Registration

Definition

A trust is a convenient method whereby a limited number of persons may hold property on behalf of other persons, who may be a large or fluctuating body or who may include persons not yet born. Once the property has been vested in the trustees, they own the property, but they are compelled by law to exercise their ownership for the benefits of the beneficiaries and for them only. It means that legal ownership vests in the trustee or trustees but beneficiaries have de facto ownership.

Pre-requisites for registration of NGO:

There is/should be:

1. A founder/settler/author of trust;
2. Person(s) called trustee/trustees;
3. A property of the trust which the settler gives;
4. A person capable to enforce that obligation called cestuique trust;
5. Beneficiaries who will enjoy benefits out of that property;
6. An intention of the author or founder to create a trust;
7. The purpose of the trust;
8. Transfer of the property to the trustees.

Conditions for creation of a trust:

1. The settler has to give up ownership and all beneficial interests in the property,
2. The property should be clearly described,
3. The objects or purposes for creation of trust should be clearly indicated,
4. Formal deed or any other writing not required intention to create a trust may be shown through words. However, it is advisable to have a written trust deed for all practical purposes,
5. The settler must be a person competent to contract,
6. The trust property must be properly transferable to the beneficiary. It must not be a merely beneficial interest.

FAQs on Trust Registration:

Is it mandatory to have Trust deed?

A deed isn’t mandatory for the formation of a trust. A trust can be formed by a deed or a mere oral agreement. However, it is advisable for charitable trusts and trusts with immovable property to have a trust deed. In some cases where trust deed is not available, documents such as revenue records for lands, property tax receipts, affidavits and other such documents, may be accepted in the place of a formal trust deed.

Procedure and Steps Taken for registration of trust

• Step 1 - Choose an appropriate name for trust
• Step 2 - Determine the settler/author and trustees of the intended.
• Step 3 - Drafting of Memorandum of Association (MOA) and rules & regulations of proposed trust.
• Step 4 - Drafting of all other required documents.
• Step 5 - Submit the trust deed and all other required docs with the local registrar
• Step 6 - Verification of documents / forms by Registrar.
• Step 7 - Issue of Certificate of registration of trust.