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Tuesday, 21 June 2011

Difference between Holding company and a Trust

We can differentiate the holding company and a trust in the following way :

1. FORMATION :-
Holding company : A holding company may be formed easily.
Trust : Trust formation is very difficult.

2. MANAGEMENT :-
Holding company : Holding company is managed by the Board of directors.
Trust : Trust is managed by the Board of trustee.

3. POSITION :-
Holding company : A holding company is a loose form of organization.
Trust : It is a strong form of combination.

4. RIGHT OF ISSUE :-
Holding company : Holding company can issue the share certificates to its members.
Trust : Trust can issue Trust Certificates to its member companies.

5. LEGAL POSITION :-
Holding company : A holding company objects are legal.
Trust : Trust is formed to create monopoly which is illegal.

6. SCALE OF BUSINESS :-
Holding company : A holding company scale of production is large.
Trust : Trust scale of production is also large.

7. ELIMINATION OF COMPETITION :-
Holding company : A holding company tries to eliminate competition.
Trust : Trust is formed to create monopoly.

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