To qualify for trust registration, the following conditions must be fulfilled:
Minimum Number of Founders: Trust must be established by at least two or more individuals.
Compliance with the Indian Trusts Act of 1882: The trust must be formed in accordance with the provisions specified in the Indian Trusts Act of 1882.
Disqualification Status: None of the parties involved should be disqualified under any prevailing law in India.
Conformity with Legal Objectives: The objectives of the trust must not contravene any existing laws in India.
Fair and Just Conduct: The trustee must conduct their activities in a fair and just manner.
Alignment with Public Interest: The formation of the trust should not be contrary to public interest or any other applicable laws.
Non-Harmful Activities: The activities carried out by the trust must not cause harm to any individual.
Consistency with Stated Objectives: The trust activities should align with the objectives outlined in the trust deed.
Appropriately Drafted Trust Deed: The trust deed must be drafted appropriately, reflecting the genuine interests of the parties involved in forming the trust.
Validity of Multiple Objectives: If the trust has more than two purposes, both purposes must be valid. If one goal is reasonable and the other is invalid, trust cannot be formed.
Components of a Trust Deed
A trust deed stands as a pivotal document delineating essential details and provisions governing a trust. It encompasses the following key clauses:
Operational Period: Specifies the duration or term for which the trust will remain in operation.
Registered Office Address: Indicates the official address of the trust’s registered office.
Geographical Scope: Defines the geographical area or region where the trust will conduct its activities.
Goals and Objectives: Outlines the goals and objectives that the trust aims to achieve.
Details of the Settlor: Provides information about the person establishing the trust (settlor) and details of the assets or property being transferred to the trust.
Board of Trustees Information: Includes details about the board of trustees, encompassing their membership, qualifications, terms, and tenure.
Roles, Responsibilities, and Powers of Trustees: Clearly defines the roles, responsibilities, and powers of the trustees.
Amendment Procedures: Outlines procedures for amending the trust deed and provisions for the closure or termination of the trust.
Legal Compliance Assurance: Ensures that the trust operates in accordance with relevant laws and regulations.
Procedure for Trust Registration
The detailed process for applying for Trust Registration is outlined below:
1. Name of the Trust:
Choose an appropriate name for the trust that adheres to the provisions of relevant acts, including Trademarks, Copyrights Act, Intellectual Property Rights Act, and Emblems and Names Act, 1950.
2. Settlers of the Trust:
Determine the individuals who will act as settlers of the trust. While there is no restriction on the number of trustees, a minimum of two trustees is required. The author of the trust cannot be a trustee, and all trustees must be residents of India.
3. Memorandum of Association (MOA):
Prepare a Memorandum of Association (MOA) outlining the objectives and purpose for which the trust is being formed. Ensure that the goals stated in the MOA are legally permissible.
4. Draft the Trust Deed:
Create a legally binding trust deed that establishes the trust. The trust deed, containing all terms and conditions agreed upon by the author, trustees, and beneficiaries, must be presented to the registrar during the registration process.
5. Submission to the Registrar:
Submit the drafted trust deed and other required documents to the registrar. This involves the active participation of the author, trustees, and beneficiaries.
6. Review by the Registrar:
After reviewing the submitted documents, the trust will be registered if the registrar is satisfied with their validity and compliance.
7. Certificate of Trust Registration:
Upon approval, the registrar will issue a trust registration certificate. Trustees and the trustor should retain this certificate. Subsequently, the trust, now registered, can open a bank account in its name.
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