Societies and Trusts

A society or a trust is the legal body that owns and runs most educational institutions in India. A society is registered under the Societies Registration Act, 1860 or the corresponding State law. A public trust is registered under the public trusts law of the State concerned, such as the law administered by the Charity Commissioner in Maharashtra. A company incorporated under Section 8 of the Companies Act, 2013 is the third common form, and is used when the promoters want a company structure with a not-for-profit object.

The choice of structure affects who controls the institution, how trustees or members are appointed, what a regulator will accept as a sponsoring body, how income tax exemption is claimed and how disputes are decided. The founding document, whether a trust deed, a memorandum and rules, or a memorandum and articles, should be drafted with the future of the institution in view: succession of trustees, powers to borrow and to hold land, dealings with related parties and the manner of amendment.

Registered bodies must also file returns and accounts, maintain registration for tax exemption and obtain permission for certain dealings in property under the State law. Governance disputes between trustees or members are common. Depending on the structure, such disputes are decided by the Charity Commissioner, the Registrar, the civil courts or the National Company Law Tribunal.

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This page gives general information only and is not legal advice.