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can Trust be a shareholder of a company?

C.A. Sanjay Bhatia (CA) (496 Points)

07 July 2008

a trust name could appear in the register of members of a company if yes then in which section it is covered?

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7 Replies

(Guest)

I think yes. trust can be a shareholder of a company as it can invest its money in shares of specified entities under section 20 of the Indian Trust Act, 1882.

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poonam verma (Company Secretary) (191 Points)
Replied 08 July 2008

Shares can be held in the name of trust if it is a redg. one under indian trust act otherwise shares r to be held in the name of individual trustee.

I think i m right.

regards,

pushp palawat (Management Trainee) (37 Points)
Replied 15 July 2008

Originally posted by :poonam verma
"	no, a trust can't become a member in a company	"

(Guest)

No, a trust name cant be entered into register of members. Since trust is not included in definition of person so trust cant hold shares in its own name. It can hold shares in name of trustees.

Bharat Diwan (Company Secretary) (38 Points)
Replied 17 March 2010

trust cant hold share in its own name if not a registered trust under indian trust act, den in dat case individual trustee can hold shares...

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Vasant Patel (Proprietor) (47 Points)
Replied 11 February 2011

Dear Sir

One religous trust want to acquire/subscribe/purchase share of private Limited ?

Pl advise me whether trust can be as shareholder ?

cs ashwini kumar (Company Secretary in Practice) (173 Points)
Replied 11 February 2011

Dear Mr. Vasant,

The Shares can't be registered in the name of Trust. However, the Trust may invest in the share of the Company and the same shall only be registered in the name of Trustee. Further, if the Trust is registered under section 12A/ 12AA of the Income Tax Act, then investment in shares is not permissible under Section 13 of the Income Tax Act for availing the exemption benefit.

Best Regards

CS Ashwini Kumar