Trust Registration

Overview of Trust Formation in India

In India, the formation and regulation of trusts are governed by the Indian Trusts Act, 1882. Trusts are categorized into two main types: Private Trusts and Public Trusts. Private Trusts are typically set up for the benefit of specific individuals or families, while Public Trusts serve broader purposes like charity, education, and religious activities, benefiting the public at large.

While the Indian Trusts Act governs Private Trusts, Public Trusts may fall under different state-specific laws, such as the Bombay Public Trusts Act for trusts in Maharashtra. Understanding these regulations is crucial to ensure compliance and secure the legal benefits associated with registered trusts

Types of Trusts in India

• Private Trusts:

  • Formed for the benefit of specific individuals or families.
  • Governed by the Indian Trusts Act, 1882.

• Public Trusts:

  • Established to benefit the general public through charitable, educational, or religious activities.
  • Often governed by state-specific laws, depending on the location of registration.

• Societies:

  • A society is formed to promote activities related to science, arts, and commerce, operating on a non-profit basis.
  • Regulated under the Societies Registration Act, 1860.

• Section 8 Companies:

  • Non-profit companies formed under Section 8 of the Companies Act, 2013, with objectives such as promoting education, arts, science, and sustainable development.
  • These entities cannot distribute profits and must reinvest them to further their charitable objectives.

Benefits of Trust Registration

Registering a trust in India offers several advantages:

• Facilitates Charitable Activities: A registered trust can engage in various charitable activities, contributing to social welfare and community development.

• Tax Exemptions for Donors: Donors to the trust can claim tax exemptions under the Income Tax Act, 1961, making it easier to attract donations.

• Legal Compliance: Registration ensures that the trust operates within the framework of the Indian Trusts Act, 1882, and other relevant laws, safeguarding its assets and activities.

Objectives of Trust Formation

The primary objective of forming a trust is to promote non-commercial activities that contribute to social good. These activities can span various sectors, including education, science, arts, and environmental conservation. Registering a trust is vital for:

• Ensuring regulated and lawful conduct of trust activities.
• Promoting societal development and welfare.
• Claiming income tax benefits under Sections 12A and 80G of the Income Tax Act.
• Serving the public interest, especially in the case of public trusts.
• Complying with legal requirements for the smooth operation of trust activities.

Eligibility Criteria for Trust Formation

To form a trust in India, the following criteria must be met:

Procedure for Trust Registration

• Choose a Trust Name: The trust’s name should not violate any laws related to trademarks, copyrights, or the Emblems and Names Act, 1950.

• Select Settlers and Trustees: Decide on the settlers and trustees for the trust. A minimum of two trustees is required, and they must be Indian residents.

• Draft the Trust Deed: The trust deed is a crucial document that includes details such as the trust’s name, registered office, objectives, and the roles of trustees and beneficiaries.

• Submit the Trust Deed to the Registrar: Once the trust deed is finalized, it must be submitted to the Registrar of Trusts along with the required documents.

• Obtain Certificate of Trust Registration: Upon satisfactory review, the Registrar issues a trust registration certificate, which is essential for the trust’s operations and legal standing.

Documents Required for Trust Registration

• Trust Deed with Appropriate Stamp Duty: A legally binding document with the necessary stamp duty paid.

• PAN Card of All Trustees: PAN cards for each trustee involved in the trust.

• Address Proof of Trustees: Valid documents such as Aadhaar Card or Voter ID for address verification.

• No Objection Certificate (NOC) for the Premises: NOC from the property owner if the trust premises are not owned by the trust.

• Utility Bill as Proof of the Registered Office: A recent utility bill to establish the address of the registered office.

• 12A and 80G Certificates from the Income Tax Department: Certificates for tax exemptions under sections 12A and 80G.

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• Seamless Paperwork: We handle all the documentation efficiently, ensuring compliance with legal requirements.

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