Online Trust Registration

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Online Trust Registration- An Overview

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Online Trust Registration is the most convenient way to begin a non-governmental organization or NGO. A trust works with the aim to eradicate poverty, provide free and compulsory education to the underprivileged and offer medical relief and services to those in need. Apart from this, they also function with the objective of promoting arts, science and literature in the community. It is worth mentioning that trusts are irrevocable, that is, they cannot be amended or terminated without due permission of the court.

Taxzona helps in assisting you with the entire trust registration process with the inclusion of attaining a trust certificate, deed of trust, rental agreement, etc.

In this article, we will learn about what is a trust, online trust registration process, documents required for online trust registration and online trust registration service provider.

What is a Trust?

According to the Indian Trust Act, 1882, “a trust is an obligation expropriated to the ownership of a property, arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him/her, for the benefit of another and the owner.” In simple words, a trust is an arrangement where owner or a trustor transfers his/her property to the trustee for the benefit of a third party. It shall be noted that the property is transferred to the trustee along with due proclamation that the property should be held by the trustee solely for the purpose of beneficiaries of the online trust registration.

Trusts can be established for a number of purposes, including social services, education, healthcare, provision of facilities for recreation, or any other purpose concerning general public welfare.

Types of Trusts

1. Public Trust:

A Public Trust is the one that concerns the general public at large. It works towards the cause of social welfare. A public trust can further be subdivided into a Public Charitable Trust and Public Religious Trust.

2. Private Trust:

A private trust is the one whose beneficiaries include individuals or their families.

What is a Trust Deed?

A trust deed is the primary legal document which states the reason for formation of the trust, its functionalities, working and closure. Given below are the important clauses to be provided for in the Trust Deed:

  1.   Name of the trust
  2.   Registered office of the trust
  3.   Area of operations under the trust
  4.   Aims and objectives of the trust
  5.   Details of the Trustee
  6.   Assets of trust
  7.   Particulars of Board of Trustees
  8.   Powers and functions of the managing trustee
  9.   Closure of the Trust Deed
  10.   Applicability of the Indian Trust Act

Let us now dig deeper into the Online Trust Registration.

Constitution of the Trust

A trust comprises the Board of Trustees. The Board constitutes the following:

  1.   Author/Founder of the Trust
  2.   Managing Trustees
  3.   Other trustees

Please note that the quorum of the Board of Trustees shall not exceed a maximum of 21 members.

Online Trust Registration Process

Step 1: Choose a suitable name

The first step in the online trust registration process involves opting for an appropriate name of the trust. It must be noted that the name so suggested by the author of the trust, shall not be under the restricted category as per the provision of the Emblems and Names Act, 1950.

Step 2: Authors and Trustees

As per the provisions under the Indian Trust Act, 1882, there is no specifically defined provision to the number of settlers and authors. Although, in most cases, there is only one Author of Trust. A minimum of two trustees are required for online trust registration in India. However, the author and trustee cannot be the same person.

Step 3: Formulate MoA and Trust Deed

A Trust Deed is legal evidence providing for the existence of Trust. It comprises rules and regulations of the Trust. This document contains laws concerning removal, addition or changes in the trustees. On the other hand, a Memorandum of Association or the MoA represents the charter of the trust. It specifies the relationship between the trust and the trustee and the objectives for which the online trust registration is formed.

Step 4: Preparation of Trust Deed

The applicant is required to prepare the Trust Deed on a stamp paper along with all the requisites required for. The value of a stamp paper is of a certain percentage of the total amount invested in the Trust. Once the applicant submits all the required documents, he/she shall collect a certified copy of the Trust Deed within one week from the office of the Registrar.

Step 5: Register on the National Trust Portal

After the receipt of the Trust Deed, the applicant may register on the Office of Charity Commissioner portal and generate the Form under Schedule II duly signed and stamped by the authorized signatory. After filling in all the particulars, click on ‘Submit’ option. Pay the online trust registration fee and take a printout of the acknowledgement slip for further purposes. On the Homepage, click on the dashboard and see the status of your application.

Step 6: Obtain the Certificate of Registration

After the online submission of the application, the applicant, his/her representative or his/her advocate shall remain present within thirty days from the date of submission with the hard copies of all the requisite documents. Thereafter, one may contact Judicial Superintendent and obtain the Certificate of Registration to carry on the activities of the online trust registration. Please note that with effect from October 2018 of the Income Tax, Central Board of Direct Tax has substituted the Rule 17A dealing with application of registration of charitable or religious trusts, with the section 12A wherein, Form 10A must be filed for online trust registration.

Documents required for Trust Registration in India

Following is the list of documents required for trust registration:

  1.   Self attested copies of identity proofs such as Aadhar, Voter ID, Passport of the settler
  2.   Self attested copies of identity proofs such as Aadhar, Voter ID, Passport of each of the trustees
  3.   PAN Card
  4.   Address proof of the registered office such as Electricity Bill, Water bill
  5.   Certificate of Registration of the Trust
  6.   Trust Deed
  7.   NOC from the landlord
  8. Vankalatnama 
  9. Self-declaration by the settler 
  10. Authority letter from Board of Trustees
  11. Consent letter of trustees
  12. Trust Application 

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FAQ's

Yes. It is mandatory for a trust to get the registration under section 12AB of the Income-tax Act, 1961.

Form 10A (With a new format) & Form 10 AB are available in respective cases.