Pranav Nagar (Manager) (71 Points)
02 March 2012Hello,
I would like to know if a Trust can be a Promoter of any Company (Private or Public). Though Companies Act does not define 'Promoter', if I go by SEBI (ICDR) Regulations does define a promoter.
would be glad with any help provided. Thanx.
Ajay Mishra
(Company Secretary)
(74342 Points)
Replied 03 March 2012
As per shareholding pattern of the listed company it specify trust in 2(c) of the shareholding pattern submitted to stock exchange. On the basis you can say that a trust can be apromoter subject to some terms and condition.
Society/Trust as a member
Department Clarification- A society registered under the Society Registration Act, 1860 should not be deemed to be a ‘body corporate’ within the meaning of the section 2(7) of the Companies Act, although such a society can be treated as a ‘person’ having separate legal entity apart from the members constituting it and thereby capable of being a member of a company under section 41(2) of the Companies Act, 1956. [Circular Letter, dated-24-11-1962]
Shares belonging to society held in the name of trustee simpliciter
Department Clarification-In 1957 the Department of Company Affairs was advised that the shares in the company, being the property of a charitable trust, can be held in the name of the trustee. (Extracts from Department’sFile No. 1(43)-PT/67)
Regards
CS Ajay Mishra
Law Student
(Law student)
(1 Points)
Replied 25 May 2016
As per the definition of promoter as given in Section 2(69) of the Companies Act, 2013 a promoter needs to be a person. A person can be jurisitic or natural. Now on the other hand, a trust doesn not have any legal identity. It is literary a confindence reposed by one person in another to carry out certain task for another. It is not a legal entity as that of a scoiety, partnership or company. Hence, it can be a jurisitic person and therefore can't be a promoter.
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 30 May 2016
But the word 'person' is not defined in Companies Act. Hence we have to refer to the definition given in Section 3(42) of General Clauses Act 1897 which reads as under:
(42) “person” shall include any company or association or body of individuals, whether incorporated or not;
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