anand (Administrative officer) (185 Points)
17 October 2011Can someone give me pro and cons (and also other points like taxes, exemptions etc) for forming a legal entity for education, religious, charitable purposes with respect to - a Public Trust & a Section 25 company?
In other words, what are points of differences between a Public Trust & Section 25 company for creating a legal entity for educational, religious, charitable purposes ?
Ajeet
(CA)
(239 Points)
Replied 17 October 2011
Comparision among Trust, Society and Non profit Company
| Trust | Society | Section-25 Comapny | |
| Statute/Legislation | Relevant State Trust Act or Bombay Public Trusts Act, 1950 | Societies Registration Act, 1860 | Indian Companies Act, 1956 |
| Jurisdiction | Deputy Registrar/Charity commissioner | Registrar of societies. | Registrar of companies |
| Registration | As trust | as a society and as a trust | As a company u/s 25 of the Indian Companies Act. |
| Registration Document | Trust deed | Memorandum of association and rules and regulations | Memorandum and articles of association. and regulations |
| Stamp Duty | Trust deed to be executed on non-judicial stamp paper, vary from state to state | No stamp paper required for memorandum of association and rules and regulations. | No stamp paper required for memorandum and articles of association. |
| Members Required | Minimum – two trustees. No upper limit. | Minimum – seven managing committee members. No upper limit. | Minimum three trustees. No upper limit. |
| Board of Management | Trustees / Board of Trustees | Governing body or council/managing or executive committee | Board of directors/ Managing committee |
| Mode of Succession on Board of Management | Appointment or Election | Appointment or Election by members of the general body | Election by members of the general body |
Ronak
(Trainee)
(126 Points)
Replied 18 October 2011
Dear Arjeet,
You have mentioned that a minimum of 3 trustees are required for a Section 25 Co. My doubt is whether they are considerd as members itself. We want to incorporate a Section 25 Co. which will be a public co. so in that case i presume we require
3 trustees( Mr.A, Mr. B and Mr. C)
7 Members (Can these 7 people iclude the 3 mentioned above or all together 7 different people)
3 directors
Please Clarify
Thanks,
Ronak
CAclubindia
