NGO Registration : Society, Trust Registration, Income Tax Registration, FCRA Registration

Trust Registration

Registration and Formation of NGO as a Trust is the most suitable and flexible registration process. After registration of the charitable Trust in NGO form and status it is easy to manage, maintain and run it as NGO without unnecessary and unwanted interfarence of any regitering authority. NGO that is registered as a Trust has equal status of Society to get grants, funds and other support from any of the funding providers from Government Ministries to Private and International funding agencies.
According to Section 3 of the Indian Trusts Act “trust” is defined as 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.

According to charitable and religious endowment act and the Indian Trust act Charitable Trusts are created by all communities in India. Under the Wakf ActMuslims can form wakfs for the charitable purpose. In Trust and Wakf, some property (movable rupees or immovable asset) is declared and dedicated to public utility. So for this purpose an institution is founded as Trust and founds are entrusted with the duty of performing the acts.
A charitable Trust is formed by the Settler that is founder who holds the property so dedicated shall hold it under trust and shall execute the specified purposes. Under the formation process of the Trust it is desirable for a person who is dedicates his property to a charitable purpose, that a trust is formed under a written instrument and a body of trustees be appointed to manage, control and regulate the affairs of the endowment and execute its purpose.

Trust Deed (Memorandum or Articles of Association)
The instrument or the document or the Memorandum of Articles by which the trust is declared is called the ‘instrument of trust‘ and more clearly it is known as the ‘Trust Deed‘. A trust may be declared either by will or inter vivos by agreement, a trust deed may be in the form of a testamentary instrument i.e. will or a non- testamentary instrument.

Contents of a Trust Deed

  • A Trust may be created with clearly defined intention, legal clauses and required objects. The main reason and main purpose to form Trust have to be declare. A trust deed, generally, incorporates the following information:
  • A Trust may be created with clearly defined intention, legal clauses and required objects. The main reason and main purpose to form Trust have to be declare. A trust deed, generally, incorporates the following information:
  • Name of the settler of the trust as a inaugural founder.
  • Names of the founder trustees.
  • Detail and clarification of the beneficiaries in the objects as it shall be the public at large.
  • Name of the Trust must be mentioned in the memorandum. The name of Trust can be any but it must not be the similar or equal name to the Government related authorities or departmental or project name. The names mentioned as prohibited to use them in the Emblem Act or the similar names to these prohibited names must not be allowed.
  • Addresses of the registered office where its principal and/or other administrative offices shall be situated.
  • Property or movable asset (Amount in Rupees) that shall handover to the trustees under the trust for the benefit of the beneficiaries.
  • Have to clearly prepare and include objects of the trust.
  • Objects of the trust must be included almost on all or most required purpose so it is easy to get funding and support where some specific objects are required.
  • It is to be included in the Trust Deed the procedure for appointment removal or replacement of a trustee, their rights, duties and powers, etc.
  • Rights and duties of the beneficiaries of the Trust must be clearly stated and mentioned.
  • The mode and method of determination of the trust have to included Trust Deed.

Trust Registration

In case of public charitable trusts, whether in relation to movable property or an immovable property and whether created under a will or inter vivos (transfer of property or gift by agreement between persons), registration is optional but desirable in case funding and other transactions. However, in case of a charitable trust in relation to an immovable property, for claiming exemption u/s 11 of the Income Tax Act, it is essential that the instrument of trust i.e. Trust Deed (known as Memorandum) is duly registered.

Registration of Trust Deed under Indian Registration Act
An instrument assigning any right, title or interest in an immovable property of value exceeding Rs. 100 is required to be registered under the Registration Act, 1908. Thus, a Trust Deed involving an immovable or movable property must be registered.
The Trust Deed should be presented for registration (sec. 23), in the office of the Sub Registrar within whose sub district the whole or some portion of the property (sec. 28) or registered office of Trust is situate. Registration fees, as prescribed by the State Government, is payable on presentation of the document (sec. 78).
A trust deed relating to immovable property must, for the purposes of registration, contain a description of such property, sufficient to identify the same (secs. 21 & 22). If there are any interlineations, blanks, erasures or alterations in a deed, the same must be duly attested by the person(s) executing the deed (sec. 20).
When the Registering Officer is satisfied that the provisions of the Act as applicable to the document presented for registration have been complied with, he/she shall endorse thereon a certificate containing the word “registered”, together with the number and page of the book in which the document has been copied. Such certificate shall be signed, sealed and dated by the Registering Officer, and shall then be the conclusive evidence that the document has been duly registered (sec.60).
In terms of section 47, a registered trust deed shall operate from the time from which it would have commenced to operate if no registration there of had been required or made, and not from the time of its registration. In other words, a registered trust deed shall become operative (retrospectively) from the date of its execution.

Registration of Trust under Public Trusts Act
A charitable trust is not required to obtain registration under the Indian registration Act. However, in certain States like Maharashtra and Gujarat there is a Public Trusts Act, which requires such institutions trusts to get registered as such under the said Act.
According to the Bombay public trusts Act, 1950 all charitable and religious institutions are to be registered as public trusts and will come under the supervision of the charity commissioner of the state.
For details, the relevant laws of trusts applicable in the state, if any should be consulted, viz. Bihar Hindu Religious Trusts Act, 1950, Madras Hindu Religious and Charitable Endowments Act, 1959, Puri Sri Jagannath Temple (Administration) Act, 1952, Bombay public trusts Act, 1950, Madhya pradesh public trust Act, 1951, Orissa Hindu Religious Endowments Act, 1951, Travancore-Cochin Hindu Religious Institutions Act, 1970, Rajasthan Public trusts Act, 1959, Uttar Pradesh Hindu public religious Institutions (prevention of Dissipation of properties – Temporary Powers)Act, 1962, Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1966.

Applicable Laws for Trust and Trust Registration

Charitable and religious Trusts Act, 1920
The only Central Legislation, the Charitable and Religious Trusts Act, 1920, which applies to all religious and charitable trusts, provides facilities for obtaining information regarding public charitable and religious endowments and trusts and to enable the trustees to expenditure incurred in certain suits against the trustees. The Act does not provide any effective control over public charitable and religious trusts and endowments.

Religious Endowments Act, 1863
The Act enables the Government to divest itself of the management of certain religious institutions, which were/are controlled by the government.

Indian Trusts Act, 1882
The Act governs private or family trusts and excludes from its ambit wakfs and charitable or religious endowments, though the principles forming the basis of the provision of the Trusts Act can be applied to public trusts as well. Besides, certain general provisions of the Act, e.g. section 46 dealing with renunciation by trustees after having once accepted the trust, section 47 dealing with prohibition to the trustee to delegate his office to any other person, and the like, shall equally apply to public trusts.

A specimen trust deed of a general charitable trust

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