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Tuesday, 21 June 2011

Difference between Trust and Cartel

We can distinguish the Cartel and Trust under the following heads :

1. FORMATION :-
Cartel : Cartel can be formed easily.
Trust : Trust formation is very difficult.

2. IDENTITY :-
Cartel : Cartels members have separate identity and they are independent in their internal affairs.
Trust : Trust members are generally not free in their internal affairs.

3. ISSUE OF CERTIFICATE :-
Cartel : Cartel does not issue certificates to is members.
Trust : Trust issues the certificates against the stock.

4. NATURE OF CONTROL :-
Cartel : Cartel control is decentralized.
Trust : Trust control is centralized in the hands of Board of Trustee.

5. STABILITY :-
Cartel : Cartel is not a permanent combination.
Trust : Trust is a stable combination.

6. CAPITAL :-
Cartel : Cartel has a limited capital for its operation.
Trust : Trust can increase the volume of capital.

7. CONTROL ON PRODUCTION :-
Cartel : Cartel has not control over the production.
Trust : Trust controls the production of members, firms and adjust the supply according to the demand.

8. TYPE OF COMBINATION :-
Cartel : Cartel is a horizontal type of combination.
Trust : Trust is a vertical type of combination.

9. ECONOMIES :-
Cartel : Cartel enjoys the economies of distribution.
Trust : Trust enjoys the economies of administration, production and distribution.

10. PUBLIC INTEREST :-
Cartel : Cartel is a temporary combination and sometimes it is in the public interest.
Trust : Trust is against the public interest.

11. RATE OF PROFIT :-
Cartel : Cartel is a temporary and enjoys less profit.
Trust : Trust enjoys larger profit.

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