Trusts are commonly classified as private/family and public trusts. The main different between the two are that while the beneficiary of a private trust is one or a few individuals mostly family members of the donor, the beneficiary of a public trust is the general public. For the purpose of forming a trust ensuring public benefit a public trust can be formed.
A "trust" is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. The provisions of the Indian Trust Act, 1882 governs only private trusts in India. Any two or more persons (trustees) are required to register a trust. Application along with trust deed for registration to be submitted to the Registrar/ Sub-Registrar in the region where the trust is sought to be registered. The trust is governed by the Board of Trustees with the monitor of Managing Trustee and the new trustees are appointed/ selected either by Managing Trustee or Board of Trustees.
A trust can be created for any lawful purpose and objectives. The purpose of a trust is treated as lawful unless it is (a) forbidden by law, or (b) is of such a nature that, if permitted, it would defeat the provisions of any law, or (c) is fraudulent, or (d) involves or implies injury to the person or property of another, or (e) the Court regards it as immoral or opposed to public policy. Where a trust is created for two purposes, of which one is lawful and the other unlawful, and the two purposes cannot be separated, the whole trust is void.
A trust can be created by every person competent to contracts, and in case of minor with the permission of a principal Civil Court of original jurisdiction, by or on behalf of a minor. In the Trust, the person who reposes or declares the confidence is called the "author of the trust". The person who accepts the confidence is called the trustee. The person for whose benefit the confidence is accepted is called the "beneficiary". The subject-matter of the trust is called "trust-property" or "trust-money".
The philanthropist and service mindset persons who wish to do something to the society can form a trust of his own and administer as managing trust in the trust till his life time.
The Trust can also be termed as Non-governmental organization (NGO), social service non-profit organization which renders a non-profit service to the society. Registration under trust act is useful if author is donating any property to serving the society. If there is no property involve then society act will be best for the NGO.
Objects of Trust:
The trust should have a lawful objectives which should consists of social service orientation and the purpose of not for any profit such as charitable, educational, religious, social welfare, rural development etc. In addition to the said activities, promotion of science, literature, arts, diffusion of useful knowledge, child welfare, old age homes for old age persons, physically and mentally handicap persons, health, social justice, disaster management, agriculture developments, Social awareness, betterment of backward and deprived Communities, poverty alleviation and all kind of welfare programs related to employment, animal welfare, conservation and protection of environment, supporting Self Help Groups etc. are the main part of the major activities of NGO.
Essential elements to form a trust:
- The author of the trust
- The office address of the trust
- The trustees and their rights, power, duties and liabilities
- The objects of the trust
- The beneficiaries
- The trust - property or the subject matter of the trust
- The administration clauses
The document by which the trust is declared is called the “Trust Deed” which should reveal the procedure and bye-laws for how to manage the trust.
Advantage of registering:
By virtue of being a registered body, it can get legal entity and legal status and can acquire and hold property in its own name.
It can initiate and contest a suit in its name against the third party and vice-versa. If it is a social service and charitable purpose trust, it can claim benefits ie., tax exemption under sec.12AB and 80G of Income Tax Act from the government.
It can be registered with NGO Darpan maintained by NITI Aayog under government of India for securing to pursue social welfare projects under various government departments.
It can generate funds from philanthropist in abroad by registering the trust under Foreign Contribution Regulation Act(FCRA).
Tamil Nadu social sector has been performing its role to improve the life standards and socio- economic conditions of society, social welfare matters, charitable Purposes and supports downtrodden peoples.
Registration Boss is owned by highly experienced advocates expertise in the field of forming and guiding trust/NGO. We have vast experiences in drafting all the aspects of trust deed for various objectives of the trust. We are providing our clients a complete guide to form and register for their non-profit organization and further follow up for active running in order to get the exemption under Income Tax Act and FCR Act. We are successfully helping our clients to register all purpose Trust (Charitable Trust, Educational Trust, Religious Trust, Public / Private Trust , Social Welfare Trust, Rural Development Trust etc. ). We have a lot of satisfied clients regarding incumbent in trust activities in Marthandam, Thucklay, Nagercoil and other places of Tamil Nadu. For any assistance required to prepare and register a Trust Deed, you may contact to our Registration Boss…
