Trust Registration Process
In the State of Maharashtra, the legislation governing Public Trust is Bombay Public Trusts Act, 1950. Similar legislation by the same name prevails in the State of Gujarat also. This is because, the Act was passed when Maharashtra and Gujarat were one. Gujarat State after its separation has made certain variations according to their requirements. But more or less both the states have similar provisions. Under the BPT Act, the Charity Commissioner is the guardian of the trusts. The office of the Charity Commissioner has been given the powers of supervision, regulation and control of public trusts. It is compulsory for every public trust to register with the charity Commissioner so as to ensure proper administration and Management.
Sec. 2(13): Public Trust : means an express or constructive Trust for either public or charitable purpose or both and includes a temple, a math, a wakf, church, synagogue, agiary or any other religious or charitable endowment and a society formed either for religious or charitable purpose or both and registered under the Societies Registration.
A trust can either be a private trust or a public charitable trust. Private trusts are governed by the Indian Trusts Act (1882) and are used for private purposes, such as running a private estate or institution. Privates trusts are not given any tax benefits.
If you want to do some charitable work for public –you can set up a public charitable trust. India does not have a national level law to govern charitable trusts. However, some of the states have enacted Public Charitable Trusts Act (Like Bombay Public Trusts Act, 1950)
- Trusts are registered using a document called TRUST DEED. This document contains all the information about the trust and is printed/written/typed on plain papers. With these papers you would need to attach Rs. 100 Non-Judicial stamp paper. All the trustees and witnesses will have to give thumb impressions and signatures on these papers. All in all, you will need help of a notary to prepare the papers.
- You may also need a no-objection certificate from the owner of the property where the registered office of the trust is to be situated
- Following elements must be mentioned in the trust deed
Name and address of the Settler (Settler is the person who is setting up trust)
- Name(s) and address(es) of the other trustees
- Name of the trust
- Minimum and maximum number of trustees your trust can have
- Address of the registered office of the trust
- Objectives of the trust
- Rules and Regulations of the trust
- For registering a trust you need minimum two trustees (i.e. one settler and another person). You can decide maximum number of trustees and it must be mentioned in the trust deed. All the trustees together are called Board of Trustees. This board collectively governs the trust.
- In case of trusts, all or some of the trustees can be related persons (i.e. belonging to the same family)
- All the trusts are allowed to work on all India level
- Trusts are irrevocable –unless it is mentioned in the trust deed. This means that the trust cannot be wound up
- Trustees are usually life-long members or their tenure is specified in the deed. Electoral process is not involved in the appointment of trustees.
- Board of Trustees can also have various designations for trustees. Common designations are Chairperson and Managing Trustee
- Trustees cannot draw any remuneration from the trust fund.
- Profits cannot be distributed among the trustees.
- Trust deed can be amended through a supplementary trust deed.
- Most important part of the trust deed that you should pay attention to is objectives of the trust. You should be as thorough as possible in writing down trust objectives so that you can function smoothly without any problems.
- At the time of registration, only the Settlor and two witnesses are required to be present in front of the Sub-registrar under whose jurisdiction the registered office address comes. Sub-registrar will check IDs of these people. After that the trust deed will go to the counter where data entry takes place. In the end the Settlor and two witnesses will be photographed. You will need to pay 1100 rupees fee. Of this, Rs. 100 will be the registration fee and Rs. 1000 will be the charges of keeping a copy of the trust deed with the sub-registrar. This will end the process.
- After one week of submitting the papers, you can go back to the registrar to receive a certified copy of the trust deed.
3. REGISTRATION OF TRUST
(i) Apply to Asst./Deputy Charity Commissioner of the region in Schedule II (prescribed form) affix court fees stamp of Rs. 100.
(ii) Application to be made within 3 months of creation of the trust.
(iii) Documents to be submitted at the time of registration
(a) covering letter
(b) Schedule II (the signatory to the application to affirm & subscribe before appropriate authority)
(c) trust deed certified copy/memorandum of association and rules & regulations (in case of society)
(d) affidavit in prescribed format.
(e) consent letter signed by the remaining trustees and stating that they hereby allow the applicant trustee to represent on their behalf and complete all registration formalities and obtain the certificate of registration.
(f) prescribed application fees based on value of the property.