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NGO / Trust Registration

The term ‘trust ‘is defined as An obligation annexed to the ownership of property and arising out of a confidence reposed in and declared  & accepted by the owner or and accepted by him, For the benefit of another or of another and the owner.

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What is a Trust?


A TRUST is defined as a fiduciary relationship between the trustee and a trustor. In a trust, the Trustor is the party that gives the right to another party (‘The Trustee’) to hold title to property or assets for benefit of a third party (‘The Beneficiary’). Trusts are generally incorporated or established in order to provide legal protection for the assets of the trustor, to ensure that those assets are distributed or applied in accordance with the wishes of the trustor, and to save time, minimalize paperwork. In some cases, trusts are also established to avoid or reduce inheritance or estate taxes.

The term ‘trust ‘is defined as

➲ An obligation attached to the ownership of property and

➲ arising out of a confidence reposed in and

➲ declared  & accepted by the owner or and accepted by him,

➲ For the benefit of another or of another and the owner.


author of the trust’ is the person who responses or declares the confidence,

trustee’ is the person who accepts the confidence

beneficiary’ is the person, for whose benefit, the confidence or the trust is accepted;

trust property’ or ‘trusts money’ is the subject matter of the trust;

beneficial interest’ is the right of the beneficiary’s against the trustee as owner of the trust’s property;

instrument of trust’ is the instrument declaring the trust

In a legal sense, word trust has a technical and definite meaning which is very much different from the sense in which this word is used in daily parlance. It implies a legal concept or relationship similar to other relationships created by law, e.g., Contract, Agency.

Classification of Types of Trusts

There are several classes of trust divided according to the mode of their creation. Some of the prominent classes of trusts are as follows:

➲ Charitable or Religious Trust

Charity means piety/mercy/betterment/welfare something religious or divine, so charitable trust means a trust created for the charity of people or society.

➲ Express and Implied Trusts

Express Trust: This is one that is intentionally declared by the maker of a trust known as the settlor, or the testator, whether the trust is created by a will. It is one which the settler himself created through the manifestation of a desire to create one. It is a kind of trust where terms and conditions are clearly written in the instrument.

Implied Trust: These are trusts which court deduces from the parties' actions and the transaction's circumstances. For example, if a person decides to settle property for the benefit of another in return for valuable consideration, the other person immediately becomes a trustee of the property. It is a type of trust where terms and conditions are written but the intention is not clear but can be understood.

➲ Public and Private Trusts

Private Trust: A private trust is one that benefits particular persons irrespective of whether they are immediately ascertainable and if they don't vest within the perpetuity period the interest defined therein will fail. It is a type of trust which is created for a group of people or for a family or particular

Public trust: A trust which is created for common people, for a charitable purpose, or for the welfare of society.

➲ Constructive Trust

It applies to an arrangement whereby a person who has obtained title to a property has an equal obligation to pass it to another person to whom it rightly belongs, on the grounds that obtaining or maintaining it is wrongful and would unjustly enrich the person if he or she is permitted to retain it.

Procedure for Registration of a Trust

Preparation of Trust Deed:

It is not a mandatory requirement but it is desirable to have a Trust deed in place. It is also enforceable by law and provides an increased sense of security. Following details must be mentioned in the deed:

  • Name and address of trustor (the one who set up the trust)
  • Name and address of another trustee
  • Address for correspondence & Evidence
  • Name of trust
  • Minimum and maximum number of trustee
  • Registered office address of the trust
  • Objective of trust
  • Rule and regulation of trust

​➲ Particulars of a Trust Deed

  • There should be least three parties are required to form a trust.​
  • Author of the trust’s name & address should be mentioned in the deed.
  • Details of trustees/ member: Address and details of trustees shall be mentioned in the deed. A minor cannot be a member/trustee.
  • Details of the beneficiary shall also be included in the deed.
  • Objects of trust must be clearly mentioned in the trust deed.

➲ Registration of the trust with the trustee:

The next step after the preparation of Trust will be to register the Trust deed. It is not compulsory but is needed to get the trust registered under the Income Tax Act for availing the exemptions under Section 12A and Section 10G. Moreover, a deed is a prima facie evidence of the existence of a trust and also a written proof of the existence of the trust. The deed shall be submitted to the local registrar of trust along with the one copy and the settler shall sign all the pages of the copy of the said deed.

➲ Tenure of Trustees:

Tenure for trustees shall be a minimum of 1 year up to a maximum of 5 years.

➲ 80G and 12A certificate application is for tax benefits

A trust shall go for registration under Section 12A and 80G in order to avail Tax exemptions prescribed by the Income Tax Act.

Documents required for registration of a trust

The application for registration of Trust shall be accompanied with the following particulars: –

➲ Particulars of documents creating the trust;

➲ Particulars other than documents about creation;

➲ Objects of the trust;

➲ Sources of income of the trust;

➲ Details of encumbrances, if any, on trust property;

➲ Details of the scheme, if any, relating to the trust;

➲ Particulars of title deeds relating to the trust’s property

➲ The name and addresses of the Trustees and managers;

Documents for Registration of a Trust Deed

➲ Deed of trust on stamp paper with requisite stamp duty;

➲ Photograph & Identity Proof of trustor (one who set up the trust);

➲ Photograph & Identity Proof of two trustees;

➲ Every page of the trust deed, the signature of the trustor;

➲ At least two witnesses on the trust deed.

Difference between various type of non-profit organization

Sl No.


Section 8




Govern Under Act

It is governed by the Indian Companies act 2013

It is governed by Societies Registration act 1860 or by the State society act as per the registration

It is governed by The Indian trust act 1882


Registration Authority

Authority is under regional director and registrar of companies of state

Authority lies under the hands of the registrar of societies

Authority is under the jurisdiction of deputy registrar/charity commissioner of the relevant area


Minimum Requirement

Minimum 2 director and 2 member

Minimum of seven members

Minimum 2 trustees are required


Primary registration document

Memorandum and Article of association under which objects and company internal rules are defined respectively

Memorandum of Society under which objective of the society is mentioned

Trust deed under which all the objects, rules and powers are defined


Managing body

Board of director of companies manages the company

It is managed by governing council or managing committee

Managed by trustees


Revocable/ Irrevocable

It may get dissolved as per the provision of the act

It may be dissolved, dissolution must be approved by at least 3/5th of the society’s member

These are generally irrevocable



The company need to file a financial report to concern ROC and need to intimate ROC as per the requirement of act

Societies need to file annually a list of the names, addresses, and occupations of their managing committee members and other details to registrar

There is no need for annul return filing


Registration under 80G and 12AA





Subsidy by government

Mostly preferred

Moderately preferred

Moderately preferred



Most preferred

Moderately preferred

Moderately preferred



Member can seek any information from the company

Fully transparent

Less transparency then section 8 company

Less transparent

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