MANDATORY REQUIREMENTS FOR CHARITABLE TRUST
As per Section-6 of the Indian Trusts Act,1882, a Trust is created when the Author/Settlor of the Trust indicates with reasonable certainty by following:
An intention on his part to create a Trust
The purpose of the Trust
The Trust Property
Transferring of Trust Property to the Trustee
Collection of Documents
Review/ Drafting of Documents
Submission with the concerned authority along with govt. fees
Tracking status of Application
Completion and Delivery of Society Registration Certificate
Detail of all members or trustees of the trust with their address and PAN No.
Certified true copies of the Institution’s Registration Certificate
Certified true copies of Laws & by-laws of the Institute
Copy of income tax registration certificate
Audited Balance Sheet and Income & Expenditure account with Audit Report of last 3 years
The original copy of Trust Deed evidencing the creation of the Trust
According to the Indian Trusts Act,1882, 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 and the owner.
- Setting up Schools/educational institutions, Hospitals, etc., basically for the benefit of general public
- Management and Preservation of Family Property, etc., basically for the benefit and welfare of particular person/member
- Discharge of the Charitable/Religious Sentiments of the Author involving public benefit
- Claiming exemptions from Income Tax
- Welfare of the members of the Family who are dependent on the Settlor/Author
- Proper management and preservation of the Property
- Regulating the affairs of the Provident Fund, superannuation Fund, gratuity fund or any other fund constituted by a person for the welfare of its employees
A minimum of 2 Trustees are required in a Trust.
The process is completed within a period of 7-8 days subject to government approvals.
Yes , Trust can be run from any kind of Property.
The Trust Deed must contain the following:
* Name of the Author
* Name of the Trustees
* Name of the Beneficiary or whether it is for the General Public/Charitable Purpose
* Name of the Trust
* Place where its Trustees, principal and branch office shall be situated
* Property being devolved in the Trust
* Intention to divest the Trust Property
* Objects of the Trust
* Procedure for appointment, removal or replacement of a Trustee, their rights, powers and duties
* Mode and method of determination of the Trust
- Simple process of registration.
- Simple record-keeping and even simpler regulations.
- Low possibility of interference by the regulator.
- Exemption from tax due to charitable nature of operations.
- Tax exemption extended to societies may apply to public trusts only to the extent the Income Tax department accepts their activities as being charitable.
- As a charitable institutional form, in essence inappropriate for the for-profit, financially sustainable strategic goal of finance operations;
- No system of equity investment or ownership, thereby, making it less attractive for commercial investors interested in microfinance;
- Commercial investors generally regard the investments in such entities risky primarily on account of their lack of professionalism and managerial practices and are, therefore, reluctant to commit large volumes of funds to such NGOs;
- In accordance with Section 45S of the RBI Act, 1934, no unincorporated bodies are allowed to accept deposits from the public. Organisations registered under the Societies Registration Act and the Trust Act are considered unincorporated bodies. Therefore, according to the law, they are not even allowed to collect savings from their clients; and
- Also vulnerable to the implication under the money lenders (prevention of usurious interest rates) acts of various state governments.