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CS Professional · CSR and Social Governance · Financial and Non-financial Reporting of Different Non-Corporate Entities

Shree Ganesh Seva Trust is a public charitable trust registered under the Maharashtra Public Trusts Act, 1950. Its trustees ask which statute mainly prescribes the form of accounts and audit for it. Which is the correct position?

The state public trusts statute under which the trust is registered, here the Maharashtra Public Trusts Act, prescribes the books, annual accounts and audit. The Companies Act applies to companies, not trusts, so it does not directly govern a charitable trust's accounts.

  1. AThe Companies Act, 2013 applies directly to its books of account
  2. BThe state public trust legislation under which it is registered prescribes its accounts and auditCorrect
  3. CThe Indian Partnership Act, 1932 prescribes its accounts
  4. DNo law prescribes any account-keeping for public charitable trusts

Explanation

A public charitable trust is governed by the state public trusts law under which it is registered, and that law lays down the books, annual accounts and audit requirements. The Companies Act applies to companies, not trusts. The claim that no law applies is wrong because trusts must keep accounts under state law and tax law.

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