DIFFERENCE BETWEEN TRUST AND SOCIETY AND NONPROFIT COMPANY. Features Trust Societies U/s 25 Company / Nonprofit Company Set up and running Cost Nominal Nominal Comparatively More Charter Trust Deed By laws and Rules & Regulation Memorandum of Association and Article of Association Basic Document Trust Deed - which contains objects of the trust (bye-law) Memorandum of Association Articles of Association with rules & regulations. Memorandum of Association Articles of Association Formation procedure Very Easy Simple Little Hard Jurisdiction Deputy Registrar / Charity Commissioner Registrar of Societies - For Maharastra Charity Commissioner Registrar of Companies Legislation / Statute Indian trust Act,1882 Societies Registration Act 1860 Indian Companies Act 1956 Objects Social benefits & Charitable, Religious, Wellfare of the member, Families, Debenture redemption trust, Employee Welfare trust. Ex. PF Trust, Superannuation Trust etc Literary, Charitable, Scientific and resource oriented, Health and any social purpose. Non profit Activities Re-ammendment or Modification of Objects Alteration can be undertaken only by the Founder or settler. If the founder deceased alteration of objects is impossible Easy Legal Procedures Complicated Legal Procedures Legislation / Statute Required Members Minimum = 2 Maximum = No limit Minimum = 7 Maximum = No limit Minimum = 7 Maximum = No limit Nature of control One man control, i.e. Settler Democracy system Board of Directors & Management committee Registration As Trust with the Registrar. As Society with Society Registrar - Both as a society and a trust in some states. As per Companies Act under Section 25 Stamp Duty 4% of Trust property Value will be executed in non judicial stamp paper with the registrar No stamp paper required for Memorandum of association, and rules and regulations. No Stamp paper required for Memorandum of association and articles of association. Name Very easy to choose Very easy to choose Prior approval required from Registrar of Companies Bank a/c operation One person, Settler Two persons, either President or Secretary and Treasurer As Authorised by Board of Director Family Member Can become trustee Objection in becoming members of the Governing Body Can Be Directors Management Board Trustees Governing Body Board of Directors & Management committee Succession in Management By Election By Election By Appointment Meetings No provisions Annual Meeting As per Law. Governing Body meeting as per the rules of Society. Quite Extensive as per the provision of Company Law Legal Status Limited Legal Status Limited Legal Status. Full Legal Status Example Mother Teresa Charitable trust, Amar Jyoti Charitable Trust Trade Associations ITC Ltd, NTPC LTD, TCS LTD Statutory Regulations Nominal Limited. Maturable - Exhaustive Membership Transfer Nominal Impossible. Impossible Free or Control as per desire. Member Admission Not applicable Governing Body Control . General Body or Board Control through issue of Capital. Dissolution or Take over by State Possible Possible Very risky and difficult. Payment to Members As notified in Trust deed Not restricted As approved by Company & State. Penalties Lesser penalties Lesser penalties Higher Penalties Eligible for Income Tax Exemption after Registration u/s 12A & 80G Eligible for receiving Foreign Contribution after Registration under FCRA Eligible for receiving Govt. grants and benefits Profits shall not be distributed to the Trustee/ Members/ Directors
Posted on: Fri, 19 Jul 2013 21:16:25 +0000
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