In India, Non profit organizations can register as a section 8 company, a society or a trust.
Trust are organizations that work for large companies to undertake public welfare activities. In simple terms, they make a social contribution that takes various forms. It can be education, medical assistance or food and aid distribution.
Because of its nature and the perks, many consider a trust to be the best form of Non-Profit organization. Therefore, in this article, we will intimate you with the procedure obtain Trust Registration in India.
What is a trust?
Indian trust Act 1932 defined a trust as an arrange where a trustor transfers the property to a trustee for the benefit of a third person.
As per the agreement signed between the trustor and the trustee, the trustee must use the transferred property to aid the beneficiaries.
Based on the nature of those beneficiaries, a trust has two categories:
It is a form of a trust whose beneficiaries consists of public. A public trust can be further divided into Public Religious and Public Charitable trust.
The beneficiaries of a private trust consists of families and individuals. One can divide a private trust in the following categories:
Non Determined private trusts are those for which one can’t determine either the beneficiaries or the requisite shares
Determined private trusts are refer to transparent trust that free provide the information pertaining to the beneficiaries and shares.
80G and 12A Certificate for Trusts
Much akin to a Section 7 Company or a cooperative society, a trust too can obtain 12 A and 80 G Registrations
The 12A Registration obtained from the Income Tax department exempts the trust from paying income tax on any surplus income it generates.
A 80G Registration allows the donors to reduce their taxes as per section 80G of the income tax act. Simply put, an 80G registration allows an NGO to attract donors.
Trust Registration procedure in India
Following is the process to establish a public charitable trust in India
Choosing the name for the trust you want to establish
The first step of registration is choosing the right name. It should encompass the nature of work that the trust does and must not come under the list of restricted names as per the Emblems and Names Act, 1950.
Choosing the trustees
After choosing the name, you must select the trustees. While we can’t give you a definite answer about who you must choose. You must base your selection criteria on the basis of integrity, altruism and honesty. Read More: NBFC License
As there is no limit to how many trustees you can incorporate, you need to be extra careful.
Draft the MOA and trust deed
Now, you need to draft the Memorandum of Association and trust deed of your proposed trust. The MOA will contain your trust’s objectives and the Trust deed will contain its rules and regulations.
Furnish the following documents
Furnish the documents given below:
- Trust deed
- Self Attested copy of your ID proof
- Copy (Self Attested) of ID of all the trustees you’ve decided to integrate in your trust
- PAN Card
- Proof of the registered office of the trust
- NOC from the landowner in case the registered office is in a rented space.
Submit the application of trust registration
Finally, you must submit the application of trust registration to the Trust Registrar. He will assess your application and if it finds them to be satisfactory, will issue you a Trust Registration certificate. Read More: Demonstration License
Here is the process to obtain Trust Registration in India. Read it to know all the points to keep in mind to establish a public trust to help the people of India.