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Can a charitable trust buy from a company having same trustees


14-Jun-2023 (In Corporate Law)
If a company manufactures green products and has a charitable trust whose trustee are the directors of the company. Can the trust buy products from the same company for helping the poor get the benefit of green products.
Answers (2)

Answer #1
880 votes
It is permissible for such a sale to take place. However, it must be remembered that the price at which the product is sold will have to remain the price at which the product would generally be sold in the market. If the price of the goods for the transaction differs from the value at which it is generally sold, the transaction will be a 'Related Party Transaction' and can be called into question later. Hence, the sale must be on the price at which the products would be generally available in the market.
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Answer #2
925 votes
Yes it’s possible to buy the products from the same company provided we have few Compliances which has to be done that’s it and it’s a good idea for development of economy too hence for further query plz contact
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