Loan in a trust
PGKN
(Querist) 28 January 2014
This query is : Resolved
Hi,
My trust is running in cash crunch situation and already running a loan on property. And no bank is ready to give additional loan.
Can I borrow loan in personal name and give the entire amount to trust on loan. And can I charge the interest paid by me on my personal loan from the trust.
Please help as it is very important.
Thanks in advance for your guidance.
ajay sethi
(Expert) 28 January 2014
it would be highly inappropriate for you to take loan in your persoal name and give it to trust on loan at interest .
you dont want other trustees to make personal allegations against you .
it is always better to maintain an arms length relation ship betwwen your duties as trustee and your personal affairs .
PGKN
(Querist) 28 January 2014
Thanks, but then how to generate funds in order to save trust.
Devajyoti Barman
(Expert) 28 January 2014
Is it private or public trust?
In any case refer to the trust deed to know whether such raising of loan is allowed or not.
If it is there then Board of trustee may authroise you by passing a majority resolution to borrow money for the improvement of trust.
Advocate. Arunagiri
(Expert) 28 January 2014
You can lend to the Trust in your individual capacity. You can take any interest as approved the trust. Your source is immaterial.
