By CA Ved Mittal Ved & Associates

 Trust  Society  Section 8 Company ( Section 8 of New Company Act 2013 )  Special Licenses.

 The Following Laws or constitutional Articles of Republics of India are relevant to the NPO ◦ Article 19(1) ( c ) and 30 of the constitution of India ◦ Income tax Act 1961 ◦ Public Trust Act of Various States and Indian Trust Act ◦ Society Registration Act ◦ Section 8 of Indian companies Act 2013 ◦ Foreign Contribution Regulation Act 2010

 There are Two Types of Trust ◦ Public Charitable/Religious Trust. ◦ Private Family Trust (AOP).

 The Registration for a Trust, whether in relation to a movable property or an immovable property is optional but always desirable.  A Registered Trust Deed has certain advantages which are listed below ◦ A registered Trust Deed is an official document which carries support and force of Law ◦ It effectuates transmutation of Possession ◦ A Conveyance of Trust proper to trustee under a Registered Deed is generally not open to Challenge.

 These trust are registered under the Sub- Registrar as per the area of the registered office of the trust.  Requirements:- (i) Settler:- Who creates the trust. (ii) Trustee:- Who look after the trust. Minimum 2 (iii) Initial Corpus Fund / Trust Property.

The Following mentioned Papers need to be submitted at the Office of Sub- Registrar  Two copy of the Trust deed with duly signed and photo of settler and trustees  Address proof of the registered office with NOC  Address proof of Settler and Trustees  A Pay order of Rs. 1100/=  Two witness  All other procedure as same as you purchased the property and transfer

 Key points to be remembered:- ◦ Name of the Trust. ◦ Name of the Settler. ◦ Name of the Trustees. ◦ Initial Corpus Fund. ◦ Main Objective of the Trust. ◦ Ancillary Objective. ◦ General Body. ◦ Executive Committee. ◦ Quorum. ◦ Operating Bank Account. ◦ Dissolution.

 Searching the Name of Proposed Society.  Two copy of the Bye-Laws with duly signed by all initial Members.  Address proof of the registered office with NOC  Address proof of all initial Members  A Receipt of Rs 50/=  All the papers has to be notarized.

 Key point to be remembered ◦ Name of the Society. ◦ Work Scope within state or Whole of India. ◦ Main Objective. ◦ Ancillary Objective. ◦ General Body. ◦ Executive Committee. ◦ Quorum. ◦ Operating Bank Account. ◦ Dissolution Clause.

 Registration Procedure:- (i) Availability of name :- in form no INC-1 applies with the ROC as normal name application for companies. (ii) Application for License :- After approved name we file application for License in form no INC-12 with the following documents. 1. Draft Memorandum of Association as per form INC Draft Article of Association

ii. Application for License ( continued ):- 3. Declaration in form No INC-14 ( Professional Declaration ). 4. Declaration in form No INC-15 ( Directors Declaration ). 5. Estimated income & Expenditure for next 3 years 6. Approval/ concurrence/ NOC of the concerned Authorities 7. Copy of Resolution Passed in General Meeting and Board Meeting. 8. Assets & Liabilities Statements with their values as per applicable Rule. 9. List of Proposed Promoters. 10. List of Proposed Directors. 11. List of key managerial personnel.

(iii) After Receiving License we file following form Form HeadingCompanies Act 1956 Companies Act 2013 Application for incorporation of the company ( other than OPC ) Form – 1Form – INC-7 Notice of Situation or change of situation of Registered office Form- 18Form-INC-22 Particulars of appointment of Directors Form-32Form- DIR-12 Registration Procedure ( contin…..)

Differential factorsTrustSociety Company ( Sec 8 ) Basic Document Trust Deed - which contains objects of the trust (bye-law) Memorandum of Association Articles of Association with rules & regulations. Memorandum of Association Articles of Association Formation Very Easy Easy Little Hard Jurisdiction Deputy Registrar / Charity Commissioner Registrar of Societies - For Maharashtra Charity Commissioner Registrar of Companies Legislation / Statute Relavent state Trust Act - Bompany Public Trust Act 1950 Societies Registration Act 1860 Indian Companies Act 2013 Objects Social benefits & Charitable Social Benefits & Charitable Nonprofit Activities Authority For Registration Sub- Registrar of SocietiesRegistrar of SocietyRegistrar of Company

Differential factors TrustSociety Company ( Sec 8 ) Re-ammendment or Modification of Objects Can be done by Trustees but Procedure u/s 92 of code of civil procedure be required by Members in governing body meeting with Special Resolution Complicated Legal Procedures Required Members Minimum = 2 Maximum = No limit Minimum = 7 Maximum = No limit Minimum = 2 /3 Maximum = No limit Registration As Trust with the Registrar. As Society with Society Registrar - Both as a society and a trust in some states like Maharastra. As per Companies Act under Section 8 Stamp Duty As per the Stamp duty Act of relevant State of Trust property Value will be executed in non judicial stamp paper with the registrar No stamp paper required for Memorandum of association, and rules and regulations. No Stamp paper required for Memorandum of association and articles of association. Name Very easy to choose Prior approval required from Registrar of Companies.

Differential factors TrustSociety Company ( Sec 8 ) Management BoardTrusteesGoverning Body Board of Directors & Management committee Voting Rights Equal rights to all Trustee Equal Rights to all Members Depand on share Holding Succession in ManagementBy AppointmentBy ElectionBy Appointment Meetings Board of Trustee Meeting Annual Meeting As per Law. Governing Body meeting as per the rules of Society. Shareholder / Directors Meeting Membership Transfer By Nomination Transfer as per Companies Act. Member AdmissionPossible Governing Body Control General Body or Board Control through issue of Capital. Dissolution or Take over by StatePossible As Per Companies Act 2013 ComplianceLowMediumHigh Filling the Suit by outsiderIn the name of Trustee In the name of Governing BodyIn the name of Company Annual documents to Be filedNo Such Requirement Annual Audited Accounts and List of Governing Body Annual Return and audited Accounts