Trust or society for a school ?
lawclubme
(Querist) 11 December 2012
This query is : Resolved
If a family is starting a school, which is better to form:: a trust or a society ?
What are the benefits of making a trust or a society ?
Please explain in detail.
I will also need legal help to make all documents.
ajay sethi
(Expert) 11 December 2012
form a charitable trust . contact a local lawyer
lawclubme
(Querist) 11 December 2012
What are the advantages of a trust over a society ?
any idea?
ajay sethi
(Expert) 11 December 2012
Societies are similar in character to trusts, although there a few essential differences. While only two individuals are required to form a trust, a minimum of seven individuals are required to form a society. The applicants must register the society with the state Registrar of Societies having jurisdiction in order to be eligible to apply for tax-exempt status. A registration application includes the society's memorandum of association and rules and regulations. In general, Indian citizens serve as members of the managing committee or governing council of societies, although there is no prohibition in the Societies Registration Act against non-natural legal persons or foreigners serving in this capacity.
The chief advantage of forming a society are that it gives a corporate appearance to the organization, and provides greater flexibility as it is easier to amend the memorandum and bye laws of the society than in case of trust, terms of which are strictly manifested in the trust deed.
However, formation of a society requires more procedural formalities than in case of a trust.
R.K Nanda
(Expert) 11 December 2012
go for trust and execute a TD.
lawclubme
(Querist) 11 December 2012
Can you please elaborate why a trust and not a society ?
Your help will be appreciated.
Raj Kumar Makkad
(Expert) 11 December 2012
As you are intending to start the school by a family so trust is appropriate because the members of the trust are not generally replaced and the rules for the meetings and other formalities are also very loose. There is also income tax exemption more than the society and even the entry of 'outsiders' in the trust can be got practically banned and all these benefits are not available in society.
Govt. restrictions and checking is more often in societies than of trust.
