What is a trust deed ?

  • November 5, 2018 18 New Delhi, Delhi, India

The following can form a trust under Sec.7 of the Indian Trusts Act 1882: A person capable of making contract can form a trust;

Trust can be formed on behalf of minor with permission of Civil Court.

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 :

(A) 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.

(B) 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 for:

1. For the benefit and welfare of members of a family

2. For the management & preservation of a property

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