Section 8 Company vs Trust
Section 8 Company vs Trust — which is better for your NGO?
Overview
When setting up a non-profit in India, Section 8 Company and Trust are the two most popular structures. Section 8 offers corporate governance and is better for large NGOs seeking CSR funds. A Trust is simpler to register and suits smaller charitable initiatives.
Head-to-Head Comparison
| Factor | Section 8 Company | Trust | Winner |
|---|---|---|---|
| Governing Law | Companies Act 2013 (MCA) | Indian Trusts Act 1882 (State Registrar) | Tie |
| Minimum Members | 2 members + directors | 2 trustees (author + trustee) | Tie |
| CSR Eligibility | Directly eligible under Schedule VII | Needs Section 8 partner for direct CSR | A wins |
| Governance Structure | Board of Directors — formal | Trustees — flexible | A wins |
| Compliance Burden | High — annual ROC filings | Low — only IT returns | B wins |
| FCRA Registration | Eligible | Eligible | Tie |
Data updated for FY 2025–26. Regulations may change — consult a professional before deciding.
Which Should You Choose?
Choose Section 8 Company if…
Choose Section 8 Company if you need CSR funding from corporates, want structured governance, or plan to operate at a large scale.
Get Section 8 CompanyChoose Trust if…
Choose Trust if you're running a smaller initiative, want simpler governance, or are setting up a private family trust.
Still not sure which to choose?
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Talk to an Expert — FreeFrequently Asked Questions
Common questions about Section 8 Company vs Trust
Section 8 Company is directly eligible under Schedule VII of the Companies Act for CSR funding. Trusts typically need to be partnered with a Section 8 entity or registered under 12A/80G. Section 8 is the preferred structure for NGOs seeking corporate CSR money.
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