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Procedure for forming a Charitable Trust

Courtesy/By: Shruti Singh | 2020-12-26 19:31     Views : 289

The procedure for forming a public Trust is different from that of a private Trust. The regulation of each is separate. General law governs the formation of a public Trust. Whereas the Indian Trusts Act regulates the creation of a private Trust. A public charitable or religious institution can be formed either as a Trust or a Society or a Section 8 Company. It generally constitutes a Trust when it is formed primarily by one or a few persons only. 

The registration process for a Public Charitable Trust

  1. The first step in the registration of a Public Charitable Trust is selecting an appropriate name for the Trust. It should not come under the restricted list of names as per the sections of the Emblems and Names Act, 1950.
  2. The next step is deciding the Authors and Trustees of the Trust. A minimum of two trustees is required for forming a Trust. The Author usually cannot become a Trustee and he/she must be an Indian resident.
  3. Next, one must prepare a Trust Deed, which is legal evidence of the Trust’s existence. One must also formulate a Memorandum of Association, which represents the Trust’s charter and specifies its objectives. 
  4. The essential documents requiring submission at the time of registration process are Trust Deed, Self-attested copy of Identity Proof of Author and Trustee, PAN card, Proof of registered office address of the Trust, Non-objection letter signed by landowner.
  5. One must prepare the Trust Deed on stamp paper. The value of such a stamp varies as per a particular percentage of the Trust property’s total valuation. 
  6. After receipt of a certified copy of the Trust Deed, one should submit it together with properly attested photocopies with the local registrar. The Author must put his signatures on every page of the photocopy of the Trust Deed. It is also necessary that the Authors, along with two witnesses, physically appear along with their identity proof ((original and self-attested photocopy) at the time of registration. 
  7. After completing all the legal formalities, the registrar issues a registration certificate within at least seven working days.

Procedure for forming a Private Charitable Trust     

For creating a private Trust, the foremost requirement is that the Author of the Trust must express with reasonable certainty by words or acts, an intention on his part to create a Trust. Therefore, a Trust may be declared either by words, spoken or written, or through actions. When a Trust is declared by words, the language used must clearly show an intention to form a Trust. An effective declaration of Trust does not require a formal language, provided that the language used must make it clear that the Author of the Trust intended:

  1. Constitution of a Trust binding in law on himself or the person who received the property.
  2. Binding of definite property by the Trust.
  3. A benefit to a specific person or persons in a defined manner.

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.

Courtesy/By: Shruti Singh | 2020-12-26 19:31