MANAGEMENT TRANSFER OF A CHARITABLE TRUST

[Naresh Khurana]

A PUBLIC CHARITABLE TRUST BEING  RUN FOR MORE THAN 25 YEARS BY A BOARD OF TRUSTEES WORKING ON PRIVATE DONATIONS AND GRANT IN AID FROM GOVT IN THE FIELD OF CHILD EDUCATION, HEALTH, IMMUNIZATON AND FAMILY WELFARE RECEIVED AN OFFER FROM CSR(CORPORATE SOCIAL RESPONSIBILITY) DEPT OF A  CORPORATE TO TRANSFER THE WORKING AND  MANAGEMENT OF THE TRUST.

THE TRUST HAS NOMINAL CORPUS, VERY SMALL AMOUNT OF ASSETS AND LIABILITIES AND  A WORKFORCE OF SALARIED EMPLOYEES.

CAN THE TRUSTEES TRANSFER THE MANAGEMENT BY SIMPLY INDUCTING THE NEW TRUSTEES AND RESIGNING FROM THE BOARD?

COULD THERE BE ANY CONSIDERATION FOR THE TRANSFER ON THE BASIS OF THE GOODWILL OF THE TRUST'S LONG WORKING EXPERIENCE SINCE THERE ARE HARDLY ANY ASSETS AND LIABILITIES?

IF YES, HOW CAN THAT BE VALUED AND WHO WILL BE THE RECIPIENT OF SUCH CONSIDERATION?

WHAT WOULD BE THE TAX IMPLICATIONS, IF ANY?

AI Summary

Charitable Trust Considers Management Transfer to Corporate CSR; Examines Goodwill Valuation and Tax Implications A public charitable trust, operational for over 25 years in areas like child education and health, has received an offer from a corporate's CSR department to take over its management. The trust, with minimal assets and liabilities, is considering transferring management by appointing new trustees and having the current ones resign. Questions arise regarding the possibility of receiving consideration for the trust's goodwill, its valuation, and potential tax implications. The discussion includes an inquiry about the absence of replies or clarifications on the matter.