According to the Indian Trust Act of 1982, a trust embodies a legal arrangement in which the proprietor transfers their assets to a second party, known as the trustee. The primary intention behind this transfer is to facilitate the benefit of these assets to a third party. However, this transfer cannot be executed without adhering to the established legal procedures.In this article, we shall present a comprehensive outline of the necessary documents required for trust registration in India.
It’s important to underline that a public charitable trust, when situated in Gujarat or Maharashtra, is mandated to be registered under the Bombay Public Charitable Trusts Act of 1950. For regions beyond these states, registration can be pursued through the formulation of a trust deed.
Conversely, a private trust, wherein the beneficiaries typically consist of friends and relatives, does not qualify for tax exemptions. In scenarios where an individual intends to employ their assets or earnings for charitable objectives while retaining a degree of control over the distribution of income to identifiable individuals, the establishment of a public charitable trust emerges as the most suitable course of action.
Creation of Trust and its Types
Before delving into the documents required for trust registration in India, one must understand the basic essentials of a trust and its different types. The creation of a trust is dependent on three distinct types of individuals:
1. The Trustor: This individual declares the confidence and initiates the trust.
2. The Trustee: The trustee is the party who accepts the responsibility of managing the trust.
3. The Beneficiary: This is the individual who receives benefits from the trust arrangement.
Classification of Trusts
Trusts are categorised into distinct types based on their nature and beneficiaries. These categories include:
1. Public Trust
A public trust is established for the welfare of the general public rather than catering to the interests of specific individuals. This category further divides into two subtypes:
– Public Charitable Trust: A trust formed to promote charitable activities for the public’s benefit.
– Public Religious Trust: A trust created to manage religious activities and serve the public’s spiritual needs.
2. Private Trust
In contrast to public trusts, private trusts are designed to benefit specific families or individuals. This category is divided into two subtypes:
– Private Trusts with Resolvable Heirs: Trusts where both the beneficiaries and significant terms can be determined.
– Private Trusts with Unresolvable Heirs: Trusts where either the beneficiaries or crucial terms cannot be determined.
What are the Documents Required for Trust Registration in India?
When registering a trust in India, there are several essential documents required for trust registration in India. These documents ensure the legality and authenticity of the trust establishment. The required documents include:
1. Identification Proof: Self-attested copies of identification documents such as Passport, Driving Licence, Voter ID, and Aadhaar Card of both trustors and trustees.
2. Copy of Utility Bills: Documents indicating utility bill payments as a proof of address.
3. Trust Deed on Stamp Paper: A trust deed created on a Stamp Paper. A Stamp Paper is a legal document with a pre-printed revenue stamp, commonly used for executing legal agreements such as power of attorney, sale deeds, mortgages, and critical agreements.
4. Copy of Property Registration: Documentation related to property registration, if applicable.
5. No Objection Certificate (NOC): If the trust involves a rented property, a NOC from the property owner is necessary.
It is imperative to ensure all documents required for trust registration in India are accurate and complete to facilitate a smooth and successful registration.
Required Documentation for Trust Deed Registration under Indian Trusts Act, 1882
Another important component of documents required for trust registration in India is the process of registering a trust deed under the Indian Trusts Act, 1882. This involves several essential documents that establish the legal framework and authenticity of the trust. The required documentation includes:
1. Schedule (Registration Application with Court Fee): The registration application, duly attested, accompanied by a court fee of INR 100.
2. Trust Deed on Stamp Paper: A trust deed of appropriate value, prepared on a stamp paper as per legal requirements.
3. Declaration by Trustees with Signatures: A declaration made by all the trustees, along with their signatures, verifying their agreement and involvement.
4. Letter of Consent by Settlor with Court Fee: A letter of consent from the settlor, endorsed with a court fee of INR 10.
5. Identification Proof and Photographs: Identification proof of all the settlors and witnesses, along with passport-size photographs.
6. Proof of Address: A recent gas, electricity, or water bill as proof of the registered address of the trust.
7. No Objection Certificate (NOC): If the trust involves property, a NOC from the property owner (trustor) is necessary.
8. Settlor’s Signatures: The settlor’s signatures on every page of the trust deed, ensuring the authenticity and acknowledgment of the document.
Together, the documents required for trust registration in India form a comprehensive set of evidence for the proper registration of a trust deed under the Indian Trusts Act, 1882. Ensuring the accuracy and completeness of these documents is crucial to facilitate a successful and legally valid registration process.
Details Enclosed in the Trust Deed
A trust deed being one of the significant documents required for trust registration in India, encompasses a range of crucial details that establish the foundation and framework of the trust. These include:
1. Trust’s Motive: The primary purpose and objectives of the trust, outlining its intended activities and goals.
2. Basic Details of Trustee and Settler:
– Name
– Occupational background
– Designation
– Age
– Contact information
3. Total Number of Trustees: The count of individuals who will serve as trustees for the trust.
4. Address of the Trust’s Registered Office: The official address where the trust is registered and its operations are conducted.
5. Proposed Name of the Trust: The intended name by which the trust will be recognised.
6. Identification Proof of Trustee and Settler: Copies of identification documents establishing the identity of both trustees and settlers.
7. Passport Size Photographs: Passport-size photographs of both trustees and settlers, providing visual identification.
These comprehensive details enclosed within the trust deed serve as the backbone of the trust’s legal structure, reflecting its purpose, participants, and operational parameters. Ensuring the accuracy and completeness of these details is vital for the trust’s proper establishment and functioning.
Final Thoughts
The documents required for trust registration in India involves careful scrutiny and adherence to legal frameworks. The Indian Trusts Act of 1882 governs the process, necessitating detailed records like identification proofs, consent letters, and trust deeds. Public and private trusts have distinct roles, serving either the general public or specific individuals. Every aspect, from trustee details to trust motives, is crucial for creating a transparent and lawful structure. Recognising these essentials ensures effective trust establishment and operation, promoting the trust’s objectives under a regulated legal framework.
For more information on documents required for trust registration in India, connect with our experts at StartupFino.
