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Trust registration in India - An overview

Public Trust is the most convenient way of starting an non-governmental organization or NGO. A trust functions on the objective of eradicating poverty, providing education to the underprivileged and offering medical relief apart from the generalized aim of promoting arts, science and literature. It is to be noted that trusts are irrevocable which means they cannot be amended or terminated without the permission of the court.

In India, there are no specific laws to govern the public trust, however, some states like Maharashtra and Tamil Nadu have their own public trust Act.

Online Trust registration - A detailed process

As an initial step in registering the trust, the founder of the trust or the “Author of the Trust” or the “Settlor of the Trust” has to figure out in a document the objectives of the trust and the manner in which the trustees have to work towards achieving the goals of the Trust. This document that contains all such details is called a Trust Deed.

Once this is made, thereafter, an application for registration of the trust shall be moved before the Registrar of Trust along with the Trust Deed. The appropriate jurisdiction for registration of the trust is usually where the registered office of the trust is located.

All the fields are monidatory.

Registration Process

Online Registration

Content of the Trust Deed

The trust deed is the primary and the most essential document of the trust which states the reason for forming a trust, its functions, to its working, and until its closure. Following are the important clauses in the Trust Deed:

  • Name of the trust
  • The registered office of the trust
  • Area of operation of the
  • Objectives of the trust
  • Details of the Author of the Trust
  • Corpus/Assets of the Trust
  • Details of the Board of Trustees
  • Quorum of the Board with their qualification, terms and tenure
  • Powers and functions of the Managing Trustee and other Trustees
  • Closure and amendment of the trust deed and the applicability of the Act

Documents Required

The following documents are required during the registration of the Trust:

  • A completely drafted trust deed
  • Proof of registered office - (Rental Agreement or ownership document)
  • ID proof of the Founder of the Trust
  • Two witnesses

Constitution of the Trust

The Trust constitutes the Board of Trustees. The Board constitutes the following:

  • Author/Founder/Settlor of the trust
  • Managing trustee(s)
  • Other trustees

The quorum of the Board of Trustees shall not exceed a maximum of 21 members.

Why register a trust?

  • As per the Public Trust Act of all states, registration of Trust is mandatory if it involves charitable purpose or when there is a transfer of immovable property in the name of the trust.
  • Only registered trust is eligible for tax exemptions provided under Section 12 A and 80G of the Income Tax Act.
  • Registering a trust adds more credibility to the same as it involves public money in the form of donations.

Trust Compliances

    A trust shall after its registration shall do the following

  • Obtain PAN card
  • Book Keeping and Accounts
  • Annual IT filings
  • Shops and Establishment License - in case of employment
  • Professional Tax Registration - if applicable
  • GST registration - if applicable

Applicability of tax exemption

There is a general notion that trust need not have to pay tax as they work towards the welfare of the public at large. But this is not true. A trust, like any other legal entity, is liable to pay tax. In order to be exempted from tax, trust is required to obtain certification for the said exemptions such as Section 12 A, 80G etc. from the Income Tax authorities..

Why Legal Registration

20 WORKING DAYS

Just tell us a little bit about your business and you'll have the registered trust deed in 20 working days (subject to government approval). It's that simple. In addition to yours, we'll be handling around 400 requests this month.

9.1 CUSTOMER SCORE

We make your interaction with the government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.

160 STRONG TEAM

Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we'll try to ensure that your doubts are cleared before they even arise.

FAQs on Trust Registration

The Trustees do not have the right to sell the property, however, the trust properties can be sold after obtaining prior permission from the appropriate civil court.

Based on the cause and objectives, NGOs can be registered online as Trust or Section 8 companies.

Yes. Government employees or officers can be part of NGOs, provided the NGO is not working towards any anti-government activities or programmes. The intended members should ensure the particular organization is not profit making and that its members do not draw any salary from the NGO.

The trust is usually irrevocable in nature. For reasons like disqualification of trustees, absence of trustees, mismanagement of the trust, the trust can be merged with a trust having similar objective with the permission of the court.

There is no specific certificate for a trust registration. On the other hand, getting the trust deed registered with the appropriate authorities would suffice.

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