Trust formation plays an influential role in pushing sustainable development at an international level. In a country like India, where Governmental aid fails to secure the lives of several, Trust or NGOs are the only key drivers of intergovernmental negotiations. In the present times, where NGOs are assisted by advances in technology, information and communications, the scattered attention is slowly circling towards the socio-economic and environmental disruptions; Meaning, Rural and Social Entrepreneurship are on a significant rise. With these evident changes in the whole NGO ecosystem of India, it is important to register your Trust since this obligatory registration policy would eventually unlock various legal and governmental benefits that can further fasten the entire outcomes. Below mentioned are a few important things you should know about Trust Registration in India:
Before registering your Trust, a collective decision on the below-stated pointers are important for initialization of the registration process:
- Trust Name- Please make sure that the name of the Trust should be in accordance with provisions of Emblems and Names Act, 1950.
- Trust Address
- Objectives of Trust--Charitable or Religious
- One settler of the Trust
- Proposed Two Trustees- There is no restriction on the number of Trustees as it depends upon will, choice and understanding of the other Trustees. The minimum age of a man to register himself as a Trustee is 18, and for a woman, the age limit is 19.
- Valid Citizen ID is required of all the Trustees
- Trust-movable or immovable property
Creation of Trust Deed on a stamp paper on the precondition value. For example, According to Delhi policy, there is a requisite of 8% of the value of Trust property. This would further vary from state to state. Adding to this, the Preparation of Memorandum of Association of Rules and Regulations for the to-be-registered is critically important.
The Trust Deed would consist of the following clauses:
- Trustee and Settler Clause
- Name of Clause
- Beneficiaries and Object Clause
- General Body Member Clause
- Registered Office Clause
Other Important Dials of Trust Deed that should be filled with ultimate discretion:
- Purpose of the Trust being formed
- Rules and Regulations of the Trust
- Bank Account Information intended to be associated with the Trust
- Trust Deed Execution date
- Intended or decided number of meetings to be organized each year. Specified conditions to be followed or implemented for the meetings scheduled.
- Well-defined procedures to be followed in case of any suggested modifications or alteration in any Trust clause that can happen in uncalled times.
- Trust conditions to be followed in case a Trustee discontinues his/her tenure.
- Consent of all members should be written and not verbal so as there are no future clashes on previously declared/decided rules and regulations.
After deciding and enlisting all the above-mentioned pointers with clarity, the next steps involves approaching the Local Registrar for document and ID submissions, and signatures. Few important things to remember for the final submissions:
- Trust Deed with stamp paper of requisite value.
- Self-attested copy of Identification cards/Two passports sized photographs
- Proof of identity of the Settler
- All pages of the Trust Deed signed by the Settler
- Address proof of the Registered Trust Office (this can be electricity bill, water bill or registration certificate). It should be noted that the office address of the Trust will not be counted as the Trust Property and should be in accordance with the Indian Registration Act or Trust Act.
- Two witnesses at the time of signing of Trust Deed. Please note that the identity cards (photocopy) and photographs of the witnesses are submitted to the Local Registrar.
- Two passports sized photograph and self-attested copy of Identity card of each Trustee.
- Submission of Registration fee calculated and applicable as per the Government law. It should be noted that the Revenue Tax of the state of address should be checked before rounding up the Registration fees.
- Create two photocopies of the Trust Deed and all the side regulation forms signed and submitted to the Local Registrar. The original copy stays with you and the photocopy is submitted to the Registrar.
After the full submission of all the attested, signed and witnessed documents, it takes around 7 working days to obtain a registration certificate. Also, it is important to note that there will be an unplanned and undeclared visit by the Government assigned officers within these 7 working days for the office address verification. In many cases, there is an official letter sent to the registered office address as well; this is known as offline address verification.
Final Words: Trust Verification in India is fairly an easy task and requires less documentation than the other countries. But before submitting your interest in Trust Registration it is important to clarify incoming funds sources as there is no salary of Trustees by the Government.