As we all know that profit oriented businesses can be formed through various types, in the same way charitable organizations can also be various types. It depends most importantly on scale of work that defines the structure. An NPO can be formed as Trust, as a society or as a company. One can also work individually as proprietor on micro basis towards social welfare activities. Now, let us discuss all the ways one by one:
- Trust: Public Trust or Charitable Trust can be formed. In most cases, there is usually 1 author who makes the trust. However there may be more than 1 author also. Trustees are those who manages all things, operates bank accounts, do the transactions on behalf of trust etc. Beneficiaries can be general public and proper objects should be mentioned while filing for its registration such as education, healthcare, women empowerment etc. Minimum 2 trustees are mandatory and author cannot be trustee. It is a physical application process.
- Society: Just like in case of company, in case of society also, Memorandum and Articles of Association is made as per Section 2 of Societies Registration Act, 1860. Many States have formed there separate rules which also have to be considered. Minimum 7 persons are required to form society whose names, addresses and signatures are mentioned therein along with their positions. The process is physical as well as online.
- Company: A Section 8 company can be formed for charitable objects with minimum 2 members (in case of private limited) and 7 members (in case of public limited). Minimum 2 directors are required for private limited while 3 directors for public limited. The process is online. One thing has to be kept in mind while selecting this structure that it is not considered a small company, hence various periodic compliances have to be done as per Companies Act, 2013 so howsoever small scale it may work, someone has to be designated for the law part.
