Dear Friends,
Greetings from Hyderabad!
I have the following question:
- There is a registered Trust/Society with a Chief Functionary in place
- The same Trust/Society goes ahead with the registration as a Section 25 company.
My question to all of you is:
- Can the CF of the original Trust/Society be the CF of the section 25 company?
- If yes, what are the necessary conditions to be followed in this regard.
Thanks and regards,
B V Soma Sastry
Director – Finance and Admin
Centre for World Solidarity
Dear Sir
Please note that the 12 A registration has been granted to you on the basis of the papers filed by you as a trust including the trust deed. Now since the section 25 company is a different legal entity you may have to apply to get the registration under section 12 A afresh, and may be for one year you may have to file two returns and have two accounts .
This may be kept in view before converting it into a section 25 company , as there is no real benefit of converting
As regards the remuneration paid , as has been pointed out you have to be careful in not violating the section 13 (3)
Regards
srinivasan
Hello
To become chief functionary of company, he can become the executive director of the company, the resulting of this he would become the managing director the company.
Regards
Pushkar
Dear Sastry
A trust/society and a sec 25 company, although may have the same CF, a common board, common objectives, etc., in the eyes of the law are two separate water-tight compartments.
As such, there is nothing in law that prevents a single CF from functioning as CF for both the trust/society and the Sec 25 company. You may only need to read Section 13 (3) of the Income Tax Act, with a real magnifying glass, to see what amounts to an interested party transaction, as I would imagine, there could be transactions between the society/trust and the company concerned, with a common CF. I presume, both are 12A registered and section 13(3) would apply to both.
Hope you find this useful
Best regards
Sriraman