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Public Trust is the most convenient way of starting a non-governmental organization or NGO. Trust Registration in India begins with the drafting of a Trust Deed. Trust Deed is the primary requirement in the process of Trust Registration in India. A trust functions on the objective of eradicating poverty, providing education to the underprivileged and offering medical relief apart from the generalized aim of promoting arts, science and literature. It is to be noted that trusts are irrevocable which means they cannot be amended or terminated without the permission of the court. In India, there are no specific laws to govern the public trust, however, some states like Maharashtra and Tamil Nadu have their own public trust Act.
ComplianceIndia can be your legal and professional partner in India to help you understand how to get Trust Registration in India quickly and cost-effectively.
Advantages of Trust Registration
To indulge in some charitable activities
To avail the benefits of tax exemption
Provides Benefits to Poor and Underprivileged People
Preservation of Family Wealth
Prerequisite for Trust Registration
The very first requirement in the Trust registration is the Trust deed. Trust Deed is formed on a non-judicial stamp paper; every state in India has fixed its own rate on the stamp duty. The applicants are required to book an appointment with the office of sub-registrar once he/she is done with the preparation of Trust Deed.
It is essential for all the trustees of the Trust to appear before the sub-registrar on the date of appointment along with the Trust Deed and two witnesses.
How we Work?
Rs. 12,999/- only
- – Drafting of Trust Deed
- – Trust Registration
- – PAN and TAN Registration
- – Current Account Opening in your nearest Branch
- – Legal Drafting of documents
- – Annual Compliance for First Year
- – Expert advice from Experts/ Legal Professionals
Documents Required for Trust Registration
Comparison with other forms of Business
|Particulars||Trust||Society||Section 8 Company|
|Meaning||It is considered to be the oldest form of charitable organisation. It is an arrangement between par ties whereby one party holds ownership over property on behalf of another person||It is formed when a collection of people come together for a common charitable purpose. But it is not limited to charitable purposes but may extend to multiple other fields.||It is a company established with the purpose has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object and whereby they apply any profits into furthering the objective.|
|Governing Legislation||A trust is established under and governed by the Indian Trust Act, 1882 for private trusts. General law is applied for public trusts except in a few states such as Gujarat and Maharashtra, which have their own state laws.||Societies Registration Act,1860.||Companies Act, 2013|
|Registered as||NGO/NPO||NGO/NPO||NGO/NPO. But they enjoy all the privileges of a limited company without the need for them needing to add Pvt. Ltd. to the name.|
|Document of constitution||Trust Deed||MOA (memorandum of association) and Rules and regulations||MOA and AOA (articles of association)|
|Registration Authority||Deputy Registrar of the state||Registrar or Deputy Registrar of the particular state in which it is to be registered.||Registrar of Companies (ROC) or Regional Director|
|Minimum members required at State level Registration||2 trustees minimum||7 members minimum (5 for Jammu and Kashmir and Telangana)||2 directors and 2 shareholders. It should be noted that the directors may also be the shareholders.|
|Minimum members required at National level Registration||2 trustees minimum||8 members minimum from 8 different states are required in National level Society.||2 directors and 2 shareholders. It should be noted that the directors may also be the shareholders.|
|Foreigners as Members/ Directors||No restriction||Not Prohibited by law||Allowed|
|Annual compliances||There are no mandatory yearly compliance to be met by a trust||The society must file the list of names, occupations and address of the managing committee members of the society to the Registrar annually||The Company must file the annual returns and accounts with the ROC.|
|Grants and subsidies from the government||Not much||Not much||Considerable (possible)|
|Preference in registration under FCRA||Low preference||Low preference||Preferred|
|Registration under The Income Tax Act, 1961||Allowed||Allowed||Allowed|
|Area of Operation||Most of India||
to state boundaries
|All of India|
|Legal right over the property||Held by the trustee||Held in the name of the society||Held in the name of the company|
|Registration period (approximately)||15-20 days||20-25 days||30-45 days|
|Stamp duty||Dependent upon the state stamp duty Act a well as the total worth of the property involved in the matter||None||None|
|GET STARTED||KNOW MORE||KNOW MORE|
Frequently Asked Questions
1. What is a Trust in India?
In India, trust is more like an akin to a legal arrangement between the author and the trustee.
2. Is it mandatory for the trust to get the registration done under section 12AB?
Yes, a trust must get the registered under section 12AB of Income Tax Act, 1961 to claim an exemption under section 11.
3. Is trust a separate Legal Entity?
In a strict legal sense, a trust is not a separate legal entity, unlike a company. A trust gets created when the settlor hands over any property to the trustee to be used and employed for the benefit of the beneficiary. This legal arrangement is codified vide a trust deed.
4. What are the Parties of a Trust?
Settlor, Trustee, andBeneficiaries are the three parties of the Trust.
5. What are the different types of Trust?
The Two difference types of Trusts are: Private Trust and Public Trust
6. What is the Difference between Trustee and Trustor?
Trustor is the person who creates the trust, whereas the person who has the responsibility of managing the trust for the beneficiary is known as Trustee.
7. What is the governing law for a Trust?
The Indian Trusts Act, 1882, is a governing law for a Trust in India.
8. What is a Public Trust and what is the purpose behind forming it?
By and large an public trust is made for setting up a school, universities, other instructive activities, clinic, mature age homes, halfway house, for advancement of kid wellbeing and their strengthening, government assistance of more fragile segment of society, and for satisfaction of Corporate Social Responsibilities (CSR) by organizations.
9. What are the Documents Required During Trust Registration process?
– Proof of Identity for Trustor & Trustee
– Address Proof of Registered Office
– NOC from the Landlord is required
– Particulars of the Trustee and settlor
– Trust Deed on Proper Stamp Value.
– Photographs & PAN of Trustee and settlor.
10. What about Amendment in Private trust Deed?
It is extremely difficult to amend a trust deed since a trust by its inherent nature is irrevocable. Therefore, it is important to provide the amendment clauses in the trust deed itself. However, if the amendment clauses provided in the trust deed are too wide, then the trust may not be treated as irrevocable.
11. Can a Trust be dissolved after Trust Registration in India?
Yes, Under Section 77 of the Indian Trust Act, 1882, a Trust can be terminated or extinguished if the purpose of the registered Trust becomes unlawful.
12. What is the difference between a Trust and Corporation?
Trusts are usually set up for personal purposes or private purposes, whereas, on the other hand, the Corporations are set up for business and profit purposes.
13. What are the duties of a Trustee?
The key duties of a Trustee are Fiduciary Duty; Duty of Care; Duty of Intimating the Beneficiary of any Form of Changes made in the Trust; and the Duty to Administer the Trust Property.
14. What is the penalty imposed on the Beneficiary for Breach of Trust?
Both civil and criminal penalties may be imposed on the Beneficiary for Breach of Trust.
15. Are NGOs the same as the Trust?
Yes, the working and operations of an NGO and Trust are the same.
16. How much time does it take for Trust Registration?
ComplianceIndia can get your Trust Registration in 10-15 working days. The time taken for registration will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy registration, please ensure you have all the required documents prior to starting the registration process.