There are some forms of organization that are created, with the aim of providing services to members, rather than earning a profit. Trust and society are two of these organizations. Trust a legal arrangement where a person holds ownership for the sake of some other person. The company is an association of people, who come together to fulfill a particular purpose, described under the act.
The basic distinctive feature in the two legal entities is the purpose for which they were created, and once you know the purpose, you can easily differentiate between a trust and a company.
To create a trust, there must be at least two people required, while a minimum of seven members are required to create a company. In this article, you will find all the substantial differences between trust and society, take a reading.
|Sense||A legal relationship, in which the author assigns ownership to the trustee for the benefit of the beneficiary.||A company is an organized group of people who come together to fulfill any purpose related to literature, science or charity.|
|Statute||Indian Trust Act, 1882||Societies Registration Act, 1860|
|Fundamental document||Trust in trust||Memorandum of Association and Rules and Regulations|
|Minimum people required||2||7|
|Ruled by||Board of directors||Governing body which should be directors, governors, trustees etc.|
Definition of trust
Trust a legal entity, created by a party, in which the second party has the right to hold the assets of the first party for the benefit of the third party.
Here, the first part refers to the author of the trust or trustor; the second party known as a trustee, who accepts the trust proposal and retains the creditor's ownership on behalf of the payee (third party). The object of the trust known as Trust Property and the document in which all the terms and conditions relating to the trust known as Trust Deed are written.
The trust governed by the Indian Trusts Act of 1882, which applies to the whole country, with the exception of the state of Jammu and Kashmir. The following are the types of trust:
- Living Trust : building author's trust when I live.
- Testamentary trust : the trust that comes after the author's death.
- Trust revocable: the trust that can be revoked or modified by the author known as the Revocable Trust. This type of trust becomes irrevocable if the grantor dies.
- Irrevocable trust : the trust that irrevocable in nature known as an irrevocable trust.
Definition of company
Society is a group of people who are associated together for a common purpose. The purpose could be related to the promotion of any literary, charitable or scientific work.
The incorporation of a very simple company requires at least seven members who sign the memorandum of association (MOA) and file it with the Registrar of Companies (ROC). In this way, the company legally constituted with the Societies Registration Act of 1860.
The memorandum contains all the details relating to the name and object of the company. In addition to this, the memorandum contains the names, addresses and profession of the governing body and its members. The committee, the governors, the directors, the directors, the trustees and others, are part of the company's governing body.
Key differences between trust and society
The following are the differences between trust and society:
- A trust is an agreement between the parties, in which one party holds a resource for the benefit of another party. Society is a collection of people who come together to initiate literary, scientific or charitable purposes.
- Trusts are registered under the Indian Trusts Act of 1882, while companies are established by the Indian Society Act of 1860.
- There can be at least two members in a trust, while in society there should be at least seven members.
- Trust Deed the basic document, in the case of Trust, but in the case of the Company, details are provided in the Memorandum of Association and Rules & Regulations.
- There is only one man control in trust. However, there is democratic control in society where decisions are made by vote.
- The board of trustees contains trustees, but in the case of the company there is a governing body that includes commissions, directors, advisers, directors, governors, etc.
The purpose for which a trust is created that a person will retain the ownership of another person for the benefit of a third person while the company set up to promote any other scientific, literary, charitable and similar objective. The purpose of the two differentiates them.