written trust deed is the foundation document.
• Settlor and Trustees – At least one settlor and two trustees are generally required.
• Beneficiaries – The trust is created for the welfare of beneficiaries (public or private).
• Property Transfer – The trust must hold property or assets that are transferred for its objectives.
• Permanence – Once assets are transferred to a trust, they cannot be taken back.
• Management – Trustees manage the trust without direct interference of members or external bodies.

What is a Society?

A Society is an association of individuals who voluntarily come together to promote charitable, literary, scientific, educational or cultural objectives. Unlike trusts, societies are member-driven and operate more democratically.

Societies in India are governed by the Societies Registration Act, 1860, and state amendments (where applicable)

Features of a Society

• Formation by Memorandum of Association (MOA) – It contains the name, objects, members and governing rules.
• Minimum Members – At least seven members are required to register a society.
• Democratic Setup – A managing committee or governing body elected by members runs the society.
• Flexibility – Easier to add or remove members compared to trusts.
• Objectives – Societies are commonly formed for promotion of art, culture, education, research, sports or welfare activities.
• Accountability – Societies require periodic filing of reports and accounts with the registrar.

Registration of a Trust in India

• Drafting the Trust Deed – Contains the name, address, settlor details, trustee details, objects and property details.
• Stamp Duty – Pay applicable stamp duty depending on the state.
• Submission – Submit trust deed with identity/address proof of settlor and trustees to the local registrar.
• Registration – Registrar verifies the document and issues the certificate of registration.
• PAN, TAN and 12A/80G – Apply for PAN, TAN, and income tax exemptions after registration.

Documents Required for Trust Registration:

1. Trust deed (on stamp paper)
2. Passport-size photos of settlor and trustees
3. ID and address proof of settlor and trustees
4. Address proof of registered office (with NOC from owner if rented)

Registration of a Society in India

• Prepare MOA and Rules & Regulations – Draft objectives, working procedure, membership rights, etc.
• Minimum Members – At least seven members; in case of national-level societies, members from different states are needed.
• File Application – Submit MOA, rules, affidavits and documents to Registrar of Societies.
• Approval – Registrar reviews and issues certificate of registration.
• Compliance – Annual filing of reports and accounts is mandatory.

Documents Required for Society Registration:

1. Memorandum of Association (MOA) signed by members
2. Rules and regulations of the society
3. ID and address proof of members
4. Passport-size photographs of members
5. Proof of registered office with NOC

Key Differences Between Trust and Society

Which One Should You Choose – Trust or Society?

The choice between a trust and a society depends on the objectives and governance preferences:

1. Choose a Trust if:

• You want stability and long-term management of assets.
• You are creating a religious, charitable or educational foundation.
• You prefer centralized control with trustees.

2. Choose a Society if:

• You want a democratic and membership-based organization.
• Your focus is on activities involving participation, such as cultural, educational or social welfare initiatives.
• You need more transparency and accountability to members.

Conclusion

Both Trusts and Societies are important legal structures for non-profit activities in India. While a Trust is asset-based and more permanent, a Society is member-driven and democratic. The registration requirements, management styles and compliance obligations vary, so the decision should align with the vision and functioning style of the founders.

For long-term asset management and religious/charitable purposes, a Trust is often more suitable. For participatory and community-based initiatives, a Society may be the better option. If you require professional assistance, feel free to contact CRSPL Business Consultants they will guide you from the scratch.

Careful consideration of objectives, governance style and compliance requirements will ensure that the chosen structure helps fulfil the intended mission effectively and sustainably.