Anchal talwar (Company Secretary) 02 August 2010

Can trust be a member of a company

Dear Members

Gud Evening

I have a query

Can a Trust be a member of a company?

I think yes,but i wanted to confirm.also if trust is becomes member of the company, than will the shares be issued in trust name?

Thanks in anticipation...

gud day

Reply Follow

3 Replies

harsh asthana (advocate) 04 August 2010

Yes the trust can buy shares of companies provided the there is no self imposed bar and as such the trust will enjoy benefits of dividend bonus etc.

Valerian Menezes (President) 04 August 2010

Yes, as a body corporate the trust can become a member of a company. The share a trust gets on becoming a member is actually not investment. It is only a token of its becoming member and the dividend and bonus it subsequently it gets on its share is a natural return, not profit on trading. Hence such natural return is not against the Sec.12A. I do not know any court judgements in this regard. This is my considered opinion.