Dear Member,
My company is desirous to open a trust / foundation.
The main objective will be to procure and pass on grants/donations to women who are engaged in the manufacture of carpets.
This foundation will then procure those carpets and sell them to my parent company.
My question is:
- What is the difference between Trust and foundation and which would be suitable for the proposed activities?
- Can a trust or foundation do the above mentioned activities?
- What will be requirements of opening a trust and foundation respectively? Are there any special areas in India where it is beneficial to open a Trust or foundation (Tax concessions, ease of obtaining grants)
- From a statutory prospective what kind of statutory compliances will be needed to be done by my company ( Eg applicability of Contract Labour Act, MW Act, etc)
- Finally we want to brand the produce of the carpets manufactured by the women such that it should promote the brand image of my parent company and also highlight the CSR activities being done by my company through the trust. Can this be done too?
Please clarify my doubts
Thanking You
Anuradha Grewal
we are a NGO running in rajasthan in the name of Asian educational Research and Development Programme Society (AERDPS) this NGO working in Education
Most of your questions seem to arise from confusion between legal structure of Trust & Foundation. A Trust in India is a generic term used for charitable entities, while a Foundation is an American Term. In US, a Foundation is also generally a charitable entity mainly for further donating funds.
In India, a Foundation is used in a general sense for charitable entity, and does not necessarily mean which further donates funds. In India legally there can be three forms of charitable entities, a Trust, a Society and a S.8 company under Companies Act 2013.
You can open any one of the legal forms mentioned above and can use term Foundation also in its name. Hope this helps you understand the basic legality of Charitable entities. But if your are totally new, unless there is someone to guide you personally, would strongly suggest to use local professional support.