As per the Indian Trust Act, charitable trust registration is done when the author of the trust indicates with reasonable certainty by words or act-
- An intention to create a trust
- Purpose for charitable trust registration
- Beneficiary of trust
- Trust-property
A public charitable trust registration in India completes when it is registered with the office of the charity commissioner who has jurisdiction over the trust.
Procedure for charitable trust registration in India–
Step 1: Choose an appropriate name of the trust. Name of a trust should not suggest any kind of patronage by government of India or any state government.
Step 2: After selection of a name, determine the settler and trustees of the trust. Minimum of two trustees are required for charitable trust registration and they must be resident of India.
Step 3: After determination of trustees, Memorandum of Association and rules and regulations of trust are prepared, which are known as ‘trust deed’. Trust deed is the most essential legal evidence for trust registration in India and is a proof trust’s existence. Trust deed format contains various clauses.
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Trust deed format for charitable trust registration includes-
1. Declaration– This includes execution date of trust, details of founders of trust with their acceptance and the sum for which the trust is settled, which is called Corpus fund.
2. Name- This section contains the name of the trust.
3. Address- This contains the registered place for office of the trust registration in India as decided by trustees.
4. Trustees- This section includes the names of first trustees of the trust, chairman and managing trustee, board of trustees and their successors.
5. Objects- Object clause contains the main purpose for the trust registration in India. Main object of the trust should be for public at large.
6. Constitution of board of trustees- board of trustees should be constituted for passing any resolution and taking decisions regarding trust. Every board meeting shall be presided by chairman.
7. Power of board of Trustees- After the board of trustees is made, powers of trustees should be mentioned in this clause. Power of trustees shall include, receipt of donation for corpus and investment of such funds for various purposes according to objects of trust.
8. Functions- This section includes all the functions of the trustees. These functions are related to managing the trust, administration and any other functions like borrowing of funds against security, entering into agreement or contract, appointment of trustees as secretary etc.
9. Other incidental powers-This part of trust deed format includes incidental powers regarding carryover of incidental income according to income tax laws in India and selling of movable as well as immovable property through public auctions.
10. Duration of trust- In this clause duration for which trust is created is mentioned. Public charitable trust are generally perpetual and trust remains irrevocable.
11. Amendment of the Trust- This clause will limit amendment of the objects of the trust or any other terms.
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12. No benefit to settlor, trustees and others- In a trust deed format it is very crucial to include that there will be no personal benefits to the settlor, trustee or others and they are not entitled to any remuneration.
13. Indemnity to trustees- This clause will specify that trusty would not be liable for any bona fide act done by trustee for trust to fulfil his duty.
14. Suits and processes- This list contains the names of persons who can sue and can be sued by trust’s name.
15. Meetings-This clause shall contain all the information regarding meetings including number of meetings, notice of meeting, voting, quorum etc.
16. Accounts- trust deed format provides that accounts of the trust shall be properly kept and shall close on 31st of March every year. It should also get audited by a qualified chartered accountant within 6 months.
17. Record- This clause specifies that all the records regarding investments, assets, funds etc. to be kept.
18. Saving clause- If any object or provision of the trust deed are not consistent with the requirements of law, such provisions shall be modified as per the law.
19. Resolving disputes- This clause is reserved for situations arising regarding interpretation of deed or its duties and functions.
20. Dissolution-This sections of trust deed includes that settlor or trustees will not have any right over funds and property of the trust in case of dissolution of the trust.
21. Witnesses- It is specifically mentioned in trust deed format that the details of witnesses of the registration of the trust shall be mentioned in trust deed.
Step 4: Preparation of all the documents required at the time of trust registration in Indiaincluding trust deed prepared as per given trust deed format.
Step 5: Submission of trust deed with attested photocopies to local registrar. Settlor shall sign the each page of trust deed photocopy. Charitable Trust registration will complete when settler and 2 witnesses are present during registration.
Step 6: Registrar will return the original trust deed and keep the photocopy with him.
Step 7: After all the formalities are completed and all the necessary documents are submitted, registration certificate for trust will be received in 7 working days which will be the evidence of trust registration in India.