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Difference between Charitable Trust and Charitable Society:

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. This is complex legal topic to explain and I am not a good teacher. So just for better understanding let’s have an example:

A formed a trust ‘To promote and encourage advancement of literary, cultural, political, religious, education for all the Kargil war widows’.

Suppose every other legal requirement has already been satisfied but one. Here we have the purpose ‘To promote and encourage advancement of literary, cultural, political, religious, education’ and a beneficiary ‘all the Kargil war widows’.

Here the purpose is no doubt a ‘Charitable’ so I am not discussing this. The beneficiaries of this trust ‘all the Kargil war widows’ are also looks normal. But look closer. That’s what lawyers do. If we analyze the beneficiaries then we can see that the trust is only for the benefit of widows of Kargil war, no other person(s) can get any benefit form this trust. Moreover the Kargil war is over now so there is no new widow of form that war. In other words the beneficiaries are the member of a closed group, not for general public. Therefore that trust is in this example is not a charitable trust.

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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