Comparative analysis between Social Sector Entities- Section 8 companies and Trusts

– Team Corplaw |

Social sector entities can be of various types like a section 8 company, trust, societies, etc. The common idea behind these entities is the promotion of social welfare activities. Even with the common objective in place, there are various differentiating features between them. This write up is a comparative analysis between two types of social sector entities – Section 8 company and a trust.

A.  Companies with Charitable objects (Sec 8 under the Companies Act, 2013)

The concept of non-profit making organizations or companies with charitable objects in India is quite old as it traces its history to the early 20th century. This concept was first introduced under the Companies Act 1913, then under the Companies Act, 1956. Now, under the Companies Act, 2013 (hereinafter “the Act”), the provision for setting up of non-profit making organizations are enumerated under section 8 of the Act read with Rule 19 and 20 of Companies (Incorporation) Rules, 2014.

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