Registration Process of Public Charitable Trust/NGO

  • November 5, 2018 30 New Delhi, Delhi, India

The Indian Trust act defines creating a Trust as “A trust is created
when the author of the trust indicates with reasonable certainty by any
words or acts:

(a) an intention on his part to create thereby a trust,
(b) the purpose of the trust,
(c) the beneficiary, and
(d)
the trust-property, and (unless the trust is declared by will or the
author of the trust is himself to be the trustee) transferred the
trust-property to the trustee”.

A Public Charitable Trust has to be registered with the office of the Charity Commissioner who has jurisdiction over the trust.

To register your trust you need to follow the steps described below:

Step
1 : Choose an appropriate name for your Trust. This is the basic step
in registering your Trust. While choosing name take care that the
proposed name should not suggest any kind of patronage by the government
of India or any State government.

Step
2 : Determine the Settler/ Author and Trustees of the intended Trust.
In case of the number of Settlers/ Authors there is no clearly defined
rule.

Step 3 : Prepare a Memorandum of Association and Rules &
Regulations of your Trust. This is known as Trust deed and is extremely
essential as the legal evidence of your Trust’s existence.

The Trust Deed contains various Clauses. These are:

1.Name Clause
2.Settler and Trustee Clause
3.Registered Office Clause
4.Object Clause and Beneficiaries
5.General Body Member Clause

A
table containing names, address and occupation of all the Members along
with their signatures should be formulated under the memorandum of
association.

Rules and Regulations section includes the following Clauses:

1.Membership Clause
2.Subscription Clause
3.Meeting Clause
4.Committee/ Governing Body Clause
5.Auditor

6.Legal Procedures like appointment, removal or replacement of a trustee, their rights, duties and powers, etc.

7.Property that shall devolve upon the trustee(s) under the trust for the benefit of the beneficiaries

Note: The intention must be expressed in clear, simple language and with certainty.

Bylaws of the Trust

Mention
each and every rule applicable to the Trust point wise. This includes
sections of Income Tax act applicable.

Step 4: Prepare all the
documents that will be required at the time of submission. There is a
Trust deed that is required.

A. The elements of that Trust deed which should be present in it are:

1.Name and address of the Settler/ Author of the Trust.

2.Names and addresses of the other trustees.

3.Name of the trust.

4.Minimum
and maximum number of trustees. Minimum number is two while there is no
limit for Maximum. But you must determine the maximum number your Trust
can have.

5.Address of the registered office of the trust.

6.Purpose behind formation of the Trust.

7.Objectives of the trust.

8.Rules and Regulations of the trust.

9.Information about the intended Bank account: which bank and branch you shall open a bank account with.

10.Tenure
of the Trustees must be specified in the deed. It is not necessary to
involve Electoral process in the appointment of trustees.

11.Board of Trustees can also have various designations for trustees like Chairperson and Managing Trustee.

12.Determine these posts and the responsibilities of each of these in the Trust deed.

13.Though
Trustees cannot draw any remuneration from the trust fund but they are
eligible to receive compensation for the professional services they
provide to the Trust.

14.Determine this in the Trust deed.

15.Date of execution of the Trust Deed.

B.
The Trust Deed shall be prepared on a stamp paper whose value should be
of certain percentage of the total value of Trust’s property.

C. To register the Trust Deed with the Local Registrar under the Indian Trusts Act there are certain requirements. These are:

Trust Deed on stamp paper of requisite value (as stated above)

Two passport size photograph & self attested copy of the proof of identity of the settler

Two passport size photograph & self attested copy of the proof of identity of each trustee

Signature of settler on all the pages of the Trust Deed.

One passport size
photograph (varies from state to state. Some require photo some don’t)
& copy of the proof of identity of each of the two witnesses is
needed.

Step
5: Submit the Trust Deed, along with properly attested photocopies with
the local registrar. Photocopy of the Trust Deed must be signed by the
settler on every page.

Step 6: The Registrar will retain the photocopy & return the original registered copy of the Trust Deed.

Step
7: After submitting all the required documents and completing all
formalities it takes a minimum of 7 working days to obtain registration
certificate.

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