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Trusts


Ledger offers consultancy services to our clients regarding the formation of NGO (Non Governmental Organization).

The public charitable trust is a possible form of not-for-profit entity in India. Typically, public charitable trusts can be established for a number of purposes, including the relief of poverty, education, medical relief, provision of facilities for recreation, and any other object of general public utility. Indian public trusts are generally irrevocable. No national law governs public charitable trusts in India, although many states (particularly Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh) have Public Trusts Acts. A charitable trust is not required to obtain registration under the Indian Registration Act.

A Trust is a legal arrangement whereby the owner (the Settlor) entrusts another party (the Trustee) to take care of his asset/s for the benefit of the beneficiaries he has chosen under instructions in the form of a trust deed.

A Trust is an effective estate planning instrument for an Individual to ensure that his assets are protected and looked after by a Trustee or Trustees for the benefit of the trust beneficiaries.

There are three parties involved in a Trust.
The Trustee - The person or a corporation who manages the Trust assets
The Settlor – Person who sets up the Trust.
The Beneficiary - the person who receives benefits from the Trust

The following are requirements in formation of a Trust

  • A written Trust Deed signed by the Settlor, 2 Trustees (minimum) and 2 witnesses.
  • Property of the Trust (Money or Other Property).
  • Purpose/Object of trust.
  • Stamp Paper depending on value of property under trust.
  • Registration of deed in Sub-Registrar's office. Payment of apt registration charges.*
  • Name of Trust
  • Address of Trust
  • Apply for a permanent account number for the trust and open a bank account for it.
  • *The trust may or may not be registered; registration is required only if an immovable property is transferred to the trust.

Types of Trusts in India

There are two types of trusts in India: private trusts and public trusts. While private trusts are governed by the Indian trusts Act, 1882, public trusts are divided into charitable and religious trusts. The Charitable and Religious Trust Act, 1920, the Religious Endowments Act, 1863, the Charitable Endowments Act, 1890, the Bombay Public Trust Act, 1950 are some of the statutes for the enforcement of public trusts in India. Recently, trusts can also be used as a vehicle for investments, such as mutual funds and venture capital funds. These trusts are governed by Securities and Exchange Board of India (SEBI). Classification in terms of motive of formation is as follows:

Simple Trust

Trustee is just a passive depository of the Trust property. There are no active duties expected from Trustee and no directions are given to him.

Special Trust

Trustee is active and acts as an agent to execute the Grantor's wishes. This Trust is operative.

Private Trust

Settlor creates a Trust primarily for benefit of one or more particular individuals as its Beneficiary.

Public Trust

Beneficiaries are the general public or a class as a whole. It has some charitable end as its Beneficiary.

Express Trust

Here, the Settlor creates a Trust over his assets either in present or upon his death. It can be either by way of a will or Trust deed.

Implied Trust

It is created where some legal requirements for an Express Trust are not met, but intention on behalf of the parties is to create a Trust that is presumed to exist.

Others

Others depending on the type of object(s).

Our services include
  • Preparation of Trust Deed / MoA /
  • Application for Digital Signature Certificate (DSC)
  • Application for Director's Identification Number (DIN)
  • Formation of New Trust / Society / Section 8 Company
  • Registration U/s 12A and 80G of the Income Tax Act.
  • Registration under Foreign Contribution Regulatory Act (FCRA) viz. Prior approval & permanent registration.
  • Advise on general issues relating to Society / Trust.
  • Various registrations applicable to Charitable Organisations
  • Managing the taxation aspects of Charitable Organisations
  • Advise and management of Foreign contributions to Charitable Organisations
To see how Ledger can help you in , get in touch with us at contact@ledger.in or call us at 080-41692691 or Click here

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