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Trust vs Society vs AOP vs BOI vs Artificial Juridical Person – Complete Guide (Updated)

Choosing the right legal structure is one of the most important decisions for any group of individuals, founders, NGOs, or organizations in India. Each structure—Trust, Society, AOP, BOI, and Artificial Juridical Person (AJP)—serves different purposes, has different governing laws, and carries different tax implications.

This article provides a complete, practical, and updated comparison to help you decide the right form for registration or compliance.

1. TRUST

Meaning

A trust is a legal arrangement where the author (settlor) transfers property to trustees, who manage it for the benefit of beneficiaries or for a charitable purpose.

Types

  1. Private Trust – For specific individuals (family trust).
  2. Public Charitable Trust – For the public at large (NGOs, temples, old-age homes).

Governing Law

  • Indian Trusts Act, 1882 – Private trusts
  • Public trusts – Governed by respective state trust acts (Maharashtra Act, Gujarat Act, etc.)

Registration

  • Mandatory for charitable trusts
  • Registered with Sub-Registrar under Registration Act
  • PAN required
  • 12A/80G registration required for tax benefits

Key Features

  • Simple registration
  • Trustees have full control
  • Cannot have members, only trustees
  • No election process

2. SOCIETY

Meaning

A society is an association of individuals united for a charitable, literary, scientific, or social welfare purpose.

Governing Law

  • Societies Registration Act, 1860 (Central)
  • State-level amendments applicable

Registration

  • Minimum 7 members required
  • Registered with Registrar of Societies
  • By-laws & memorandum mandatory
  • Annual filings required with Registrar

Key Features

  • Democratic structure
  • Governing body elected annually
  • Greater transparency requirements
  • Used mainly for NGOs, educational institutions, welfare groups

3. AOP (Association of Persons)

Meaning

An AOP is formed when two or more persons join together to carry out a common objective, usually for business, profit, or a specific project.

Governing Law

  • Defined under Income Tax Act, 1961
  • No separate central law for creation

Registration

  • Not mandatory; can exist even without formal registration
  • Form 49A for PAN
  • Treated as a separate taxable unit

Key Features

  • Created mainly for business or professional ventures
  • Members share profits
  • Taxation can be:
    • Slab rates, or
    • Maximum marginal rate, depending on share determination
  • No legal “status” like a company or trust

4. BOI (Body of Individuals)

Meaning

A BOI is similar to AOP but formed only by individuals (no company, firm, HUF can be a member).
Usually created for non-business activities, e.g., joint inheritance, joint property income.

Governing Law

  • Defined under Income Tax Act, 1961

Registration

  • No mandatory registration
  • PAN required

Key Features

  • Not formed for profit
  • Mostly arises due to inheritance or natural grouping
  • Doesn’t have legal existence like a trust or society

5. ARTIFICIAL JURIDICAL PERSON (AJP)

Meaning

An Artificial Juridical Person is an entity that is not a natural person, but the law gives it a separate legal identity.

Examples:

  • Deities in temples
  • Universities
  • Government bodies
  • Statutory authorities
  • Certain legally recognized institutions

Governing Law

  • Recognized under Income Tax Act, 1961
  • Status depends on the law that creates the entity

Registration

  • PAN required
  • Compliances depend on parent statute

Key Features

  • Can own property
  • Can sue and be sued
  • Not created by agreement but by law or recognition

6. FULL COMPARISON TABLE

ParticularsTrustSocietyAOPBOIAJP
PurposeCharity or private benefitCharity, education, welfareBusiness/projectNon-business, inheritanceLegal recognition under law
Governing LawTrusts Act / State ActSocieties ActIncome Tax ActIncome Tax ActStatute / Income Tax Act
Members RequiredTrustees onlyMinimum 72 or more2 or more individualsNot applicable
RegistrationWith Sub-RegistrarWith Registrar of SocietiesNot mandatoryNot mandatoryBased on law
Legal StatusSemi-legal entityLegal entityNot separate legal statusNot separate legal statusSeparate legal entity
ControlTrustees controlElected governing bodyMembers jointlyIndividuals jointlyLaw-created body
Suitable ForNGOs, temples, trustsNGOs, associationsBusiness/professional groupsJoint income activitiesUniversities, deities, govt bodies
Taxation12A/80G applicable12A/80G applicableSlab/MMRSlabFlat rate/varies

7. WHICH ONE SHOULD YOU CHOOSE? (Practical Guidance)

For NGO / Charity / Public Welfare

✔ Society – Best for democratic functioning
✔ Public Charitable Trust – Best for long-term control
✔ Section 8 Company (not covered here but best for corporate-level governance)

For Family/Religious Purposes

✔ Private Trust

For Business/Project Partnership

✔ AOP

For Joint Inherited Property Income

✔ BOI

For Universities/Temples/Govt Bodies

✔ AJP

Conclusion

Each entity type has a unique purpose, structure, and tax treatment.
Choosing the right form depends on objective, control, compliance level, and future growth plan.

For NGOs, Trusts and Societies are ideal.
For business or joint ventures, AOP works better.
For inherited income, BOI is the default.
And institutions created by law fall under AJP.

This guide ensures you understand all structures clearly and can make an informed decision.

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