Documents Required for Trust Registration in India

Trusts are organizations that are set up to strengthen literature, the sciences, and other deserving efforts. They function for educating the underprivileged, giving medical support etc. A trust is properly registered by trust registration in accordance with the Trusts Act of 1882. This commands the recognition and functioning of the trust within the law. The effect of trust registration is that they get legal identity and signature in most jurisdictions and become a separate legal entity. Therefore, let us know about the documents required for trust registration in India

What is a Trust?

• Section 3 of the Indian Trust Act of 1882 defines a trust as a relationship created from property ownership confided by the author, and accepted by, one who shall hold it for the use or benefit of another and for himself. It is the transfer from the owner to a third person (Trustee), whose beneficiary goes under the belief that the property shall be used for the bona fide interest. It is necessary that the Settler should transfer the property in trust to the trustee.
• Trusts can cater to the needs of the least privileged. Contrarily, there is a widespread belief that only rich people can set up trusts. Contrary to this theoretical notion, a trust can be established by normal citizens for charitable purposes. 
• Further, these are of two categories, private & public trusts. The Indian Trust Act of 1882 deals with private trusts and the state laws regulate the public trusts. The Indian Trust Act does not include the states of Jammu & Kashmir and the Andaman and Nicobar Islands.

Parties Involved in the Trust Registration

• Trustor:The trustor who creates the trust by the transfer of his or her property interests and benefits to a trustee.They started the trust's formation and are the property's original owners.
• Trustee: The trustee is charged with holding and managing the assets of the trust for the benefit of the beneficiaries. The trustee has a fiduciary duty to act for the beneficiary's interests and to carry out the duties spelled out in the Trust Deed.
• Beneficiary: The beneficiary is that person or class of persons appointed to receive the benefit or performance of the trust. They are a class of people according to certain criteria or specifically mentioned in the trust deed.

Registration Requirements for the Trust

• At least two people must come together to start a trust.
• Establishing a trust must conform to the sections of the Indian Trusts Act, 1882.
• None of the parties must have been disqualified under the current laws in India. 
• The goals must not conflict with any Indian laws.
• The trustee must act justly and fairly in all of their dealings.
• The set up of trust should not conflict with the general welfare or other relevant legal requirements.
• Individuals must not suffer as a result of the trust's operations.
• The aims of the trust deed should correspond with those of the trust.
• The pure intentions of the parties set forth their intent to establish the trust through a carefully drafted deed.
• There are more than two goals for the trust, and they must both be valid. The trust cannot be established if one goal is valid and the other is not.

Documents Required for Trust Registration in India

The required documents are as follows:

• The most important document for trust registration is the "Trust Deed." It lists the main goals for which the Trust was created. The trust deed is evidence of the existence of the trust. The Deed must be authenticated by two witnesses. The rules and regulations to manage the trust will be prescribed in the Trust Deed.
• Proof of identity includes a passport, driver's license, Aadhaar card, or voter ID. 
• Photos of each trust deed in passport size.
• Every Trust party’s Aadhaar card.
• Each Trust party's PAN card.
• A water or electricity bill that proves the registered office address.
• Schedule (attestation of registration application with INR 100 court cost)
• All trustees have to sign the declaration.
• The attested letter of approval from the settler, along with a court fee of INR 10.
• The owner (trustor) of the property must provide a Certificate of No Objection (NOC).
• Signature of the Settlor’s on every page Trust Deed

Steps Followed for Trust Registration in India

The process is as follows:

Choosing a Name for the Trust:

• You can start your trust registration by choosing the name of your Trust in the first step. The name suggested must never infringe or violate the IP rights of any individual.

Choose the Trust’s Settlers and Trustees:

• A minimum of two trustees creates a trust. However, there is no limit on the maximum number of trustees that a trust can have. The Settler is not eligible to act as a trustee and must live in India.

Draft a Trust Deed:

• The next step is drafting a "Trust Deed." The appropriate non-judicial stamp paper, whose price varies by state, must be used to sign the "Trust Deed." Every page of the photocopy of the Trust Deed needs to be signed by the Settler. At the time of registration, the settlers must be physically present, together with the two other witnesses and a form of identity. Since it describes the connection between the trustee and the trustor, a memorandum of association needs to be drafted.

Registration of Trusts:

• Once you have completed the first draft, the next step is to deliver the "Trust Deed" to the registrar of the trusts with jurisdiction. After getting the deed and sending it to the registrar, the sub-registrar's office manages the remaining steps of the trust registration process.

Get the Registration Certificate:

• After receiving the Trust Deed from you, the registrar returns the photocopy and keeps the original registered copy.
• It takes at least seven working days to provide the registration certificate after all requirements for the trust registration processes have been completed.

Open a PAN and TAN Bank Account:

• The final step in the trust registration process is the application for the issuance of a PAN number and TAN. Additionally, apply for the bank account that will receive all donations.

Benefits of Trust Registration in India

The benefits are as follows:

• Charitable Involvement: People can help themselves, their beneficiaries, and the charities of their choice by establishing a trust.
• Tax Exemptions: The Income Tax Department provide tax exemptions to registered trusts in India, which allows them to take advantage of tax relaxations.
• Financial Support: The registered trusts give financial support to the public and the impoverished.
• Legal Protection: The trust's legal position is protected from needless claims by the Indian Trusts Act of 1882, which ensures complete legal protection.
• Protection of Family Money: Trusts assist in dividing assets, protecting family money that can be challenging to divide between individuals.
• Avoiding Probate: Estate distribution and asset transfer are made easier, as heirs inherit assets without long court proceedings for probate.
• Immigration and Emigration Benefits: Taxation can be mitigated through a trust, and it will also afford ease of use at the time of immigration and emigration.

Conclusion

There isn't much paperwork to organize when registering a trust. There are very less documents required for a trust registration than for other forms of registration. Additionally, the trust registration process has no rigorous requirements. The parties interested in creating a trust should clearly define their duties and responsibilities in order to avoid future disagreements in establishing a trust.