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Trust registration in India
Trusts are created to focus on the development of sciences, literature and other noble causes like relieving scarcity, consenting education to the needy , and giving medical support. It is mandatory to complete trust registration in order to complete the whole process without any hassles.
Since the trusts are irreversible, they cannot be shifted or cancelled without the court's permission. Trust registration may seem like a very long process. But the Whole registration process can be simplified and completed in just a few steps. With a few benefiting papers, such as a deed of trust and rental agreement.
Step 1: Choose a Suitable Name for the Trust
Choose a unique and relevant name for the trust. Ensure that the proposed name is not similar to the name of an existing registered trust or any other entity.
Step 2: Create a Trust Deed
A trust deed is a legal document that outlines the objectives, rules, and regulations of the trust. The trust deed should include the following information:
- Name and address of the trustees: Mention the names, addresses, and occupations of all the trustees.
- Name of the trust: Clearly specify the name of the trust.
- Objectives of the trust: Clearly define the objectives and purposes for which the trust is being created.
- Details of the trust property: Provide details of the property or assets that will be entrusted to the trust.
- Mode of appointment and removal of trustees: Specify the procedure for appointing and removing trustees.
- Rules and regulations: Outline the rules and regulations governing the functioning of the trust.
- Method of amending the trust deed: Specify the procedure for amending the trust deed if necessary.
Step 3: Stamp Duty and Notarization
Stamp duty must be paid on the trust deed based on the value of the trust property. After paying the stamp duty, the trust deed should be executed on non-judicial stamp paper. The trust deed must be signed by the settlor and trustees in the presence of at least two witnesses.
Step 4: Register the Trust Deed
To register the trust, the trust deed must be submitted to the local registrar along with the following documents:
- Application for registration: Submit an application for the registration of the trust.
- Covering letter: Provide a covering letter with details of the trust and the documents being submitted.
- Trust deed: Submit the original trust deed along with a photocopy.
- Proof of address: Provide proof of the address of the trust and the trustees.
- Identity proof: Submit identity proof of the trustees.
Step 5: Payment of Registration Fees
Pay the required registration fees, which vary depending on the value of the trust property.
Step 6: Verification and Approval
The registrar will verify the documents and, if everything is in order, approve the registration of the trust. Once approved, the trust will be issued a registration certificate.
Step 7: Post-Registration Formalities
After registration, it is advisable to open a bank account in the name of the trust. The trust can also apply for tax exemptions, if applicable.
Important Points to Note:
What Does a Trust Deed Contain?
- Name of the Trust:
- Clearly specifies the name by which the trust will be known.
- Details of the Settlor:
- Provides information about the person (settlor) who establishes the trust and transfers assets into it.
- Details of the Trustees:
- Names, addresses, and occupations of the individuals or entities appointed as trustees. The trust deed may also outline the procedure for the appointment and removal of trustees.
- Objectives and Purposes of the Trust:
- Clearly defines the objectives and purposes for which the trust is created. This section outlines the specific goals and mission the trust aims to achieve.
- Trust Property:
- Describes the assets, funds, or property that the settlor transfers into the trust. This section may include details such as the nature of the assets, their value, and how they will be managed.
- Beneficiaries:
- Identifies the individuals, groups, or entities (beneficiaries) who are intended to benefit from the trust. The trust deed may specify the criteria for determining beneficiaries and the distribution of benefits.
- Rules and Regulations:
- Outlines the rules and regulations that govern the operation of the trust. This includes how decisions are made, meetings are conducted, and any specific guidelines for the trustees to follow.
- Amendment Clause:
- Specifies the process and conditions under which the trust deed can be amended or modified. This helps ensure flexibility while maintaining a structured framework.
- Dissolution or Termination Clause:
- Defines the circumstances under which the trust may be terminated or dissolved. This may include conditions such as the achievement of the trust's objectives or the occurrence of a specific event.
- Governing Law:
- Indicates the jurisdiction and legal system under which the trust operates. This helps determine which laws and regulations govern the trust's activities.
- Execution and Signatures:
- Contains the signatures of the settlor, trustees, and witnesses. The trust deed must be executed in compliance with legal formalities, and the signatures often need to be notarized
Constitution of the Trust
The Board of trustees is created by the Trust. The following individuals make up the Board:
- Creator, Settlor, and author of the trust
- Management trustees
- Other trustees
Benefits of Trust Registration
Establishment of Charitable Undertakings
By registering a charitable trust in India, one can conduct multiple humanitarian endeavours. You can benefit a lot of individuals by stating in the bylaws the justifications for the trust's registration in India.
Aid to Children
If you're looking to secure your children's future, then private trust registration in India is the best option, and you can conveniently register online by using private trust registration online.
Tax Exemptions
Online trust registration offers tax protections. Generally speaking, a trust is compared to an NGO. Therefore, public trusts in India are eligible for tax benefits if they register as charitable trusts under the Income Tax Act Sections 12A and 12AA.
Helping Individuals
A trust established in accordance with Section 12A aids in trust online registration as well as the consolidation of an organisation whose main goal is to assist as many people as possible.
Simple Integration
Online trust registration process is simple. The procedure is very easy to implement. Simply complete the trust registration form using the proper format. Reach out to Vakilsearch and initiate the process. We will help in promptly procuring the trust registration certificate..
Family Wealth Protection
In India, registering a private trust is seen as being of the utmost importance for those who want to safeguard their own property.
Setting up Temples
Trust registration online makes it possible for you to form an entity that can ultimately amalgamate a temple via the temple trust registration process.
Documents Required for Trust Registration Online
In order to register a private trust in India the following documents has to be provided
Documents of the Trustee
- Name of the trustee
- Employment
- Address
- Age
- Assignment
- Contact Information
- Photographs
- Government recognised address proofs
Proof of Office's Ownership
- Electricity Bill
- Home Tax receipt
- NOC
Witnesses and Settlers
- Two witnesses are expected to sign during registration
- The migrant should also be existing at the time of enrollment
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