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Difference Between Trust and Company

February 19, 2011 Posted by Aron

Trust vs Company

Trust and Company are two words that are often used in the sense of organization. They have shown some differences between them in terms of their functioning and characteristics.

A company is a form of business organization. It is a conglomeration of individuals and assets with a common aim towards the attainment of profits. A trust on the other hand is a corporation particularly a commercial bank, organized to perform the fiduciary of trusts and agencies.

A trust is characterized by the presence of a trustee who administers financial assets on behalf of another. In other words it can be said that all the assets are held typically in the form of a trust, which can decide regarding matters related to the beneficiaries and to what the money can be spent for.

On the other hand a company is a legal entity and is a form of body corporate, generally registered under the Companies Act. It does not include a partnership or any other incorporated group of persons according to the English Law. This is indeed the main difference between trust and company.

Trust works on the main goal of safeguarding assets and other kinds of property related to a person or group of persons or any other organization for that matter. On the other hand a company is based on a business for which all the persons associated with it are working for. All the persons working for a company are supposed to have a common aim called the gaining of profits.

The aim of a trust is not to gain the profits but gain the trust of the persons by way of maintenance of private assets and property. The proceeds of a trust can be spent for charitable purposes. On the other hand the proceeds of a company are generally spent for the development of the company. The proceeds of a company are spent with the motive of taking the company to the next higher level.

The various forms of company include sole proprietorship, partnership, corporation and cooperative. The functions of a trust on the other hand include management of investments, keeping of records, management of accounts, preparation of court accountings, pay bills, medical expenses, charitable gifts and distribution of income and principal.

Some of the important activities of a trust include estate administration, asset management, escrow services, corporate trust services and the like.

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Difference Between Shareholders and Stakeholders Difference Between Corporation and LLC Difference Between Bankruptcy and Insolvency Difference Between Subsidiary and Division Difference Between Joint Venture and Partnership

Filed Under: Organization Structure Tagged With: agencies, charity, commercial bank, Companies Act, company, conglomerate, Cooperative, Corporation, fiduciary of trusts, functions of a trust, incorporated, partnership, sole proprietorship, TATA conglomerate, Trust, trustee, types of business organization, various forms of company

About the Author: Aron

Professor in Social Science and a contributing writer for Difference Between

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