Trust Registration (Delhi & Punjab)

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Trust Registration (Delhi & Punjab)

What is a Trust ?

A trust is a convenient method whereby a limited number of persons may hold property on behalf of other persons, who may be a large or fluctuating body or who may include persons not yet born. Once the property has been vested in the trustees, they own the property, but they are compelled by law to exercise their ownership for the benefits of the beneficiaries and for them only. It means that legal ownership vests in the trustee or trustees but beneficiaries have de facto ownership.

REQUISITES FOR CREATION OF A TRUST

  1. There is a founder/settler/author of trust.
  2. There should be person(s) called trustee/trustees.
  3. There is a property of the trust which the settler gives.
  4. There is a person capable to enforce that obligation called cestuique trust.
  5. There are beneficiaries who will enjoy benefits out of that property.
  6. An intention of the author or founder to create a trust.
  7. The purpose of the trust.
  8. Transfer of the property to the trustees.

CONDITIONS FOR CREATION OF A TRUST

  1. The settler has to give up ownership and all beneficial interests in the property,
  2. The property should be clearly described.
  3. The objects or purposes for creation of trust should be clearly indicated.
  4. Formal deed or any other writing not required intention to create a trust may be shown through words. However, it is advisable to have a written trust deed for all practical purposes.
  5. The settler must be a person competent to contract.
  6. the trust property must be properly transferable to the beneficiary. It must not be a merely beneficial interest.

How to register a Trust / NGO ?

The steps involved in the Registration of a Trust Deed are as follows:

  1. The Trust Deed is drafted / prepared by a legal expert.
  2. e-Stamp Paper is purchased for the execution.
  3. Date is fixed for the registration in the Sub Registrar office.
  4. The Government registration fee is paid.
  5. All the trustees and 2 witnesses visit the sub registrar office on the fixed day for the registration of Trust Deed.
  6. The Registered Trust Deed is collected after a week. To get a Trust or Non Government Organisation (NGO) registered in Delhi,

What is a trust deed ?

It is an essential instrument of a trust, wherein the aims and objects and modes of management (of the trust) have to be described and mentioned. A trust deed is a must when there is property involved, especially in terms of land and building so as to provide a prima facie evidence of the existence of the trust. In all the trust deeds the maximum and minimum number of trustees should be specifically mentioned. The trust deed should clearly spell out the aims and objects of the trust. Each and every aspect in relation to the management of the trust should be mentioned in the deed. Even the procedures involved in the appointments and removal of other trustees should be mentioned eliminating all the chances of any discrepancy in the future. The trusts registered in a particular state can operate on All India Level and therefore can work in other states as well. In case of change of the trustees or registered address of the trust or change of the aims & objects of the trust, a new deed needs to be prepared and registered in the registrar office.

Purposes for which a trust can be formed

A trust can be of two types :

  1. Public Trust (or Charitable Trust): It is the one which is created mainly for the benefit of the general public at large. The objects could be for public benefit / charitable purposes such as:
    1. For setting up a school/educational institute for providing education to children,
    2. For setting up a hospital/nursing home for providing medical services and facilities for poor,
    3. For taking care of old aged / senior citizens, orphans, handicapped, widows, etc.
    4. For promotion of child health & girl / women empowerment
    5. For Social welfare of weaker sections of society,
    6. For promotion of Spiritual / Yoga / Art, Craft and Cultural activities
    7. For providing training to the Backward and poor classes to make them employable
    8. For religious activities such as setting up a temple etc.
    9. For protection of environment, planting trees, reducing pollution etc.
    10. For providing drinking water, food, shelter, clothing to the socially backward and poor.
    11. For fulfillment of Corporate Social Responsibility (CSR) by companies under Section 135 of the Indian Companies Act, 2013.
    12. For protection of environment, planting trees, reducing pollution etc.
  2. Private Trust
    It is the one which is formed mainly for the benefit and welfare of particular persons/members of a family. A private trust can be made
    1. For the benefit and welfare of members of a family
    2. For the management & preservation of a property

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Who can be a trustee ?

A trustee can be any person, that is an individual or a corporate body or a corporate sole, capable of holding property and competent to contract. The position of trustee is an extremely important one, as trustees are in fiduciary relationship with the trust beneficiaries. This means that they are in a special position of trust and accordingly have a number of significant duties.

Registration of trust deed

The trust deed should be executed on non-judicial stamp paper, the value of which would depend on the valuation of the trust property. The application for registration should be made to the concerned sub registrar having jurisdiction over the region in which the trust is sought to be registered. it is necessary to get the trust deed registered in case of a charitable or religious trust, in relation to an immovable property for claiming exemption U/s. 11 of the Income Tax Act. For registration of Trust Deed the Settlor or Trustees and at least two witnesses must be physically present at Registrar's Office along with their photographs and Identity Proofs. The trust deed should be signed by the settlor or trustees after mutual consent in the presence of two witnesses.

Essential Contents of a Trust Deed

  1. The name(s) of the author(s)/settlor(s) of the trust.
  2. The name(s) of the trustee(s).
  3. The name(s) if any, of the beneficiary or whether it is for the general public / charitable purpose.
  4. The name by which the trust shall be known.
  5. The place where its trustees, principal and other offices shall be situated.
  6. The property that shall devolve upon the trustee(s) under the trust for the benefit of the beneficiary.
  7. An intention to divest the trust property upon the trustee(s).
  8. The main and incidental objects of the trust.
  9. The procedure for appointment, removal or replacement of a trustee, their rights, powers, duties etc.
  10. The rights and duties of the beneficiaries.
  11. The mode and method of determination of trust.
Trust Registration (Delhi ) 14999

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