Trust Registration

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Trust Registration

A Non-Governmental Organization (NGO) is a legally established organization created by natural persons that operate independently without the interference of the government, with a charitable objective, for the betterment of society in general. A Non-Governmental Organization (NGO) is a Non-Profit Organization.  

The developing nation like India, NGOs are set up to fill the gaps between the Government & society. It plays a critical part in developing society by providing help in humanitarian, educational, health care, public policy, social, human rights, environmental and other areas.

Three ways to register an NGO:

  • Trust under Trust Act of each state (Public / Private Trust)
  • Society Registration Under Society Registration Act 1860
  • Section 8 Company under the Companies Act, 2013.

 

Trust Registration

 

A trust can be made by completing a “Trust Deed”. Trust must be regulated by that Trust Deed only. Minimum 3 members are required for the formation of trust and even members of a family can be involved in a trust. One will be the “Founder of the Trust” or the “Author of the Trust” or the “Settlor of the Trust and at least two will be the “Trustee of the Trust” There are many charitable trusts in India working for the Upliftment of downtrodden and poor people.

Trust for any legal purpose(s) can be formed or created by any individual over 18 years of age. Apart from individuals, an association of persons, a company, society, or firm is also eligible for creating trust. In a special case of a minor, the permission of a principal civil court of original jurisdiction is required to create a trust on behalf of a minor.

 

Trust can be registered in two ways:

  1. Public Trust
  2. Private Trust

 

Public Trust: Public Trust is the most convenient way of starting a non-governmental organization or NGO. Public charitable trust is a possible form of not-for-profit entity in India. Public trust is also known as charitable trust is created or made for the benefit of the general public. Public charitable trusts can be established for a number of purposes, including eradicating poverty, providing education to the underprivileged, and offering medical relief apart from the generalized aim of promoting arts, science, and literature, provision of facilities for recreation, and any other object of general public utility.  Indian public trusts are generally irrevocable which means they cannot be amended or terminated without the permission of the court.  No national law governs public charitable trusts in India, although many states (particularly Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh) have Public Trusts Acts.

Private Trust: A private trust is created for the benefit of an individual also known as a beneficiary or particular group.

 

The purpose for the registration of Trust:

  1. If an organization is involved in charitable purposes or if there is a transfer of immovable property in the name of the organization.
  2. Registration of Trust is mandatory as per the Public Trust Act of all states.
  3. Tax exemptions can only be provided to the registered trust under Section 12 A and 80G of the Income Tax Act.
  4. Credibility will be more if the trust is registered as it involves the money of individuals in the form of donations.
  5. If more than one family member is involved in running the business.
  6. If you want better privacy in business and flexibility in sharing among members.
  7. If you want trustees to hold office for a lifetime without any elections.

 

Functions and Restriction on Trustee:

  • Legal title of the property of public charitable trust vests in the trustees. 
  • Trustees of public charitable trust may not, however, in any way use trust property or their position for their own interest or private advantage. 
  • Trustees may not enter into agreements in which they may have a personal interest that conflicts or may possibly conflict with the interests of the beneficiaries of the trust (whose interests the trustees are bound to protect). 
  • Trustees may not delegate any of their duties, functions, or powers to a co-trustee or any other person, except that trustees may delegate ministerial acts. 
  • In essence, trustees may not delegate authority with respect to duties requiring the exercise of discretion.
  • Trustees of religious or charitable trusts are charged with discharging their duties with the degree of care that an ordinarily prudent person would exercise with respect to his personal property. 
  • Public charitable trusts are highly regulated.  For instance, in many states, purchases or sales of property by a trust must be approved in advance by the Charity Commissioner.

 

Documents/ Information Requirements for Trust Registration

For Trust Registration we Require Two Members: one being Settler AND one being Trustee

  1. Name of the trust
  2. Object of the trust
  3. Address of registered office of the trust
  4. Share capital of the trust
  5. Electricity bill
  6. NOC from landlord
  7. Two witnesses of trust with their id proofs (PAN/ Voter Id/ DL)
  8. Documents of property (Sale deed / Allotment letter / Transfer deed)
  9. Original Documents require in case of Settler/ Trustee
  • Adhar card
  • Pan card
  • Address proof
  • Three Passport size photograph
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