We have many types of non-profit and no-governmental organizations in India. There are Trust, Society and Section 8 Company. These organizations work as a charitable organization for the benefits of others.
What is a Trust Organization in India?
As per the Indian trust act 1882, Trust organization gets the recognition. People who wish to work as an NGO and/or non-profit organization to help others, forming a charitable trust company is most preferred to them.
It can work as an apparatus to safeguard the benefits of the recipients, especially if he/she is minor. In most of the cases minors are unable to protect their self-interests.
Components of Trust
There are three components of a Trust Organization.
Settlor or the Author
The person who creates the trust is known as the Settlor or Author of the Trust. The author put a specific resource under the trust. The resource is then transferred to another individual/s who will be the Trustee of the Trust. The Settlor is also responsible for the creation of guidelines regarding the beneficiary rules.
Trustee
The trustee is the individual who gets the resources from the Author or Settlor of the Trust. S/he holds the responsibility to manage and maintain all the resources to benefit the beneficiaries. A Trustee has to follow some legal guidelines to manage the assets of the trust and provide assistance and welfare to all the beneficiaries. The author of the Trust can also be a Trustee.
Beneficiary
The beneficiary is the third person who gets all the benefits from the author provided resources managed by the Trustee. In the ‘Trust Deed’, the names of all the beneficiaries should be included or mentioned. The Author of the Trust can be a beneficiary with other beneficiaries.
Types of Trusts (organization) in India
There are two types of Trust organization that we can find in India.
- Public Trust
Public Trusts are primarily made for the benefit of general public purpose. This is mainly charitable organization that offers benefits in the area of education, science and religious types of activities. Public Trusts are very easy to incorporate and there are not many restrictions for the working procedures of it. It is not governed by any Central Act.
- Private Trust
When a Trust works for the benefit of one of multiple people and not for the masses, it is a Private Trust. It is administered by the 1982 Indian Trust Act. Private trusts are formed for the benefits of individual’s family members, relatives or friends.
How to apply for Trust Registration?
People who wish to incorporate a Trust, needs to fulfill some criteria for the purpose.
Name of the Trust
This is the first step to create any kinds of organization whether a Trust or Private Limited Company. The proposed name of the Trust must not be similar or identical with any other legal corporation.
Determine the Author, Trustee and Beneficiaries
An individual with a minimum 18 years of age can be Settlor/Author of a Trust. S/he also must be a mentally healthy person. There is no limit for the numbers of Authors to create a Trust. Generally anyone can create a Trust with single Settlor. S/he must be a citizen of India.
Trust can be incorporated with at least two trustees. There is no upper limit mentioned for the permitted numbers of trustee.
Anyone can be a beneficiary of the Trust.
Create Trust Deed and Memorandum of Association
The rules and regulations of a Trust must be mentioned in the Trust Deed. It should also contain other details as mentioned below.
· Trust Properties details
· Objective of the Trust
· Trust Beneficiaries details
The charter of the Trust is the memorandum of Association. Here all the details and relations between the Author and Trustee must be mentioned. Also all details of other members of the Trust should be notified in here. Like all other company’s MOA, it also declares the purpose and objectives of Trust.
Requirement of Documents
Self-attested Identity proof of the authors and Trustees (Voter ID, Aadhar Card, PAN Card etc.),
Trust Deed must be prepared on a stamp paper
PAN details of all members,
Trust’s registered office proof (Electricity Bill, Gas connection bill, Telephone/mobile bill etc.), In case, the office is placed in a rented land, then NOC from the owner must be sought.
After all these measurements, people need to submit the Trust deed to the local Registrar office. The author should sign on every pages of the trust deed. There must be two witnesses physically present with their proper ID proof at the time of incorporation procedure.
After the submission, the registrar will take the photocopy of all the documents and return you the genuine copy of the Trust Deed. Within few days, you will get confirmation of your Trust Registration.