Posted on by Nikhilesh Mallick

TRUST REGISTRATION IN BHOPAL

Trust is an organization where the originator of the Trust gives the property to the trustee to offer the benefit to a third party. The Indian Trust Act, 1882, is the regulating act for a trust, i.e., all trusts under The Indian Trust Act, 1882, are required to undergo registration. Now, the registration of a trust is a fully online process which can be done by signing a Trust Deed. A Trust Deed is the principal requirement under trust registration.

TRUST: WHAT IT ACTUALLY IS

A trust can be defined as an arrangement where the owner (owner or trust) transfers the property to a trustee. Such transfer of property is for the benefit of a third party. The trust transfers property to the trustee, or the trust accompanies a declaration that the property is to be held by the trustee for the benefit of the beneficiaries of the trust. The Indian Trust Act, 1882, lays down the provisions relating to trusts in India. Trust registration is recommended for such benefits in the country of India.

REGISTRATION OF TRUST: ADVANTAGES

The advantages of registering a trust are as follows:

  • To Involve In Charitable Activities
  • Registered Trust Avails Tax Exemptions
  • Provides benefits To unprivileged People
  • Compliance With Law
  • Preservation Of Family Wealth
  • Avoid Court
  • Immigration/Emigration Of Family
  • Forced Heirship
  • Tax Mitigation
  • Managing Assets

REGISTRATION OF TRUST: PARTIES INVOLVED

The parties involved in the Trust registration process are as follows:

  • Trustor
  • Trustee
  • Beneficiary

TYPES OF TRUST IN INDIA

Private Trust: A private trust is one which is constituted for the benefit of one or more individuals who are, or at a specified date may be, definitely ascertained. In other words, private trusts are created for the benefit of individuals and not for the public. Private Trusts are regulated under the Indian Trusts Act, 1882, and may be created inter vivos (while alive) or by will.

  • Public Trust: A public trust is one which is created for the benefit of the general public. Under public trusts, the key provisions are as follows:
    • Public trusts are essentially bifurcated into charitable or religious trusts and are governed under the general law.
    • The Indian Trusts Act governs the provisions of private trusts, which do not apply in the case of public trusts.
  • Similar to private trusts, public trusts can also be created both during a person’s lifetime or through a will.
    • Some of the acts for enforcement of public trusts in India are the Charitable and Religious Trust Act, 1920; the Religious Endowments Act, 1863; the Charitable Endowments Act, 1890; the Bombay Public Trust Act, 1950; etc.

Public-Cum-Private Trusts: These trusts are those trusts, the income of which may be used for a public purpose and a part of which may be given to a private person or persons.

REGISTRATION PROCESS OF TRUST

What are the Procedures to Register a Trust?

Below is the procedure of Trust Registration in India:

Step 1: Selecting a Suitable Name: The first step of the process of trust registration in India always begins with the selection of a suitable name. Moreover, the name suggested by the applicant should not fall under the restricted list of names for the time being in force, as per the provisions of the Emblems and Names Act, 1950.

Step 2: Determine the Authors and Trustees: To adapt, there is no specification of the number of settlers or authors. But in most cases, only one author of a trust is usually present. Moreover, there is no limitation with respect to the number of trustees of a trust. However, at least two trustees are required to create a trust in India. In addition, a trust generally cannot have the author as the trustee. And the author is required to be a resident of India. Also, know the complete checklist of trust registration in India.

Step 3: Formulate Memorandum of Association and Trust Deed: A Trust Deed is legal evidence of the existence of the Trust. It contains the rules and regulations of the Trust. This document also contains the laws regarding the removal, changes, or addition of the Trustees to the Trust. On the other hand, Memorandum of Association or MOA represents the charter of the Trust. It defines the relationship between the Trust or and the Trustees and also specifies the primary objectives for which such a Trust is formed by the applicants. Such a document of a Trust should contain the addresses, names, and occupations of all the members along with their signatures.

Step 4: Preparation of Trust Deed on a Stamp Paper: As a Trust, the applicant is required to prepare the Trust Deed on a stamp paper. The value of the stamp paper is of a certain percentage of the total value of the property of the Trust. Furthermore, this percentage value of the Trust varies from state to state. In addition to this, the applicant is required to pay a fee of Rs. 1100. Out of this Rs. 1100 amount of Rs. 100 is the Trust Registration fee and other Rs. 1000 are the charges of keeping a certified copy of the Trust Deed with the Sub-Registrar. Once the applicant submits all the required papers, he/she can collect a certified copy of the Trust Deed. Such a copy can be collected within a time period of one week from the office of the Registrar. As a Trust, the applicant is required to prepare the Trust Deed on a stamp paper. The value of the stamp paper is of a certain percentage of the total value of the property of the Trust. Furthermore, this percentage value of the Trust varies from state to state.

Step 5: Submission of Trust Deed to the Registrar

After the receipt of the copy of the Trust Deed, the applicant is required to submit the same along with properly attested photocopies of all the necessary documents with the office of the local registrar.

Furthermore, the settler should put his/her signatures on every page of the photocopy of the Trust Deed. Also, it is mandatory for all the settlers as well as the two other witnesses to be physically present along with the identity proofs (original as well as the self-attested photocopy of the same) at the time of Trust Registration in India. However, the physical presence of Trustees of the Trust is debatable.

Step 6: Obtain the Certificate of Registration

After the submission of the Trust Deed with the Registrar, the registrar will retain the photocopy of the Deed and return the original registered copy of the Trust Deed. After the completion of all the formalities, a Certificate of Registration will be issued to the applicant. Such a Certificate of Registration will be issued within a minimum of seven working days

DOCUMENTS REQUIRED FOR TRUST REGISTRATION IN BHOPAL

The documents needed for registering a trust are mentioned below:

  • Proof of Identity for Trustor & Trustee-Aadhaar Card, Voter ID, Passport, Driving License
  • Address Proof of Registered Office- Copy of Certificate of Property/Utility Bills (Telephone, Water, Electricity Bill)
  • In the case of rented property, No Objection Certificate from the owner is needed.
  • Objective of the Trust Deed.
  • Particulars of the Trustee and settlor (Self-attested copy Id and Address Proof along with the data associated with occupation).
  • Trust Deed on correct Stamp Value.
  • Photographs of Trustee and settlor.
  • PAN Card of Trustee and settlor.