Summary: The registration of a Non-Governmental Organization (NGO) as a Trust in India is governed by the Indian Trust Act, 1882, alongside other applicable laws such as the Income Tax Act, 1961, and the Societies Registration Act, 1860. To initiate the registration process, at least two individuals must come together to form a Trust, ensuring that they meet specific eligibility criteria, including the non-disqualification of parties involved and alignment with public interest. The registration procedure involves several key steps: selecting a compliant name for the Trust, appointing a settler and at least two trustees, preparing a Memorandum of Association detailing the Trust’s objectives, drafting a legally binding Trust deed, and submitting the deed with necessary documents to the Registrar. Required documentation includes the Trust deed, identity proofs, PAN cards, address proofs, and a No Objection Certificate (NOC) for property usage. Upon successful evaluation by the Registrar, a Trust registration certificate is issued. Registered trusts benefit from government land access, tax exemptions under Section 80G, GST advantages, and legal protections. Additionally, the Trust can operate under the designation “Govt. Regd.”, further enhancing its credibility. Properly drafting the Trust deed is crucial, as it should cover operational terms, registered office details, objectives, and roles of the trustees, ensuring a structured and compliant framework for the Trust’s functioning.
The specified act and rules relating to the registration and obligations defined for the NGO, covers the in the three different aspects like- Trust, Society or Section 8 company.
The procedures for the above specified three different categories are shown separately in different subsequent articles for better understanding and the matters related to the documents and information required for the process.
First starts with the registration procedure for a Trust, defined and obliged under the provisions specified in Indian Trust Act, 1882, define the term of Trust as the relationship between trustor and trustee to hold and maintain the specified benefits for the beneficiaries.
Several laws are applicable in the ambit of the trust registration and related compliances needed to be followed from them. These are:
1. Trust act, 1882
2. Income tax act, 1961
3. Societies registration act, 1860
Before going to the procedure of registration, there are several requirements needed to be considered in mind. These are:
1. Minimum two individuals required
2. Must establish in consideration of the provisions and rules and regulations specified,
3. None of the parties disqualified in any provision of the law,
4. Selected object not in the contravention of the provisions of the act,
5. Trust formation should not be contrary to public interest,
6. Trust activities should be align with the objectives stated in the trust deed.
PROCEDURE FOR APPLYING FOR TRUST REGISTRATION:
1. NAME OF THE TRUST: The parties must choose an appropriate name for the trust that complies with the various provisions related to trademark, copyright and resemblance name of existing trust.
2. SETTLER OF THE TRUST: The next step is the selection of the settler, with the appointment of minimum 2 trustees and they all are the residents of India.
3. PREPARE A MEMORANDUM OF ASSOCIATION FOR THE TRUST: Prepare a Memorandum of Association (MOA) that outlines the objectives and purpose for which the trust is being formed.
4. DRAFT THE TRUST DEED: Create a trust deed that legally bind the trustees and confirm their status and bind them with the objects in a legally manner.
5. SUBMIT THE DEED TO THE REGISTRAR: The author, trustee and beneficiaries should submit the trust deed with the required documents to the Registrar for the registration and approval of forming the trust.
6. OBTAIN TRUST REGISTRATION CERTIFICATE: After checking and evaluating the trust deed and other filled documents, if the Registrar not found any discrepancies, so approve the trust registration and issue the Registration certificate to the Author.
Documents required for the registration of the trust:
i. Trust deed with the requisite stamp value,
ii. Identity proof of the individuals,
iii. Pan cards of the individuals associated with the trust,
iv. Address proof,
v. Noc or other document for use the property,
vi. Address proof of the trust.
Benefits of Registering as a Trust:
There are several benefits in the list for the trust registered under the act. These are as follows:
i. The registered trust can use or get land from the government for the specified objects.
ii. It gets benefited from doing the charitable business.
iii. Trust can access from the tax exemption under Section 80G or any other provided by the Income tax authorities.
iv. Get benefits under Goods and Services Tax.
v. An NGO registered under the Trusts Act can bring into practice with the word “Govt. Regd.” or ‘Regd.’
vi. Provide the trust a legal protection form unnecessary claims.
vii. It enables the transfer of assets to heirs without any probate, streamlining the asset distribution process.
viii. Any other benefits received after getting registration under the act.
The drafting also covers for the professionals or the individual who drafted the trust deed and there are following points that every drafter, would kept in his mind. These are:
i. Term of the trust till work in operation,
ii. Registered office of the trust,
iii. Objectives of the trust,
iv. Information of the individuals connected with the trust like author, trustee, beneficiaries etc.,
v. Tenure and qualification of the individuals,
vi. Roles and Responsibilities of Trustees,
7. Other terms and conditions regarding the code of conduct, activities, alteration in deed, or any other aspect, required to be in the list.
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