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Difference between Section 8 company and Trust Registration

Section 8 Company-These are companies or organizations are also known as the Non-Profit Organization can be registered as the society. Companies under Section 8 mainly follows Companies act, 2013.A special license is granted under section 8 to drop the words ‘Private Limited’ or ‘Limited’ from their name.

Trusts are the forms of charitable organization which can be Public or Private Limited. In these organization private company are formed for family welfare. These kinds trust are not charitable trust governed by Indian Trusts Act. This Act is not applicable to public trusts.

In the case of the public, a person wants to dedicate their own property to specific cause. In this fundraising is not suitable when you want to raise funds from the public for the trust’s activities. Trust formed anywhere in India can operate all over in India. The company should be the charitable object.   

Applicable Act

Section 8 Company works under Indian Company Act,2015 whereas The Trust is governed by The Indian Trust Act, 1882. 

Instrumental documents

Section 8 company’s main instrument are Memorandum of Association and Article of Association which has certain rules and guidelines which should be strictly followed. In Trust deed is the main instrument because the trust is established for humankind.

Members Required

Section 8 Company should have minimum of 2 members and for a private company and 7 members for the public company and managed by the director whereas in Trust there is a requirement of only 2 trustees and there is No upper Limit. Trust is controlled by the trustees.

Jurisdiction and Stamp duty

Section 8 follows the jurisdiction of the power to register lies in the hand of Regional Director & Registrar of Companies of the concerned state. Whereas trust follows jurisdiction of Deputy Registrar/Charity commissioner of the relevant area.

There is no requirement of stamp duty in Section 8 Company for the MOA and AOA whereas in a non-judicial stamp is required which vary state to state.

Time for registration

Section 8 Company takes 60-75 days to get registered and can be dissolved but the Trust takes 15-20 days and it is irrevocable.

Annual Compliance

In Section 8 Company there is no requirement of annual compliance by the filing of annual accounts and the return of company with the ROC. Whereas trust does not require any annual return filing.

Case of inactiveness

In section 8 upon dissolution, all debts, liabilities, funds and property of the company may not be distributed among the members of the company. Funds need to be transferred to other section 8 company preferably similar objects as the dissolved entity. Whereas the Trust becomes inactive in case negligence of trustees. Some steps can be taken trustees by the Charity Commissioner Object of trust is a difficult job.

Get Trust Section 8 Company Registration through Registrationwala






Types of Companies under Ministry of Corporate Affairs

Ministry of Corporate affairs is an Indian ministry that is primarily concerned with Companies Act, 2013, Companies Act, 1956, Limited Liability partnership act 2008 and other  rules and regulations. The responsibility of this Ministry is regulation of Indian enterprises in Industrial and Services sector.

Companies can be registered in India

Private Limited Company-It is the type of company recommended for Business. The cost of registration of the private limited company is cheaper than other forms of a company. Private limited should have a minimum of 2 members and can have maximum 200 members. In this company liabilities are limited and it has some features of a partnership.

People mostly prefer this of the company for fundraising. The degree of operation and ownership can easily separate in this type of company. Business can be exited without any hassle. In this members are limited to only contribute towards a number of shares.      

One Person Company-It is the type of company which can be started by a Single member.OPC is the latest form of company in Companies Act, 2013. One person can become the director as well as the shareholder. Similar to the private limited company as the degree of operation and ownership are on the separate basis. 

OPC gives wings in the hand of Sole proprietor to form the company under with full control. It is done without any interference of the third person. This type is easy for an entrepreneur to directly target the market. Fundraising from banks and the financial institution is easy. People who are Indians and resident in India can form OPC.     

Public Limited Company-This is a publicly held company. A large amount of capital investment can easily be obtained. These types companies are considered to be a more transparent business model as compared to other business structures. Investors get the choice of transferring their ownership in the company without any hassle by just selling the shares.

Section 8 Company-These companies are basically formed to encourage arts science, sports, education, research, social welfare, religion, charity, etc. These kinds businesses do not play any vital role in profit. Company Intends to prohibit the payment of any dividend to its members. These companies are the non-profit making company.

Section 8 company was incorporated mainly for welfare purposes. Previously, it was defined as Section-25 Company. Due to commencement of Companies act, 2013 it was called as Section-8 Company

Nidhi Company- Nidhi Company comes from the Hindi word ‘Nidhi’ means fund. These are the  NonBanking financial corporation. These are also known as mutual benefit funds. Nidhi company is known in the corporate scenario is member benefits company. Companies are formed for the welfare of the members and to increase saving habits.  

Other types of Companies

There are some more types companies which can be registered in India.

  • Companies that have unlimited liability
  • Producer Company
  • Joint Venture Company
How to Protect Your Business

However the type and size of business, it is valued by its owner(s) and as the business grows, the bigger the value gets and hence higher the protection needed. The owner must understand the vulnerability that comes along with the success of a business, such as with success comes competition, risks, legal obligations, reputation sustenance, vigilant, etc. 

An owner must be prepared to face the difficulties that come in building a successful business. There are no strict rules to be followed, however, certain aspects of protecting ones business remain constant in all cases. 

Protection against legal threats 

  • Physical assets are one of the most important assets of a business as they are worth a lot of money. For example, they not only include the office space but also the things that fill up the office. All physical assets belonging to the business must be insured to avoid any loss in case of any natural disaster or theft.
  • A legal attorney who is well versed with local laws and policies must be hired to handle any legal actions that may arise at any time of the business operation. A legal attorney will also help in foreseeing any potential legal threat and help in implementing the task at hand accordingly.
  • In case of sole proprietorships, it is important that the owner separate its personal assets from that of the business. Any attack on the business finances will directly impact the personal finances in case the separation is not clearly defined and limited. 

Organize your Finances 

  • Finances of a business must be documented and organized time to time to avoid any threats not only from the outside but also from the conflicts that may rise among the stakeholders of the business.
  • Hiring an accountant is a good start to protecting finances.
  • Finances in sole proprietorships must be specially monitored as the finances of the business may be linked with the personal finances. It is preferred and suggested to keep both the finances separate to avoid loss on the other when one is under attack. 

Protection against technological threats 

  • Technology has reached such heights that it is difficult to run a business without a strong technological support. This may include software that is needed in every domain of running a business. For example, a good software system is needed not only for business documentations but also strong software is needed to run a security check in the office space. Considering the high level cyber attacks and crimes in todays’ times,protection of such technology is needed to protect the business.
  • Protection of intellectual property is highly critical to avoid risking any legal action and theft from any seekers. Trademarks and copyrights are also a major part of technological assets and if these are not protected, they can land a business in a lawsuit against their favor. There are experts available to help protect a business trademark, copyrights, and intellectual property.
  • An IT expert must be hired to ensure any technology used and applied in a business is highly protected from hackers and cyber criminals. 

Protection against reputation threats 

  • Running a business successfully requires that it makes its presence felt in the market at almost all times. Offline marketing that includes display of brand on its products or service material and online marketing that includes its presence on social media platforms are one of the most common and beneficial marketing techniques. Hence, the representation of the business on such platforms must be protected. Simply by using the right language favoring in the progress of business is protecting the business.
  • A social media manager or public/business relations’ manager understands the operations of such platforms to help maintain the reputation of the business. Hiring of such an expert will help the business from being attacked by any reputational threats that are sometimes the most probable causes of the downfall of a business. 

Protecting a business can be a task but the efforts will make the success of a business only smoother. If the above major aspects are taken care of, the business is well protected and any hassle on its way of progress can be dealt with ease.


Every entrepreneur will agree that the procedure of incorporating a Company can be tedious and cumbersome despite the necessity of the steps involved. Even though, a Company can now be incorporated online as well as offline, the steps remain the same. 

The government of India has taken a significant step in easing the procedure of incorporation of a Company. On the occasion of Gandhi Jayanti, the government launched SPICe that is simplified proforma for incorporating Company electronically. 

Ministry of Corporate Affairs has simplified the procedure by introducing filing of pre-dated Memorandum or Articles of Association electronically. It will further simplify the earlier procedure of incorporating a Company using form Inc-29. As per the latest update, earlier forms may be replaced with newer SPICe form Inc-32. 

There are certain features of SPICe that are as follows. 

  • Simplified and completely digital form of Company incorporation
  • Standard format of Memorandum and Articles of Association
  • Memorandum and Articles will now be filed as linked e-forms
    • For Memorandum of Association, an applicant must only copy paste the necessities
    • For Articles of Association, an applicant may choose the clauses that are applied and choose that are not applied or need alteration
  • Provision to apply for Company incorporation with a preapproved Company name
  • Digital Signature Certificates of subscribers and witnesses will now be affixed
  • Detailed and informative Inc-32 as compared to older form Inc-29
    • Older form, Inc-29 fulfills all purposes of Company registration that is application for DIN allotment, reservation of Company name, incorporation and even PAN and TAN
    • New form, Inc-32 provides the same facility, further including the filing of Memorandum and Articles of Association electronically 

This initiative is a bold step and will increase gains with faster review of Memorandum and Articles of Association making SPICe the sole procedure to incorporate a Company in India.

Looking for company registration? Connect with us at This email address is being protected from spambots. You need JavaScript enabled to view it. or Call us at +91-8882580580


Section 8 Company Activities

Section 8 companies are special entities under the Companies Act, 2013. These entities are specifically formed to promote some special objectives. Unlike the other corporate entities, purpose to register section 8 companies is altogether different.

Section 8 companies are similar to the concept of non-profit organisation with only difference is that section 8 is treated as company form which is registered under the companies act. Therefore, it is called special entity.

Main activities or we can say purpose to register section 8 companies are to promote science, culture, sports, art, education, research, social welfare, religion, and many more and objectives of all these activities are not profits.

Salient features of Section 8 Companies

  • Profits of section 8 companies are utilised only for its objectives
  • Members don’t receive any dividend
  • You can not incorporate section 8 companies through filing form INC-29.
  • Unlike formation of other companies, there is an additional requirement to obtain a license from the Central Government.
  • “Pvt Ltd” word can not be used in the name of section 8 company.

Relevance of Section 8 companies in current era

Since the inception of Corporate Social Responsibility (CSR) provisions, specified companies which are come under the ambit of CSR provisions are required to spend at least 2 of their average net profit made during the last three years on certain activities which are further prescribed under the Schedule VII, so now the companies have started incorporating the section 8 companies to do CSR activities through Section 8 companies because if you compare the activities of section 8 companies and CSR spending areas are almost same.

Having said that section 8 company’ incorporation is not an easy process. Besides the normal process of registration, there is one extra requirement to obtain the license from the central government, which is no longer an easy task to obtain. Therefore, registration of section 8 companies takes longer times than other companies’ formation such as public limited companies, private limited companies, one person companies etc

Apart from these essential points, there are certain privileges which are only available to section 8 companies, which are as follows:

  1. Minimum paid capital requirement is not applicable to section companies in India.
  2. Section 8 companies may call annual general meeting by serving shorter notice of 14 days.
  3. The provisions related to minimum & maximum number of directors on the Board along with requirement of passing a special resolution to hike the limit of maximum number of directors shall not apply.
  4. Section 8 companies are not required to appoint Independent director.
  5. Holding directorship in the Section 8 companies shall not be counted while calculating maximum number of directorship in the companies.
  6. Section 8 Companies are required to hold only 2 board meetings in a calendar year instead of 4 board meeting.

So, if your purpose resembles section 8 company activities then you must go for incorporating section 8 companies for the society upliftment.

Features and Objects of Section 8 Company

Section-8 Company- It is basically a non-profit making company, incorporated mainly for welfare purposes such as promoting education, eradication of poverty and so on. Previously it is defined as section-25 Company but with the commencement of Companies Act, 2013 the same falls under section-8 and known as section-8 Company. To form a Non-profit organization one can choose any one of the following routes i.e. Trust, Societies, Section-8 Company. Such company can not declare dividend to its members and it is the responsibility of the company to ensure that profits of the company utilize only for promotion its objectives.  

 We all are familiar with the incorporation process of  private company, public company, once person company & Nidhi company but have less knowledge about section-8. To grab, the full information regarding such company we have to go through  the following question;

Feature of section-8 Company

There is confusion amongst the investor regarding section-8 company to clear all the doubts it is necessary to know whole about this company. It is a non-profit making company, mainly to promote welfare in the country.  

Incorporation process of section-8 company

The incorporation process is divided into 3 steps;

  1. Name Approval- Application is filled to ROC via form INC-1.
  1. Application to ROC for grant of license under section-8- Within 60 days from the date of filling application regarding name approval, application is to be file to ROC to grant of license via form INC-12.
  1. Filling Incorporation documents- After obtaining license, the incorporation process starts by filling various forms.

How to form Section-8 Company

The process of registration of section-8 company is little bit complex, as the approval of central government required to registered the same.

Advantages for having a section-8 company

The main advantages of section-8 Company is that it can be registered as private company or public company without using the word limited or private limited at the end of its name. The number of members varies according to the nature of such company i.e. if such company formed as private limited company minimum 2 members required and in case of public company 7 members required.

Main objects of section-8 Company

These companies are formed only to promote art, commerce, science, sports, education, research, social welfare, religion, charity, protection of environment or any such object related to the same.

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