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TRUST REGISTRATION
Trust registration refers to the process of registering a trust under the Indian Trusts Act, 1882. A trust is a legal arrangement where property or assets are held by a trustee on behalf of beneficiaries, who may be individuals or other entities.
The Indian Trusts Act, 1882 provides for the registration of trusts, which gives them legal recognition and enables them to function as a legal entity. The registration process involves submitting an application to the Registrar of Trusts in the state where the trust is located, along with a copy of the trust deed, a list of trustees, and other relevant documents.
To be eligible for trust registration, the trust must have a clear purpose and objectives, which must be charitable in nature. The trust deed must clearly outline the objectives of the trust, the powers and responsibilities of the trustees, and the manner in which the trust will be managed and administered.
Once a trust is registered, it can open bank accounts, own property, and enter into contracts in its own name. The trust must also maintain proper books of accounts and file annual reports with the Registrar of Trusts.
In summary, trust registration in India is a way for individuals to create a legal entity that can hold property or assets on behalf of beneficiaries for charitable or philanthropic purposes. It provides legal recognition to the trust and enables it to function as a formal organization with various rights and privileges.
benefits of Registering a trust
Registering a trust in India offers several benefits. Here are some key advantages:
Legal Recognition
Trust registration provides legal recognition and status to the organization, giving it a distinct legal identity. This recognition enhances the credibility and legitimacy of the trust and allows it to operate within the framework of the law.
Tax Exemptions
Registered trusts are eligible for tax benefits and exemptions. They can receive tax-deductible donations under Section 80G of the Income Tax Act, which encourages individuals and corporations to contribute to the trust's cause. Additionally, income generated from the trust's charitable activities may be exempted from income tax under certain conditions.
Funding and Grants
Registered trusts have access to various sources of funding, including government grants, corporate social responsibility (CSR) funds, and international donor agencies. Many funding agencies require trusts to be registered to consider them for financial support.
Easy Bank Account Opening
Banks often require proof of registration for opening a dedicated bank account for the trust. Having a separate bank account helps maintain financial transparency and makes it easier to manage funds received for the trust's activities.
Organizational Structure and Governance
Trust registration formalities often require the establishment of a proper organizational structure and governance mechanisms. This helps in efficient management, decision-making, and long-term sustainability of the trust.
Perpetual Existence
A registered trust enjoys perpetual existence, meaning it continues to exist irrespective of changes in trustees or members. This ensures continuity of the trust's activities and enables long-term planning and implementation of its objectives.
Enhanced Trust and Credibility
Trust registration helps build trust and credibility among donors, beneficiaries, and other stakeholders. It demonstrates that the trust is committed to transparency, accountability, and ethical practices, thereby attracting more support and collaborations.
Legal Protection
Registered trusts enjoy legal protection in case of any disputes, allowing them to enforce their rights and defend their interests. They have the ability to enter into contracts, own property, and take legal action on behalf of the trust.
Greater Opportunities for Collaboration
Registered trusts have better opportunities to collaborate with other organizations, both within India and internationally. This collaboration can lead to knowledge sharing, resource pooling, and a wider impact on social causes.
Publicity and Recognition
Registered trusts are listed on government portals and directories, which increases their visibility and makes it easier for potential supporters, beneficiaries, and volunteers to find them. This exposure can lead to greater public recognition and support for the trust's mission.
How register a trust in India
To register a trust in India, the following steps are generally required:
Drafting the Trust Deed
A trust deed is a legal document that outlines the purpose of the trust, the names and roles of the trustees and beneficiaries, and the terms and conditions of the trust.
Identification of Trustees and Beneficiaries
Trustees are the individuals or entities responsible for managing the trust, while beneficiaries are those who will receive the benefits of the trust. The names and identification details of both the trustees and beneficiaries will be required during the registration process.
Submitting an Application
An application for registration must be submitted to the relevant authority along with the required documents. The documents include the trust deed, address proof of the registered office, and identity proof of the trustees.
Payment of Registration Fees
A registration fee is usually charged by the government for processing the application.
Once the trust is registered, it is granted legal status and can conduct business, own assets, and enter into contracts. The registration also offers protection to the beneficiaries and ensures that the trust operates according to the terms and conditions outlined in the trust deed.
Documents Required for trust registration
- Name of Trust.
- Aims and Objectives of trust.
- Minimum two member required.
- All members Aadhar card and pan card.
- Electricity bill of registered office of trust.
- Two passport size photographs of settler.
- Two witness with their Aadhar card and passport size photograph.