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Trusts are meant for the benefit of a class or the public. They are usually created for charitable, educational, religious or scientific purposes. Trusts work towards eliminating poverty, providing life care, and endorsing art, science and literature. There is no Central Act that is applicable for Public Trusts. States have enacted their own acts in accordance with their administration and other circumstances, as for the regulation of such trusts. The popularity of Public Trusts largely owe it to their ease of registration and management. A trust deed stating the trustees, the objectives of the trust, and the intended beneficiaries who are a part of the general public is all it takes to register a Public Trust under the State Trusts Act. A Public Trust is eligible for government tax rebates. Public Trust has a more permanent nature than a Private Trust.
Public trusts may be created inter vivos or by will. Both the state and beneficiaries can manage and oversee the working of such trusts. Three assurances are required to create a charitable trust:
1. Declaration of trust made by settlor, which is binding upon him.
2. Setting apart certain property by settlor and thereby depriving himself of the ownership rights.
3. A statement of object for which the property is thereafter to be held, that is the beneficiaries.
Public Trusts have Boards that consists of Founder, Trustee Secretary, Treasurer and other Trustees. A trustee must be a resident of India. The minimum number of members required to form a Trust is 3, whereas the maximum limit for the quorum of the board of trustees is 21. Minimum age to become a Trustee is 18 years for females and 19 years for males.
Private Limited Company and Private Trust can be converted into Public Trust.
Registered trusts intended for charitable or religious purposes are eligible for tax exemptions under certain conditions. If such trusts spend more than or equal to 85% of its total receipts towards its object in India, then the remaining 15% will not be taxed.
Choosing an appropriate name for the Trust is the initial step to registering a Trust. The proposed names should be devoid of anything that suggests patronage by the Government of India or any State Government. Names that are prohibited under the ‘Emblems and Names Act 1950’ cannot be proposed either. However, names that are already registered as a Trust can be availed; there is no interdict in this regard.
The MoA and Rules and Regulations applicable to the Trust is known as Trust deed. Trust deed is crucial to the legal existence of a Trust. Preparing the trust deed stating the names and addresses of the trust, trustees & general body members, specifics of the registered Office, objectives, rules & regulations, beneficiaries and bylaws of the trust, is the next step. The Trust deed will be submitted to the local Registrar.
Once all the submission formalities are completed, and upon the verification of the submitted documents by the Registrar, the registration certificate will be granted in 7 working days.
For Directors/Shareholders:
(Any one)
(Any one)
For Company in Registration:
Authorization from the owner or authorized occupant of the premises.
Utility Bill in owner’s name.
1. Conveyance/ Lease deed/Rent Agreement
2. Copy of the utility bills
3. NOC from Landlord
A trust deed is a document that states the details of the trustees, the objectives of the trust, and the intended beneficiaries who are a part of the general public. Trust deed is the first and foremost prerequisite for the legal existence of a Trust.
A minimum of 3 members is required to register a Public Trust. The upper cap for member strength is 21.
No, trusts are irrevocable. They cannot be terminated without permission of court.
Trustee is a person in whom the trust property is vested.
Minimum age to become a Trustee varies for males and females. It is 18 years for females where as a male trustee requires to be at least 19 years old.
The nature of a trust is determined by the purpose of the trust and the utilization of its income. If the aforesaid two encompasses the welfare of the general public, the entity will be a Public Trust despite the Board of Trustees being members of one particular family.
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