Corpus - Definition & Advantages of Corpus | What is Corpus?

Definition of Corpus 

Corpus funds are the long-term assets that a trust or institution holds for ongoing operations. 

These funds are not used for goals or objectives but to sustain the organization. They can be used to buy assets like land or buildings and can be invested according to the Income Tax Act, 1961. 

Overview 

The corpus is the total of all investments in a plan. It increases with additional contributions. Corpus donations are used to build corpus funds and can't be transferred without the donor's consent. The corpus fund is a closed fund with no future use restrictions. 

Corpus funds can be used for an NGO's survival. Decisions about their use are usually made at general meetings. The funds are restricted, but their goals are not. They are unrestricted permanent funds, and the limitations are on use, not type. 

Building a corpus fund without donor consent can significantly reduce program activities, and the law doesn't support this. According to Indian Income Tax Laws, 85% of voluntary donations should be used for charitable purposes, leaving only 15% for accumulation. 

Donations made through a box labelled "corpus" are not considered corpus donations unless there is a specific written direction from the donor. 

Advantages 

Having a corpus fund is vital for a business's smooth operation. It allows an organization to carry on its essential functions, even without funding or outside help. It reduces financial risk and ensures longevity. The corpus fund also contributes to the organization's income along with other revenues. 

The organization's capital, which is raised and saved for its survival, is its corpus. It's usually a permanent fund used for the organization's necessary administrative and survival expenses.