Trust vs. Section 25 Company

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ankush83

16 Points Posted on 08 June 2009

Dear Friends

Can anyone pass me a Note on Trust vs. Section 25 Company.(Including Cost of formation,Taxability of both)

Regards

Ankush

Replies (5)

Guest

Originally posted by :ankush83

Dear Ankush,

Cost of Formationa and Taxes would b higher in 25Comp as compared to trsut.

Further there would a direct interfierence in 25 Company.

If possible go for a Trust. That would take lesser time for formation. Sec 25 would take minimum 3 months.

Changes would b harder in 25 than Tr.

Compliances in 25 comp. more than trust.

I would advise to go for a Trsut.

Divya

Advocate

150 Points Posted on 09 June 2009

i agree with NIRAV ...............besides the registration of a Section 25 company is very cumbersome and u need to pay a lot and conduct the business in accordance with the regulations of the Companies Act whereas a trust can be formed by registering the trust deed with the district registrar and the conduct of the trust business can be provided for in the trust deed.

ankush83

16 Points Posted on 09 June 2009

hey guyz....I appreciate your view points.But i am looking at a comparative analysis on Trust vs. Section 25 Company.it would be great if some one could share it.Thanks in advance...

Kumar

Legal Consultant

358 Points Posted on 10 June 2009

Dear Ankush,

Please find below the comparative chart:

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 (charity commissioner in Maharashtra).	Registrar of companies
Registration	As trust	As Society In Maharashtra, both 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