DIFFERENCE BETWEEN TRUST AND SOCIETY

INTRODCUTION:-

There are certain forms of organization which is created, with an aim of providing services to the
members, rather than earning a profit. Trust and society are two such organizations. Trust is a
legal arrangement in which a person holds property for the sake of some other person. Society is
an association of person, who come together to fulfill any particular purpose, described under the
act.

The basic distinguishing feature in the two legal persons is the purpose for which they are
created and once you know the purpose, you can easily differentiate a trust and a society.

BASIS FOR
TRUST SOCIETY
COMPARISON

Meaning A legal relationship, in which A society is an organized group of

author assigns property to the persons, who are joined together for
trustee for the benefit of the fulfilling any purpose relating to
beneficiary. literature, science or charity.

Statute Indian Trust Act, 1882 Societies Registration Act, 1860

Fundamental Trust Deed Memorandum of Association and

document Rules & Regulations

Minimum 2 7
persons required

Control system Centralized Democratic

Governed by Board of trustees Governing Body which should be

directors, governors, trustees etc.

Jurisdiction Trusts are under the jurisdiction of The power to register a society lies
Deputy Registrar/Charity in the hand of Registrar of
Commissioner of the relevant Societies.
area.

Stamp Duty Trust deed to be executed on non- No stamp duty required for
judicial stamp paper, vary from memorandum of association and
state to state rules and regulations.

Legal Title Legal title of the property of a In a society, all properties are held
trust vests in the hand of trustees in the name of the society.
 BASIS FOR
TRUST SOCIETY
COMPARISON

Revocable/ Indian public charitable trusts are Societies may be dissolved.

irrevocable generally irrevocable. Dissolution must be approved by at
least three-fifths of the society’s
members.

In case of If a trust becomes inactive due to Upon dissolution, and after

inactiveness the negligence of its trustees, the
Charity Commissioner ay take
steps to revive the trust.
Furthermore, if it becomes too
difficult to carry out the objects of
a trust, the doctrine of cy pres,
meaning “as near as possible,”
may be applied to change the
objects of the trust. Thus, it
appears that grantors can feel
fairly secure that the charitable
nature of a trust will be honored,
even, if the original specific
purpose of the trust cannot be
carried out.
settlement of all debts and
liabilities, the funds and property of
the society may not be distributed
among the members of the society.
Rather, the remaining funds and
property must be given or
transferred to some other society,
preferably one with similar objects
as the dissolved entity.

Annual There is no requirement of annual Societies must file annually, with

compliance return filing. the Registrar of Societies, a list of
the names, addresses and
occupations of their managing
committee members.

Definition of Trust:
Trust is a legal entity, created by one 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 party refers to the author of the trust or trustor; the second party is known as a
trustee, who accepts the proposal of trust and maintains the property of the trust or on behalf of
the beneficiary (third party). The subject matter of the trust is known as Trust Property, and the
document in which all the terms and conditions regarding the trust are written is known as a
Trust Deed.
Property and the document in which all the terms and conditions regarding the trust are written is
known as a Trust Deed.

The trust is governed by the Indian Trusts Act, 1882 which applies to all over the country except
the state of Jammu & Kashmir. The following are the types of trust:
. Living Trust: The formation of confidence by the author when he is alive.

. Testamentary Trust: The trust which comes into existence after the death of the author.

. Revocable Trust: The trust which can be revoked or modified by the author is known as
Revocable Trust. Such kind of trust becomes irrevocable if the grantor dies.

. Irrevocable Trust: The trust which is irrevocable in nature is known as an irrevocable trust.

Definition of Society.

Society is a group of persons who are associated together for a common purpose. The purpose
may be related to promoting any literary, charitable or scientific work.

The incorporation of a society is very simple which requires minimum seven members who sign
the memorandum of association (MOA) and then files it to the Registrar of Companies (ROC).
In this way, the society is legally formed under the Societies Registration Act, 1860.

The memorandum contains all the details related to the name and the object of the society. In
addition to this, the memorandum contains the names, addresses, and profession of the governing
body and its members. Committee, governors, directors, council, trustees and others, are the part
of the governing body of the society.

Societies work in a manner similar to trusts. That is why these two terms are often used
interchangeably. However, both entities are different from each other. The Societies Registration
Act, 1860 governs societies in India. On the other hand, private trusts come under the purview
of Indian Trust Act, 1882. In India both the trust and the society are incorporated with the aim of
benefiting its member rather than making profits. Thus the basic essence of both the structures is
same.

Conclusion:

The purpose for which a trust is created is that a person will hold the property of another person
for the benefit of a third person while society is set up to promote any scientific, literary,
charitable and similar another objective.