Trust registration in India

Are you thinking of an appropriate form of organization for your social services? Then trust is the right form for you!

REGISTER YOUR TRUST NOW

MEANING OF TRUST

Trust is an organization where the owner (trustor) handover the estate to another person (trustee) for the convenience of a third person (beneficiary). Such a estate is convey by the trustor to the trustee together with a declaration that the trustee shall sustain the estate for the beneficiaries of the Trust. Trust refers to a responsibility which is attached to the possession of the property arising out of a trust reserved and accepted or declared and accepted by the owner, for the benefit of another, or owner or both.

DOCUMENTS REQUIRED FOR TRUST REGISTRATION

Identity Proof

PAN card of for all trustees & settler.
Voter identity card /Driving License /Passport for all trustees & settler.

Photograph

Passport size Photograph for each trustees & settler

Address proof of trustee & settler

Self attested Latest Electricity Bill/ Bank Statement with latest entries/ Telephone Bill/ Mobile Bill.

Registered office proof

Rent Agreement, Rent receipt & NOC of landlord (if rented).
Electricity Bill/ Property tax receipt/ Water Bill Receipt (if owned).

Email ID & Mobile Number

Email ID & Mobile Number of trustees & settler.

Trustee List & Consent letter

List of all trustees Consent letter of Trustees.

TYPES OF TRUST

Public Trust	Private Trust	Public-cum-Private Trusts
The Private trust is created for the Public or for the benefit of any class. The public trust can be categorized into two types religious and charitable trust. Due to its simple creation and easy to manage feature trust public trust is known to majority of the people as compared to other trust. public trust is also permanent in nature.	Private Trust refers to a trust which is formed for the benefit of one or more persons and for a specified period. The Indian Trust Act, 1882 governs the Financially Trusted Trustees. Private Trust may be established between Vivos or wills.	The combination of public trust and private trust is known as public cum private trust. The proportion of the profit from the trust shall be used for both public as and for private persons or individuals. This type of trust shall be eligible for exemption in respect of the proportion of income for public and private purpose as per the proportion.

TRUST DEED

A trust can be formed by a trust deed or by an oral agreement. Trust deed is generally not mandatory. However, it is always advisable for trusts possessing immovable property to have a written trust deed. In case of non-availability of trust deed, documents such as property tax receipts, land revenue records, affidavits and other documents shall act as a substitution to registered trust deed.
A Trust Deed is legal evidence proving the existence of trust an. It contains the rules and regulations & bylaws regarding the changes, removal or addition of the Trustees and other working of trust.
The Trust deed includes the following clauses:

Name of the trust
Objectives
The registered office of the trust
Area of operation of the trust
Details of Trust Author
Assets of the Trust
Details of Board of Trustees
Board Quorum and their qualification, terms and tenure
Powers and functions of all Trustees
Closure and amendment of the trust deed
Applicability of the Act

BOARD OF TRUST

Author/Founder/Settlor of the trust – Author is the owner who transfers the property.
Managing trustee(s) – Author of the trust transfers ownership in favor of the trustee.
Beneficiary (Other trustees) – A person who is going to be benefited by the formation of trust.

PROCESS OF TRUST REGISTRATION

APPLICATION FOR REGISTRATION

For Trust registration an application shall be made to the official of the jurisdiction for Trust registration. The application must include details like name of trust, names of Trustees, mode of succession, etc. The application shall be accompanied by a certified copy of the Trust deed.

PAYMENT OF COURT FEE & REGISTRATION FEE

The court fee stamp and a nominal Trust registration fee depending on the Trust property and the State of registration shall be included in the application must include.

SUBMISSION OF APPLICATION

After submitting the trust registration form and the Trust Deed with the registrar, the registrar shall retain the copy and returns the registered original copy of the Trust Deed.

CERTIFICATE OF REGISTRATION

After completion of all the formalities Trust registration certificate shall be issued.

Frequently asked questions

What is meant by TRUST?

Under the Indian Trust Act 1882, a Trust is an organization where the owner (trustor) handover the estate to another person (trustee) for the convenience of a third person (beneficiary). Such a estate is convey by the trustor to the trustee together with a declaration that the trustee shall sustain the estate for the beneficiaries of the Trust.

What are the kinds of trust?

Kind of Trust (Type):
Trusts can be categorize into two class:

Public Trust
Private Trust

What is Public Trust?

A Public Trust whose assignee includes the public at large. Moreover, a Public Trust can be further bifurcated into Public Charitable Trust and Public Religious Trust.

What is Private Trust?

A private Trust means whose recipient includes their families or specified individuals. moreover, a Private Trust can be further bifurcated into:

Private Trusts whose beneficiaries and their obligatory shares both can be determined.
The Private Trusts whose both or either the beneficiaries and their requisite shares cannot be determined.

What are the essential requisite for registration of trust?

Declaration is clear and binding on the author of the trust.
Mandatory transfer of the ownership in favor of the trustee by the author of the trust.
A Trust property.
Concise and clearly specified objects of the Trust.
Once the private trust gets closed, donation of all the properties of the trust donated to other trust and nothing can be held with the trustees.

What is trust deed?

Trust Deed refers to an legal evidence of Trust’s existence which contains the rules and regulations & bylaws regarding the changes, removal or addition of the Trustees. Trust deed is optional for the formation of a trust. A trust can be formed by a deed or by an oral agreement.

What are the steps involved in formation of trust?

Making application to the respective authorities.
Payment of court stamp fee and Trust registration fee.
After filling trust registration form signing before the officer.
Submitting trust deed and its copy, copy is retained by registrar.
Finally registration certificate is issued.

Who all constitutes the of trust?

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

What compliances required for registration of trust?

PAN of trust
Income tax return filing
Audit of Trust (if required)
Accounting
Book Keeping of trust.

Do trust is also required to pay income tax?

Yes, alike other entities trust is also liable to pay tax. Trust may avail exemption from paying income tax by obtaining certification for the exemptions from the Income Tax authorities. For the purpose of availing the exemptions, Trust is required to get its trust deed registered.

COMPARATIVE START UP STRUCTURE

BASIS	TRUST Register Now	SOCIETY Register Now	SECTION 8 COMPANY Register Now
Basic Document	Trust Deed	Bye-Laws	MOA & AOA
Object	A trust is an agreement between parties, whereby one party holds an asset for the benefit of another party.	Society is a group of persons, who join together for the initiating any literary, scientific or charitable purpose.	NGO in form of section 8 company enjoys all advantages of limited companies.
Governing Legislation	Indian Trusts Act, 1882	Indian Societies Act, 1860	Companies Act, 2013
No. of Members Required	Minimum 2 person required and these person may be the artificial person created under the law.	Minimum 7 members are required for formation of state level and 8 members from different states each required for national level and these should be individual only.	2 for Private limited company & 7 for public limited company.
Ownership	Trustees are the owner of Trust properties.	Properties of the society are own by society itself.	Section 8 company is the owner of all properties.
Stamp duty	Non-Judicial Stamp duty is required as per the State Stamp Act and it depend on the value of the Trust property.	No stamp duty.	No stamp duty.
Authority for Registration	Sub-Registrar of the relevant area.	Registrar of Society of the area where premises of society is located.	Registrar of the Companies.
Management Board	Trustees	Governing Body	Board of Directors
Meetings	Board of Trustees	Governing Body meeting as per bye-laws	Board of Directors
Grant of subsidy by the government	Low preference	Low preference	High preference
Annual Filing	No such requirement	Filing of Audited Financials & list of Governing Body	Audited Financials & Annual Return
Area of operation	The geographical area of operation of a Trust is all India.	It has to take all India registration for country-wide operations.	The geographical area of operation of is all India.
Foreign Contribution Regulation Act, (FCRA) registration	Less preferred	Less preferred	Most preferred
Compliance	Low	Medium	High
Voting Rights	Equal Rights to All Trustees	Equal Rights to All Members	As per Shareholding
Dissolution	Public trust cannot be dissolved.	Societies may be dissolved with the approval of at least three-fifths of the society’s members.	It can be dissolved in according with provisions of companies act.