For the easy understanding of an NGO as a Trust, Society or a Company I have formulated various requirements, objectives, merits and demerits of all three as follows:
• As a Trust
An NGO can be registered as a Charitable Public Trust. There is no common National Act governing Trusts but the trusts are governed by various State Acts for example Bombay Charitable Trust Act. Generally an NGO is registered as a Trust when property is involved, especially in terms of land and building. In a trust it is a minimum requirement to have at least 2 trustees. However its everyday functioning can be done by a single trustee who is also known as the settlor.

A Trust Deed has to be formed with all the information about the Trust, the objectives have to be stated clearly and thoroughly for the smooth functioning of the trust. All Trusts are allowed to work on an all India level therefore for expansion you would not need to register it in more than one states.

Trust Income is exempted from The Income Tax Department but a certificate under section 12A has to be obtained. Donations are also exempted but for that the certificate under Section 80G is required from the Income Tax Department. For foreign funds FCRA ((Foreign Contribution Regulation Act) certificate has to be obtained, which can be sought from the Home Ministry.

• As a Society
An NGO can be registered as a Society under the Societies Registration Act, 1860. The documents required for registration include a Memorandum of Association and Rules and Regulations wherein the aims and objectives of the society should be laid down. Minimum of 7 persons are required to form a society. These persons hold various designations for a specified period. A society can be set up only within a geographical area. To form a national level society there has to be at least 8 members out of which 5 should be from different states.

A society has the same exemptions as a Trust under the Income Tax Department. As well as the same regulations for foreign investments.

• As a Company
An NGO can be registered as a non-profit Company also. Under Section 25 as a charity, it is governed by Indian Companies Act, 1956. The required documents include the Memorandum of Association (MoA) as well Article of Association (AoA). It involves complicated legal procedures. A minimum of 3 members are required to set up a Company. A declaration that that the Memorandum and Articles have been drawn in conformity by a Chartered Accountant or an Advocate is necessary. Annual returns and annual accounts must be filed with the Registrar of companies annually. No minimum share capital is required to set up a non-profit Company.
It also has the same exemptions as a Trust and Society under the Income Tax Department as well as same regulations for foreign investments.
Observing the above facts donations would be ruled under the same laws and require the same certificates for any of the three scenarios whereas expansion would be much easier in a Trust as it is recognised nationally without having to register under different states.

An NGO can be incorporated by way of trust, society or a non-profit company under section 25 of the Companies Act.

It is difficult to say which of the above, is the best form for an NGO of the specified description. As far as treatment for exemptions and taxation is concerned, there is no difference between the different forms in which an NGO can be registered. Most importantly, NGOs as a trust or society or company get exemptions under section 11 and 12 and 80G certificate of the Income Tax Act 1961 .

However, some of the things to be kept in mind while choosing any of the forms are that for a trust there needs to be minimum of two people as trustees whereas there are seven members required to register as a society. Also, the procedure for terminating or winding up a society is less complicated than the one required in a trust.

Trusts are generally the accepted form when there is property involved. There are state-level Acts regulating trusts. Societies are regulated under Societies Registration Act 1860 and other state Acts. Therefore, if the NGO is functioning as a trust or society in different States then the regulations of those States will be applicable to the NGO.

A company under Section 25 of the Companies Act 1956 can be incorporated for charitable purposes. While starting a company, a Memorandum of Association has to be submitted to the Registrar of Company. For a NGO, the Memorandum of Association must contain the purpose for which the company is incorporated. Also, since the Companies Act is a central Act, the expansion into other states would be smoother if the NGO is incorporated as a company. This is also because incase the NGO wants to receive donation from abroad for any purpose under The Foreign Contribution (Regulation) Act 2011 it has to register with the Central Government, accept contributions through designated bank and keep separate books of accounts with respect to receipts and funds.

All of this would be speedier and streamlined if the NGO is incorporated as a company. And the company also gives advantage of taking profit making activities as long as the profit is used for charitable purposes mentioned in the memorandum.
In the given case, since a the purposes of the NGO are not exhaustive and clearly specified, it is important that it is not curtailed by the limitation under section 20 of Societies’ Registration Act, 1860, wherein an exhaustive list of purposes for which the society can work is specified. Also, since a National Level Society would require member from different states, it is therefore suggested that in spite of the cumbersome registration process, company would be the best form under the given requirements.

I have started by explaining as to how you can register your NGO- society, trust or company. After that I have laid down the ways in which NGOs can accept donations. Every NGO in India is legally required to document a trust deed/ Memorandum of Understanding/ bylaws that contain the name and address of the NGO, mission and the objectives of the NGO, details of governing body members, human resource and staffing information, rules and regulations, administrative laws and procedures.
You may register an NGO under any of the following Acts:
– Indian Trusts Act- Under this Act, unless the Trust wants to claim income tax exemptions, it is not legally obliged to obtain registration. I will be elaborating upon Income Tax Exemption and Donations towards the end of my answer.

– Societies Registration Act- A society, though its formation is more complicated than a trust can be formed by a group of seven or more people. However it is more flexible when it comes to rules and regulations.

– Companies Act- Any sort of association or division which is formed for the promotion of art, science, commerce, religion or charity can be registered as a company. The Registrar upon an application in the prescribed form can register such a person or association of persons as a company. However any of the members of this assoctaion cannot be paid a dividend. All profits that are be earned are to be utilized for furthering the objectives and aims of the company.
NGO Registration in India-
NGOs in India can be registered under the Societies Registration Act, 1860. Charitable societies, military orphan funds or societies, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, etc. are some of the societies that can be registered under this Act. Some basic requirements need to be met before an NGO can get registered-
– A registration form, which is available without charge at the district registrar’s office (the format and requirement of the form varies from state to state)
– A Memorandum of Association (MOA) and rules and regulations of the organization
– Consent letters of all the members of the managing committee
– Authority letter duly signed by all the members of the managing committee
– Copy of rules and regulations certified to be a correct copy of original rules and regulations by at least three managing committee members
– A declaration by the members of the managing committee that the funds of the society will be used only for the purpose of furthering the aims and objectives of the society
All the documents mentioned above are required to be submitted in duplicate, together with the required registration fee in order to be registered. Upon receipt of the set of the above mentioned documents, the registrar’s office issues a certificate to the society once the verification procedure is complete. It is also essential that when you are filing these papers, that the name of the NGO which you are planning to keep is not already registered.
Society Registration in India-
In India, societies are governed by the Societies Registration Act, 1860. The main documents required in the registration of a society are Memorandum of Association (MOA) and Rules and Regulations (RR). Apart from them, the following conditions and points also need to be adhered to-
– Minimum seven number of people are required to form a society.
– The members such as President, Vice-President, Secretary and Treasurer, etc. collectively are called the Governing Body. This body directs and controls the functioning of the society.
Societies unlike trusts, function only within a specified geographical area. To make an all India level society, should have one member each from at least seven states of the Union of India. As per the Societies Registartion Act, the total number of members that are required to form an all India society are seven. In case there are less than seven members, then the society can be dissolved by the Court.

Registration of Trusts in India-
A Trust can either be a private or public. Private trusts are governed by the Indian Trusts Act (1882) and are used for private purposes, such as running of a private estate or institution and they do not receive any tax benefits by the Government of India. Since you want to run a Trust for helping children, then you can set up a public charitable trust. There is no central law that governs charitable trusts in India. However, a few states have enacted the Public Charitable Trusts Act (Like Bombay Public Trusts Act, 1950)
Trusts are required to be registered using a document called Trust Deed. This document contains all the information about the Trust. Along with these papers you also need to attach a Rs. 100 Non-Judicial stamp paper (which you can ideally get from a notary). All the Trustees and witnesses will have to give thumb impressions and signatures on these papers. You may also require a No-Objection Certificate (NOC) from the owner of the property where the registered office of the trust is to be situated. If you’re the owner of the property, then you don’t need to worry about NOC. The Trust Deed document, needs to contain the name and address of the Settler (person who is setting up the trust), other trustees, name of the trust, address of the registered office of the trust.
For registering a trust minimum two trustees (i.e. one settler and another person) are required. All the trustees together are called Board of Trustees and this board collectively governs the trust. All the trusts in India can function and are allowed to work at an All-India level.
Personally I feel that it depends which one of the above do you want to finally select. The best option according to me is to to settle in for a Trust for the kids, as this gives you an option to function pan India. With regard to getting donations, NGO can avail income tax exemption by getting themselves registered and complying with certain other formalities. The Income Tax Act has certain provisions which offer tax benefits to the “donors”. The Central Government approves certain NGOs and notifies them as eligible for project or schemes for the purposes of section 35AC. If an NGO succeeds in getting such an approval for its projects then it stands a very good chance of mobilising funds from the corporate and the business sector. Business houses making contribution to such approved projects are allowed the benefits of deducting such contribution as expenditure. Various NGOs give 100% Income Tax Exemption u/s 35AC or 80GGA of the Income Tax Act 1961 in India for the sponsorship donations to the donors, with an option being given to them to donate online as well.
For donors who receive income from the heads ‘business’ or ‘profession’, section 35AC of Income Tax Act 1961 is applicable for them and they get 100% Income Tax Exemption under it. Donors who get income from other sources, section 80GGA (2)(bb) provides 100% Income Tax exemption even though donations are made to projects qualified under section 35AC. A receipt issued under Section 35AC (in Form 58A) is valid for Section 80GGA as well. Donations can also be raised through internal sources (membership fees, sales, subscription charges, donations, etc.) or grants-in-aid from the Government, private organizations or foreign sources. Inflow of foreign funds is governed by the Foreign Contribution Regulation Act (FCRA) 1976.

References-
1- Section 8 of The Companies Act, 2013.
2- Dividends are yearly profits that are earned by the company at the end of a financial period or year, which are then distributed among the shareholders and other directors of the company.
3- How to start your own NGO in India, available at: http://www.wikihow.com/Start-Your-Own-Ngo-in-India, last accessed on 18th March, 2015.
4- Section 20 of Societies Registration Act, 1860.
5- How to register an NGO, available at: http://timesofindia.indiatimes.com/city/goa/How-to-register-an-NGO/articleshow/12526127.cms, last accessed on 19th March, 2015.
6- Society Registration, available at: http://www.delhi.gov.in/wps/wcm/connect/98f8250046a2ddbd902e915d9d3d91ee/Registration+of+Societies.pdf?MOD=AJPERES&lmod=-299975412, last accessed on 26th March, 2015.
7- Section 1 of the Societies Registration Act, 1860, available at: http://indiankanoon.org/doc/1700055/, last accessed on 27th March, 2015.
8- Section 13B of the Societies Registration Act, 1860.
9- Setup, Open and Start a Charitable Trust NGO in India, available at: http://timesofindia.indiatimes.com/city/goa/How-to-register-an-NGO/articleshow/12526127.cms, last accessed on 20th March, 2015.
10- Income Tax Privileges to donors u/s 35 AC, available at: http://www.incometaxforngos.org/sec-35ac.htm, last accessed on 19th March, 2015.
11- Ramkrishna Mission Student’s Home, available at: http://www.rkmshome.org/full_income_tax_free_donations.html, last accessed on 19th March, 2015.
12- Start your own NGO in India, available at: http://www.window2india.com/cms/admin/article.jsp?aid=3468, last accessed on 19th March, 2015.