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    Trust Registration in India

    Trust Registration is one of the best business structures that has been created by entrepreneurs in order to support charitable, religious as well as private purposes. A trust has a noble intention of promoting the development of sciences, literature, and other noble causes. It has been formed to manage the assets for the benefit of a specific group or public welfare. Usually, the trust registration has been governed by the Indian Trusts Act, 1882 for private trusts and the Public Trusts Act (specific for each state) for public trusts.

    Trust registration is a crucial legal step for those who want to do something for the welfare of their society and nation. It is critical for establishing a trust for non-profit or charitable objectives in order to make sure about smooth operations and compliance with legal obligations.

    At Click To Professionals our expert team of professionals is always ready to assist you throughout the registration process and also make sure about smooth registration of your dream trust.

    What is a Trust?

    Before moving ahead let’s understand what actually a trust is? Basically, a trust has been established by individuals in order to transfer a specific portion of their assets or property for the benefit of a third party. We can say that trust is a relationship among trustees, trustors and beneficiaries based on trust and confidence.

    In other words a trust has been defined as the relationship between the trustor and trustee to hold specific benefits for the beneficiary.

    Types of Trust in India

    Public Trust

    Public Trust has been created for charitable purposes including education, healthcare, poverty alleviation as well as social welfare or for religious purposes that include promoting religious activities and managing religious institutions.

    Private Trust

    This type of trust has been formed for the benefit of a specific group of individuals including family members, minors, or dependents which is governed by the Indian Trusts Act, 1882.

    Public-Cum-Public Trust

    This type of trust is specifically established to serve both charitable as well as private beneficiaries.

    Different Parties Involved in Trust Registration Process

    In the trust registration process, there are mainly three parties involved which are as given below:

    Trustor

    A trustor is basically the founder of the trust who establishes the trust. In that way the trustor is the owner of the assets or property that has been placed in the trust.

    Trustee

    Trustee is the individual or entity who is responsible for the management and overseeing of the trust. They hold and administer the trust property on behalf of the trustor and for the benefit of the beneficiary.

    Beneficiary

    The beneficiary is the third person for whom the trust has been created. Basically they are the recipient of the benefits, assets, or property that have been held within the trust. In other words, we can say that, they are the third party which are known to both trustor as well as trustee and also are entitled to receive benefits as per the terms and conditions of the trust.

    Legal Framework That Govern Trust Registration in India

    This act will provide the legal framework for the registration and administration of private trusts in India. It highlights the rights, responsibilities, as well as procedures that have been associated with the registration of private trust.

    The public trust in India has been governed by public trust acts. These acts are different for different states like The Maharashtra Public Trust Act, 1950 or The Gujarat Public Trust Act, 1950.

    The Income Tax Act, 1961 will avail the certain tax benefits and exemptions to registered trusts. Donors can also enjoy the tax deductions as per this act when making contributions to registered trusts.
    FCRA i.e. Foreign Contribution Regulation Act, 2010 governs foreign donations to trusts.

    Benefits of Trust Registration in India

    Legal Recognition

    A registered trust is a legal entity that will get the protection under Indian Law. it will make sure about transparency, credibility, as well as legal compliance.

    Perpetual Existence

    After registration, the trust will become an independent entity so its existence continues even beyond the lifetime of its trustees or founders.

    Credibility & Fundraising

    Registration will help in improving credibility of trust and make it easier for trusts to receive donations for individuals, corporates, as well as foreign contributors.

    Tax Benefits

    Charitable trusts with registration can enjoy the tax benefits as per Section 12A & 80G of the Income Tax Act, 1961. It will also help donors in claiming tax benefits while contributing to the trust.

    Asset Protection

    Registration of trust will make sure that assets will be managed as per the stated objectives. It will also reduce the risk of misuse or mismanagement.

    Legal Recognition

    A registered trust is a legal entity that will get the protection under Indian Law. it will make sure about transparency, credibility, as well as legal compliance.

    Perpetual Existence

    After registration, the trust will become an independent entity so its existence continues even beyond the lifetime of its trustees or founders.

    Credibility & Fundraising

    Registration will help in improving credibility of trust and make it easier for trusts to receive donations for individuals, corporates, as well as foreign contributors.

    Tax Benefits

    Charitable trusts with registration can enjoy the tax benefits as per Section 12A & 80G of the Income Tax Act, 1961. It will also help donors in claiming tax benefits while contributing to the trust.

    Asset Protection

    Registration of trust will make sure that assets will be managed as per the stated objectives. It will also reduce the risk of misuse or mismanagement.

    Minimum Requirements for Registration of Trust in India

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    Step-By-Step Process of Trust Registration in India

    Firstly, define the purpose of trust clearly. Just make sure that objectives of trust must align with legal as well as charitable principles.
    A trust must have at least two trustees including the founder. The number of trustees may vary as per the trust deed who are responsible for the management of the trust.
    The name of the trust must be unique and should not violate any existing laws or trademarks
    After that, draft a trust deed which is a legal document that includes all the details of the trust like objectives, power of trustees, name of the trusty, details of founder & trustee as well as governance structure. It should be printed on stamp paper.
    The trust needs to register an address where official communications will be sent. You can use a rent agreement or utility bill as proof.

    The founder and trustees have to visit the sub-registrar office along with two witnesses for registration where the following steps will take place:

    • Submission of the trust deed and supporting documents
    • Verification of documents
    • Payment of the required registration fees
    • Biometrics and photographs of the trustees
    After the successful verification, you will get the trust registration certificate issued by the registrar.
    A registered trust needs to apply for PAN i.e. Permanent Account Number and TAN i.e. Tax Deduction and Collection Account Number for financial transactions and tax compliance.
    After that, the trust needs to apply for 12A registration in order to enjoy tax exemptions on income and for 80G registration in order to allow donors to claim tax deductions.

    Essential Documents Required for Registration of Trust in India

    Section 8 Company Registration

    Post Registration Compliance for Trusts in India

    Annual Compliance

    Income Tax Filings

    TDS Compliance

    FCRA Registration

    Governance & Meetings

    How Can We Help With Trust Registration in India?

    Our dedicated team of experts will offer you the professional assistance in the following ways:

    Why Choose Click To Professionals?

    We will handle all legal and procedural aspects, making sure about a smooth registration.

    We will make sure that all legal obligations have been met for trust registration in India

    Our dedicated team has in-depth knowledge of company law and regulatory requirements

    We will provide cost-effective solutions as per your needs

    Section 8 Company Registration