Trusts, established with the noble intent to promote advancements in sciences, literature, and other beneficial causes, play a pivotal role in addressing societal needs such as alleviating poverty, providing education to the underprivileged, and offering medical support. The process of Trust Registration is a formal procedure that involves registering a trust under the Trusts Act of 1882. This essential legal step ensures the trust's recognition, compliance with regulatory standards, and grants it legal validity, thereby establishing its identity as an independent entity.
For those aiming to create a trust with non-profit or charitable objectives, trust registration is crucial for ensuring smooth operations and adherence to legal requirements. At Wealth4India, our team of experienced professionals is dedicated to guiding you through every step of the trust registration process, ensuring a streamlined and efficient experience. Contact us today to discuss your trust registration needs and benefit from our expertise in forming legally compliant and effective trusts.
There are three main parties involved in the trust registration process:
Trustor (Settlor/Grantor/Donor)
The person who creates the trust and transfers assets or property to it. They outline their wishes for the trust's management and the beneficiary in a legal document called the trust deed.
Trustee
The individual or entity entrusted with holding and managing the trust's assets according to the trust deed. They have a legal obligation to act in the best interests of the beneficiary.
Beneficiary
The person or entity who ultimately benefits from the trust's assets. The trust deed specifies when and how the beneficiary receives the benefits.
Registering a trust offers numerous advantages to individuals and organizations, providing a solid foundation for charitable and non-profit activities. Here are the key benefits:
By registering a trust, individuals and organizations can secure these benefits, ensuring financial advantages, legal security, and efficient asset management, all while contributing positively to society.
The procedure to register a trust involves several detailed steps, as outlined below:
Name of the Trust
The parties forming the trust must choose an appropriate name that complies with the provisions of relevant acts such as the Trademarks Act, Copyright Act, Intellectual Property Rights Act, and Emblems and Names Act, 1950.
Settlers of the Trust
Identify the individuals who will act as settlers of the trust. A minimum of two trustees is required, and while there is no upper limit on the number of trustees, the author of the trust cannot be a trustee. All trustees must be residents of India.
Prepare a Memorandum of Association (MOA) for the Trust
Draft a Memorandum of Association that outlines the objectives and purpose for which the trust is being formed. Ensure that the stated goals are legally permissible.
Draft the Trust Deed
Create a trust deed, a legally binding document that establishes the trust. The trust deed must be presented to the registrar during the registration process and should include all terms and conditions agreed upon by the author, trustees, and beneficiaries.
Submit the Deed to the Registrar
Once the trust deed is drafted, submit it along with other required documents to the registrar. The author, trustees, and beneficiaries must be involved in this process.
Obtain Trust Registration Certificate
After reviewing the submitted documents, if the registrar is satisfied with their validity and compliance, the trust will be registered. The registrar will issue a trust registration certificate, which should be kept by the trustees and the trustor. Once the trust is registered, a bank account can be opened in the trust’s name.