Difference Between Trust and Company
Businesses throughout the world have a number of different legal recognitions, depending on their structure and extend of operations. For giving a legal recognition to your business as an entity, you have to get it registered with the authoritative body of your state, which shall determine the category of your business. If you want to initiate a company for business purposes, there are several categories which you can opt according to your structure. It is mostly believed that any large scale business is to be called a company. Even ‘public trusts’ are also thought to be same as a company. However, there are huge differences between a company and a trust.
Trust is actually a corporation being organised to perform the fiduciary duties of trusts and agencies. The name ‘trust’ refers to a setup within an institution where the trust department acts as a trustee (i.e. when someone administers financial assets on behalf of another person). All the assets are held in the form of a trust and it is specifically declared who are to be the beneficiaries and what the money can be sped for.
A company is an association or collection of individuals, who share common objectives and collaborate to concentrate their skills and use the resources to achieve specifically declared goals. A registered company is considered to be a separate business entity, which can buy, sell and hold assets and liabilities in its name.
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Trust
Trusts are mostly created for charitable purposes and to deliver benefit to general population. A trust cannot be revoked once it is formed and has started to operate. Normally, a trust is formed when some property is involved. Income generated from a trust’s properties is not subjected to taxes. At least two to three people are required to form a trust and make an agreement to deal with the property maters. A trust can be formed on behalf of a minor child as well until he/she becomes an adult. Charitable trusts are non-profit organisations and have goals to alleviate property, promote education, provide medical relief and other such charitable works.
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Company
The goal of a company is to maximise its shareholders’ money and earn as much legal profit as it can. A company is dealt as a separate business entity and it can have assets, liabilities and bank accounts in its name. A Memorandum of Association is to be written and then a registration form is to be filled before a business gets the status of a company and receives an Employer Identification Number. Profits derived from companies are taxable under Corporate Law, whilst the owners of the company have to pay their income tax separately in their own name.
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. All the assets are held in the form of a trust and it is specifically declared who are to be the beneficiaries and what the money can be sped for.
A company is an association or collection of individuals, who share common objectives and collaborate to concentrate their skills and use the resources to achieve specifically declared goals. A registered company is considered to be a separate business entity, which can buy, sell and hold assets and liabilities in its name. Next%20stop%3A%20Pinterest "Pin It")