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TRUST REGISTRATION

Income Tax Act, 1961, defines a Trust as “An arrangement by which property is handed over to or vested in a person, to use and dispose off for the benefit of another person”. Creation of a Trust can be broadly classified into two methods namely private trust formation and public trust formation. In this article, we look at how to register a Trust in India in detail. 

Private Trust Registration: 
A private trust may be created either inter vivos or by will. A private trust is for a closed group. In other words, beneficiaries can be identified. Eg: A trust created for the relatives and friends of the author. The creation of Trusts is subject to the provisions of the Indian Succession Act, 1925.  

Public Trust Registration:
Similar to private trusts, public trusts may be created either inter vivos or by will. Public trust is created for a large groupie. the public in large. Eg: Non-Profit NGO’s Charitable Institutions for the general public.

A trust may be created by every person who is competent to contracts: This includes an individual, AOP, HUF, company, etc

If a trust is to be created by on or behalf of a minor, then the permission of a Principal Civil Court of original jurisdiction is required.

The main objective of the trust is that the trust should be created for a lawful purpose.  All purposes are said to be lawful unless it:

1. Is forbidden by law
2. Defeats the provisions of law
3. Is fraudulent
4. Involves injury to another person or his property
5. Immoral or against public policy

​Trust Deed is the most important document which defines the formation of trust, its functions, and its closure. Important clauses of Trust Deed are:

1. Name of Trust
2. Registered Office
3. Objectives
4. Areas of Operation
5. Details of Assets of Trust
6. Details of the founders
7. Details of Board of Trustees
8. Powers & Functions of Management
9. Quorum of board
10. Amendment and closure of Trust Deed

Documents Required for registration of Trust are:

1. ID Proof of Founder
2. Ownership Document (in case of owned premises)
3. Rent Agreement (in case of rented premises)
4. Minimum 2 witnesses

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