What is a registration of trust?
Trust is a form of NGO. It’s a Legal Entity created the First Party (Founder of the Trust), managed by the Second Party (Trustees) who holds the right, for the benefit of the Third Party (Beneficiaries of the Trust).
The Trust can be created by way of Trust Deed duly executed by the ‘Founder’ of the Trust. The Trust Registration in Chennai or Coimbatore or anywhere in India is governed by Indian Trust Act, 1882.
There are two types of Trusts, Public Trust and Private Trust. A public trust (charitable trust) is created for the benefit of general public whereas a private trust is created for the benefit of a particular group of individuals known as the beneficiary.
Who can form a Trust or trust formation in india
According to Section 7 of Indian Trusts Act, 1882, a trust formation in India may be created by the following persons:
1. Every person competent to contract (given in Section 11 of Indian Contract Act, 1872);
2. Hindu Undivided Family;
3. Association of Persons (AOP);
How to Register a Trust
One can Register a trust with the help of a Law Firm specialised in NGO Registration Services, for which a properly drafted Trust Deed to be duly signed by the Founder and that need to be Registered. The Trust deed must consist the details like Name and address of Founder, Address of the Trust office, Object of the Trust and Regulation of the Trust. The duly signed Deed need to be signed by the Founder and witnessed by two people. TO make a trust effective, it need to be registered before the Sub-Registrar office at the specific locality.
Types of Trusts
Public Charitable Trust:
Under the Public Charitable Trust, Beneficiaries are uncertain (For Ex: Benefit of the humanity at Large). But whereas the Beneficiaries of Private Trust is small group of specific people (For Ex: Benefit of the Specific group of Employees).
A Public Trust is eligible for all types of Tax Benefits. But whereas the Private trust is not entitle to get 12A Registration. Which simply to say, a Private Trust is not capable of enjoying Tax Exemption.
Documents required for trust registration
The following documents are required for trust registration, Whereas the trust founder is to start and register their Trust.
- Address and Proof and ID Proof of the Founder of the Trust
- Address proof and ID Proof of the Witnesses
- Address proof of the Trust office (Rental Deed)
- The Trust founder must present in Sub-Registrar office on the Registration date.
For what object Trust are formed
As per the Indian Trust Act, the Purpose of forming a Trust should specifically for the purpose of Charity with the below object:
- General charity
- Religion /Rural upliftment
What are the private trust and public trust difference
|Meaning||The founder assigns the property to the Trust for the gain of the Beneficiaries.||A group of People joined together for the common purpose.|
|Act||Indian Trust Act, 1882||Society Registration Act, 1860|
|Requirement||A Founder and Two Trustees (Founder himself can also be a Trustee||Seven Members|
|Management||Trustees||Office Bearers (President, Secretary, Treasurer)|
|Voting System||No Voting system in Decision making||Voting system governs the Society|
|Geographical Operation||All India Operation (No Need to mention in the Trust Deed)||A Separate Registration needed for All India Operation|
|Name Approval||Availability or Name check not needed||Name Check and availability is a Process|
We expect in the process of registering the Trust registration in Tamilnadu