In India, anyone with the legal capacity to enter into a contract can establish a public charitable trust. The objectives of trust registration typically encompass lessening poverty, promoting education, providing medical relief, advancing objects of general public utility, and more. Public trusts can be either registered or unregistered. In this blog, we shall focus on the process involved in registration of charitable trust.
Establishing a Public Charitable Trust
In the process of creating a public charitable trust, certain essential elements must be considered, with specific attention to the following basics:
1. Clear Intent of the Settlor
The foundation of a public charitable trust requires a settlor who possesses a clear intention to establish the trust. This serves as the fundamental basis for the trust’s existence.
2. Purpose of the Trust
A crucial aspect in the creation of a trust is a detailed articulation of the purpose for which the trust is being established. Clarity in the objectives helps guide the trust’s activities and ensures compliance with its intended mission.
3. Trust Property Details
Another essential requirement is the explicit identification and documentation of the trust property. Clearly outlining the assets or resources held by the trust provides a transparent understanding of the trust’s financial and material scope.
4. Identification of Beneficiaries
A well-defined list of beneficiaries is essential to the trust’s formation. This includes specifying the individuals or entities that stand to benefit from the trust’s activities, thereby establishing the intended impact of the charitable efforts.
5. Divestment of Ownership by the Settlor
A critical step in trust creation involves the settlor relinquishing ownership rights in favour of the trust’s beneficiaries. This transfer of ownership ensures that the assets are dedicated to the trust’s objectives and are no longer under the direct control of the settlor.
By adhering to these necessary components, the establishment of a public charitable trust can be approached systematically, ensuring clarity, legality, and adherence to the intended philanthropic goals.
Procedure for Registration of Charitable Trust
The registration of charitable trust involves a systematic registration process. The following steps outline the procedure for registration of charitable trust in India:
1. Jurisdiction and Responsible Authority
The initial step in registration of charitable trust is to identify the official with jurisdiction over trust registration in the respective state. For example, in Maharashtra, the Charity Commissioner oversees trust registration.
2. Submission of Application
In the next step of registration of charitable trust, prepare and submit an application for trust registration to the designated official. The application should include essential details such as the trust name, names of trustees, mode of succession, and other pertinent information.
3. Inclusion of Court Fee Stamp and Registration Fee
Ensure the application includes a court fee stamp of Rs.2 and a nominal trust registration fee. The registration fee may vary based on factors such as the trust property and the state of registration.
4. Submission of Trust Deed
Attach a certified copy of the trust deed along with the application. The trust deed serves as a crucial document outlining the objectives, structure, and rules governing the charitable trust.
5. Verification and Approval
The trust registration form for registration of charitable trust must be signed by the applicant in the presence of the Regional Officer, Superintendent of the Regional Office of the Charity Commissioner, or a Notary. This step ensures the authenticity of the application and its compliance with legal requirements.
By following this process for registration of charitable trust, individuals and organisations can deal with the trust registration process effectively, ensuring legal recognition and the ability to carry out philanthropic activities in accordance with the trust’s objectives.
Required Documents for Trust Registration
The process of registering a trust involves the submission of specific documents. To initiate and complete the trust registration, the following documents are essential:
1. Covering Letter
Include a covering letter addressed to the official having jurisdiction, expressing the intent and purpose of trust registration.
2. Application Form (Form – Schedule II)
Duly notarised application form, available for download as the “Application for Trust Registration” This form captures essential details related to the trust and its formation.
3. Court Fee Stamp
Affix a court fee stamp of Rs.2 to the application form, as required by the registration process.
4. Certified Copy of Trust Deed
Provide a certified copy of the trust deed, a foundational document outlining the trust’s objectives, rules, and structure.
5. Consent Letter of Trustees
Include a consent letter from all the trustees, indicating their agreement to serve in the specified roles within the trust.
Registration Process in Brief
Upon submission of the application and necessary documents, the Commissioner’s office undertakes the following steps:
1. Data Entry: Enter the trust’s details into the Commissioner’s registry, including the trust name, registration number, address, names of trustees, trust objectives, and property details.
2. Record Keeping: Provide a copy of the entry made into the registry to the trust or trustee for their records. This document serves as official confirmation of the trust’s registration.
By ensuring the submission of these requisite documents, individuals or organisations can facilitate a smooth and legally compliant registration process for their charitable trust.
Final Thoughts
The registration of charitable trust is a careful process that involves submitting a set of crucial documents to the relevant authorities. The foundational documents, including the trust deed and consent letters of trustees, play a pivotal role in outlining the trust’s objectives and structure. The completion of an application form, notarised and accompanied by a court fee stamp, is a prerequisite for initiating the registration process. Once submitted, the Commissioner’s office enters essential details into their registry, providing the trust with an official registration number and confirming compliance with legal requirements. This official confirmation, supplied to the trust for record-keeping, marks the culmination of the registration process. A properly registered charitable trust is thereby empowered to pursue its philanthropic mission in accordance with the established guidelines and legal framework.
