Starting a Nonprofit Corporation - Research Paper Example

There has been a huge increase in the social and welfare activities in which nonprofit organizations such as Charitable trusts, Societies, Cooperatives, and Associations engage. One of the reasons for this is that the demand for welfare and social activities increase and customers feel uncomfortable with fierce competitions of profit-making organizations.According to Law Encyclopedia, a charitable trust is an arrangement by which real or personal property given by one person is held by another to be used for the benefit of a class or the general public.

Trust is organized as a legal charity that is created for educational or scientific or other welfare and social purposes. The law gives certain privileges to charitable trusts such as tax advantages. Before a charitable trust is being enforced in front of the court the charity purposes and social benefits need to be examined by the court. The charitable trust can be valid only if it fulfills certain requirements. The settler, one who sets up the trust, must intend to create the charitable trust with specific purposes, there must be a trustee, and the charitable purposes must also be expressly declared.

A charitable trust generally can be formed such a way that its beneficiaries, namely public or certain class of persons should get the best benefits of the charitable trust.The beneficiary group in a charitable trust must be a definite group among the public and the same time it needs to be large so that the community as a whole will be benefited. Within the group, the specific persons to get the benefits must be indefinite; otherwise, it can be regarded as bias. If a particular charitable trust has been formed specifying the beneficiaries within a particular group, it seems not to be indefinite, so can be treated as illegal.