William (self emp) 14 November 2011

Rules for charitable trusts

I need some information regarding Charitable Trusts please

QUESTIONS:

1. Must the trustees be paid, or should they work on honorary basis? Are there any rules regading this issue that is set by the charity commissioner?

2. If the trustees can be paid, are there any limits for their salaries?

3. Who appoints the trustees?

4. How can a trustee be removed and by whom?

5. What is the tenure/ duration for a trustee? Must trustees be reelected/ reappointed?

Thanks in advance

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4 Replies

niranjan (civil practice) 14 November 2011

trustees cannot get salary but if trust board decides Managing Trustee can get honorarium. Trustee cannot get benefit in any manner by doing business etc.with the Trust.On the contrary if Trustee is found getting benefit of his position he can be disqualified. The method of appointing new Trustee,forming new Board,removal of ?Trustee are all as per the Constitution of the Trust.And appointment and removal of trustee are tobe approved by the Dy.Chharity Commissioner by filing change report and got approved.You can refer Bombay Public Trust Act for further reference if in Gujarat or Maharashtra.For other States,their laws.

William (self emp) 15 November 2011

Thank you Mr Niranjan. You were very helpful.

Sanjay (Genl Manager) 15 November 2011

Dear Mr. William,

Actually no salary or any payment can be made to trustees, as per the law. However, as mentioned above, a honororium can be paid out of funds of trust. Though the law doesnt exactly specify a limit of any kind, the word of prime importance here is "reasonable". Expenses can be reimbursed like travel, conveyance, etc. which is allowable, IF AND ONLY IF, they are defined in the rules and bye-laws of the Trusts and such provisions of payments are made during the constitution of the Trust. These must be within reasonable limits. i.e. the payment should be within limits of its funds, otherwise even that is not agreeable.