TRUST REGISTRATION

TRUST REGISTRATION

There are different acts that govern trusts in India i.e., Indian trusts act 1880, the charitable and religious trust act, 1920, the religious endowments act 1863, and the charitable endowments act 1890.

Trust registration refers to the process of formally establishing a trust and ensuring its legal recognition. It is based on fiduciary relationship between two parties. The trustee holds the property in the benefit of third party i.e., beneficiary.

As per section 3 of the Indian trusts act 1880, the definition of a trust is as follows –

“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, or of another and the owner”

Types of trust:

Public trust– The public is the prime beneficiary in this trust. These trusts can be classified further into public religious trusts and public charitable trusts.

Private trust– This is not for the benefit of public the beneficiaries of such trust mainly include individuals or families.

The parties involved in the registration of a trust includes following:

• Author: The settlor, also known as the grantor or trustor, is the person who establishes the trust by transferring assets to the trust.

• Trustee: He is the person responsible for maintaining the Assets and carrying out the instructions outlined in the trust deed.

• Beneficiaries: The beneficiaries are the individuals or entities who will benefit from the trust assets or income.

• Registrar or authority: Depending on the jurisdiction, there may be a registrar or government authority responsible for overseeing the registration of trusts.

• Legal professionals: Lawyers or legal professionals are often involved in the registration process to provide guidance, prepare the necessary documentation (such as the trust deed), and ensure compliance with legal requirements.

   Important steps for registration of trust:

• Creation of the trust- The trust is initially created by an author, who transfers assets to a trustee. The settlor also outlines the terms and conditions of the trust in a legal document called the trust deed or agreement.

• Appointment of trustees – The settlor appoints one or more trustees who will be responsible for managing the trust and its assets in accordance with the terms of the trust.

• Agreement: The trust deed or agreement outlines important details, such as the purpose of the trust, the beneficiaries, the powers and responsibilities of the trustees, and any specific instructions for asset distribution or management.

• Registration of trust: Depending on the jurisdiction, there may be requirements for registering the trust with the relevant authority. This registration process typically involves submitting the necessary documents, paying fees, and complying with any specific legal formalities.

• Public or private registration: A trust can be public or can be private some jurisdictions maintain public registers of trusts, while others may have private registers or no registration requirement at all.

 Documents required for registration of trust:

• Stamp paper
• Proof of identity (Adhaar card / passport etc)
• Address proof of registered office
• NOC from the property owner
• Passport-sized photographs of the Trustor

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