Charitable Trust and Charitable
Society- Differences
Legal Nature
The basic deference between Charitable Trust and Charitable Society lies with the very object of Charitable Trust and Charitable Society.
The very basic purpose of a trust is to protect
a 'Property' for a specific purpose. Not every
trust is a Charitable Trust. So classify a
normal Trust as Charitable Trust we have to add
some charitable purposes. The charitable
purposes can be anything with in the legal
limitation. But just having some 'Charitable
Purposes' and a 'Property' is not sufficient
enough to classify regular Trust as the
Charitable Trust. We have to see the definition
of beneficiaries. The beneficiaries are very
important any trust. If there is no beneficiary
then there is no trust, and for Charitable Trust
the beneficiaries must be in accordance with the
trust purposes.
Charitable Purposes
The Society can only be formed for
charitable purposes only. It can not be formed
to make profit. However, the 'Charitable' is
only one of many types of Trust. It is possible
to form a trust to earn profit as well.
Non-Political nature
The organizations registered under Society
Registration Act must be non political in
nature. The trust does not have this type of
restrictions. Trust can be formed to support or
as political party.
Distribution of power
The only aim of an organization registered
under Society Registration Act is to do charity.
That is why the organizations registered under
Society Registration Act have proper
distribution of power. The power to make rules,
the power to manage funds and the power to run
organization are the most important powers for
any organization. These powers are properly
defined and distributed in an organization
registered under Society Registration Act.
On the other hand the trust is all about the
preserving the property for a purpose. In order
to do that the powers to make rules, the power
to manage funds and the power to run trust are
generally concentrated in on person or a group
of persons.
The governing body of a Trust has more control
over the assets of a trust the governing body of
an organization registered under Society
Registration Act.
Priority of Aims and Objects
The trust has to protect its property to serve
the purpose and to maintain it existence. If
there is no property there is no trust at all.
Therefore for trusts the trust property has
priority over its purposes. On the other hand
the organization registered under Society
Registration Act has to spend every last
resource to serve its aims and objects.
Termination
Both Charitable Trust and Charitable Society
are perpetual in nature. That is the none has
any expiration date.
However, the trust can be terminated in two
situations. First if there is no trust property
and second if there is no beneficiary. For
charitable trusts the first situation is more
important because of the nature of trust
property.
The Charitable Society however on the other hand
can exist without any property. So even if there
is no property an organization registered under
Society Registration Act can survive but a
Charitable Trust can not.
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