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70 HASKINS & SELLS November Trust Company Auditing A TRUST company is a hybrid organi-zation incorporated under the laws of some one of the various States or of the District of Columbia. Any attempt to classify a trust company as to the kind of business transacted meets with difficulty, in that many of them carry on a banking business in addition to performing the function of a trustee, while many others combine these functions with title insurance and what-not. In the State of New York, Laws of 1914, Chapter 369, "when authorized by the Superintendent of Banks, as provided by Section 23 of this Chapter, seven or more persons may form a corporation to be known as a trust company. Such persons shall subscribe and acknowledge an organization certificate, in duplicate, which shall specifically state: (1) The name by which the trust company is to be known. (2) The place where its business is to be transacted. (3) The amount of its capital stock (ranging from $100,000.00 to $500,- 000.00, depending upon population) and the number of shares into which such capital stock shall be divided. (4) The names and places of residence of the incorporators. (5) The term of its existence, which may be perpetual. (6) A declaration that each incorporator will accept the responsibilities and faithfully discharge the duties of a director therein, if elected to act as such, when authorized by the provisions of this chapter." "Every trust company shall . . . . . keep on deposit with the Superintendent of Banks interest-bearing stocks or bonds of the United States, or of this State, or of any city, county, town, village, or free school district in this State authorized by the Legislature to be issued to the amount in value of ten per centum of its capital stock," (but not less than $20,000 to $100,000, depending upon the population of the place in which the company is located.) Trust companies derive their corporate powers from the general and stock corporation laws of the State, the special provisions of the banking law (Consolidated Laws of New York, Chapter 2, Article 5, Paragraph 185), and such additional powers as may be granted to them under their respective charters. Most trust companies in this State are members of the Clearing House Association, and many of the leading ones are members of the Federal Reserve System. In this latter particular, the trust companies are rapidly falling into line. A trust company has as its object the making of profit, like any mercantile organization. It is divided, generally speaking, into two parts: the banking department and the trust department. Today many trust companies have foreign departments. The functions of the banking department are, in a general sense, to receive deposits, make loans, invest any surplus funds, and maintain the necessary legal reserves. The following are the functions of the trust department: Establish and maintain trusts with— (A) Individuals. (B) Corporations. (A) Called Individual or Personal Trusts: (1) Serving as depositary under agreements with living persons. (2) Serving as Executor and Trustee under wills. (3) Serving under appointment of courts: (a) Substituted Trustee under agreement or will. (b) Guardian of minors. (c) Trustee for incompetents (B) Called Corporate Trusts : (1) Trustee under Mortgage to secure bonds:
Object Description
Title |
Trust company auditing |
Author |
Anonymous |
Subject | Trust companies -- Auditing |
Citation |
Haskins & Sells Bulletin, Vol. 01, no. 09 (1918 November 15), p. 70-71 Haskins & Sells Bulletin, Vol. 01, no. 10 (1918 December 15), p. 80-82 Haskins & Sells Bulletin, Vol. 02, no. 01 (1919 January 15), p. 06-08 Haskins & Sells Bulletin, Vol. 02, no. 02 (1919 February 15), p. 14-16 |
Date-Issued | 1918 |
Source | Originally published by: Haskins & Sells |
Type | Text |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Libraries. Accounting Collection |
Date-Digitally Created | 2009 |
Identifier | HS Bulletin 1-9-p70 |