Trust Registration in IndiaINTRODUCTION:-

Generally, for normal people Trust and NGO are the same as both perform generally social services in relation to help those who need education, medical help, and people who lost everything due to the act of God and other social help.

An NGO is a non-profit association that works on its own. It totally depends upon the kind of action a person needs to engage in, NGOs can be enrolled in India as trusts, societies or section 8 companies. A non-profit organization is an establishment or volunteer group that works for a purpose.

On the other hand, as per section 3 of Trust act 1882 “Trust” mean A “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: “author of the trust”; “trustee”; “beneficiary”; “trust property”; “beneficial interest”; “instrument of trust”.

TRUST:-

It is also known as the oldest type of charitable organization. It basically includes an agreement between parties by which one party holds responsibility for another party.

FORMATION OF TRUST:-

  • Business is controlled by more than one member of the family.
  • Alongside flexibility in the manner benefits are distributed, privacy is additionally significant

TRUST DEED REGISTRATION

For the registration of trust an application needs to be submitted to the sub registrar of that area. Trust property will determine the value of non-judicial stamps as it is used to execute the deed. Under section 11 of Income Tax Act when a charitable or religious trust owns the immovable property, the trust must be registered in order to qualify for exemption.

ESSENTIALS OF TRUST DEED:-

  1. Name of author’s/settlers of the trust
  2. Trustee’s name
  3. The name, if any, of the beneficiary or whether it is for public/charitable purposes.
  4. Name of the trust by which it will be known
  5. Trust main and incidental objects
  6. Beneficiary/ies rights and duties
  7. Establishment of trust methods and mode

NGOs:-

It is also known as a non-profit organization, it’s a broader term which include Trust in itself. Their main motive is to work for certain causes in the sector of education, health, environment, workforce and other aspects of daily life. They usually operate without making profit as it comes under section- 8 of Companies Act, 2013, Trust registration, societies registration

NGOs REGISTRATION ACCORDING TO LAWS: -

  1. Under Trust Act 1882 trust can be registered.
  2. Under Societies Registration Act, 1860 society can be registered
  3. Under Company Act 2013 Section 8 companies can be registered.

DIFFERENCE BETWEEN TRUST AND NGO:-

BASIS

TRUST

NGO

ACT

Indian Trust Act, 1982

It’s a broader term which includes:

 

  • Companies Act, 2013
  • Trust Act 1882
  • Societies Registration Act, 1860

REGISTRATION

It requires 2 days to a week to get enrolled.

It requires from 15 days to 1 month to get enrolled depending upon the form of organization.

REGISTRATION AUTHORITY

Charity Commissioner/ Sub-registrar of Registration

Registrar of Company, Registrar of Societies or Sub registrar for trust

TRUSTEESHIP/DIRECTORSHIP TRANSFER

As per Indian Trust Act, 1982 trusteeship cannot be transferred for Charitable Trust as in other form of NGO

In another form of NGO like section 8 directorship can be transferred.

MEMBER GET FUNDS

Trustee are not eligible to receive any fund but only if it is mentioned in trust deed

Once the approval is given by the other form of NGO general body, funding can done.

NAME APPROVAL ISSUE

Under trust name approval is not required.

By making an application to the registrar of companies name must be acquired

Trust Registration- Read More

Societies Registration - Read More

Section 8 Company Registration - Read More

Private Limited Comapny Incorproation: Read More