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What is Trust

As per the Indian Trust Act 1882, a Trust is an arrangement where the author/ owner (trustor) transfers the property to someone else (trustee) for the benefit of a third person (beneficiary).

Such a property is transferred by the author/ trustor to the trustee along with a proclamation that the trustee should hold the property for the beneficiaries of the Trust.

Who can register the Trust

Any Non Profit Organisations or any Individual holding the property can create and register the Trust. However, the NGOs have following another options also to get themselves registered which are as follow:

(i) Registration under Society Act

(ii) Registration under Section 8 of Companies Act, 2013

However, in case of registration under Society Act, there is requirement to have atleast 7 members of Governing Body, whereas in case of Trust there we need only three members to form a trust.

Moreover, in case of Section 8 companies under Companies Act, 2013, there are a no. of compliances to be followed which are comparative less in case of Trusts. Hence, as compared to above two options, formation and registration of Trust is less cumbersome and less expensive on part of registration and compliances.

Procedure of Trust Registration

Trusts can be classified into two categories:

Public Trust

The most preferred way to run an NGO or a non – profit organization is to form a Public Charitable Trust. It is a trust whose beneficiaries include the public at large. Further, a Public Trust can be further be subdivided into Public Charitable Trust and Public Religious Trust. The public trust may also be formed for following objects like To enhance cultural, academic and social condition of the people, work for democracy, good governance, peace, justice and cooperation., Encourage the people to develop a much better society, Work for rehabilitation of beggars in India, To do programs which help in education etc.

Private Trust

Biggest features of Trust Registration is that, those who want to involve family members as well in Trust can apply for Trust Registration. Hence, a private Trust is the one whose beneficiaries include families or individuals.

Process of Registration of a Trust

I. Minimum no. of members required are:

1. Author/ Settlor of the Trust

2. Trustee

3. Beneficiary

II. Selection of Name: Select a unique name of your trust, the name should not violate or infringes someone else name or trademark.

III. Drafting of Deed: The next step is to draft a trust deed. The trust deed is to be executed on appropriate non-judicial stamp paper, where the rate of stamp duty differs from state to state.

The settler must put his signatures on every page of the photocopy of the Trust Deed. Also, it is mandatory for the settlers as well as two other witnesses to be physically present along with their identity proof (original as well as self attested photocopy) at the time of registration.

IV. To obtain an appointment with the sub-registrar office having jurisdiction based on the registered office of the trust

V. Trust Registration: A trust deed is a document which requires mandatory registration before the registrar of the trusts having jurisdiction. On the appointed date the trust deed is presented before the sub-registrar where all trustees need to be present along with two witnesses. The registration process is then undertaken by the office of the sub-registrar.

VI. Obtain the Registration Certificate: After submitting the Trust Deed with the registrar, the registrar retains the photocopy and returns the original registered copy of the Trust Deed.

Documents required for Trust Registration are:

1. Trust Deed: The trust deed is the most important instrument in a trust, it prescribes the main objectives for which the trust is set up. Apart from the main objects of the trust, it defines its beneficiary and the powers of the trustee. The deed is signed in presence of two witnesses. The trust deed should have provision concerning the management of the trust along with the procedure of appointing or removing the members.

2. Passport size Photographs of all the parties to the trust deed

3. PAN Card of Each party to the trust

4. Adhaar Card of Each party to the trust

5. Rent Deed/ Registry copy fo teh property where teh address of trust is to be provided

6. Utility Bill of the Registered address of the Trust

Conclusion: Hence, instead of registration of societies or Section 8 companies by the non Government Organisations, it is quite less expensive and less time consuming process to get the Trust Registered for the benefits of the General Public

Disclaimer: The author is based at Jalandhar and is practicing company Secretary and a Certified CSR Professional who deals in matters pertaining to Corporate Social Responsibility. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Authors recommend that professional advice is sought before taking any action on specific issues. The author can be however contacted for further clarification at 99145-58709 or via mail at [email protected]

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Author Bio

Hi, This is CS Mohit Saluja, Graduate in Law and Post Graduate in Commerce & a Fellow member of the Institute of Company Secretaries of India, New Delhi, having more than 10 years of stringent experience in the field of Secretarial and RBI Matters, Company Law Board (CLB), Regional Director (RD) View Full Profile

My Published Posts

Directorship In Indian Companies By “Persons Resident Outside India” Extension of Due Date of AGM for holding of AGM in 2021 Requirement of CSR-1 Form by NGOs/Societies/Trust to avail Corporate Funding LEI: Legal Entity Identifier Code and its necessities Small Companies Under Companies Act 2013: Its Benefits/ Privileges View More Published Posts

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8 Comments

  1. Amarjit Singh Sandhu says:

    I want to register a charitable trust in the name of my late wife to help needy girls in education in Tarn Tarn Distt.
    How to proceed?

  2. H.Singh says:

    Wish to donate unpartitioned agriculture land in district jalandhar to a local charity. Is it possible to put my unpartitioned land from joint share into trust or i have partition my share before it can be put in charity trust.

  3. Pardeep Sharma says:

    There is a Universal infrastructure trust made by a person Gurmukh singh Walia and purchased Mullanpur cricket stadium land and resold back to a cricket body..let me know how to find.. Regards Pardeep Sharma Chandigarh

  4. Inderjit Singh says:

    मैं एक ट्रस्ट बनाना चाहता हू जी क्या आप मेरी मदद कर सकते हैं।
    Name :
    Punjabi Sikh Khatri Welfare Trust Punjab

  5. Susette Biber-Klemm says:

    Good Morning
    I assume you are a lawyer with competences in the law of association.
    I am the manager of a small European NGO that financially supports a charitable organisation in Pakistan.
    Can you inform, what formalities we must complete to legally transfer funds from Europe to Pakistan?
    This information is very difficult to find from here.
    Thank you for your help
    S. Biber

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