What is Trust
"Trust" is a transfer of property by the owner to another for the benefit of a third person along with or without himself or a declaration by the owner, to hold the property not for him and another.
Section 6 of Indian trusts Act, 1882 provides that a trust is created when the author of the trust indicates with reasonable certainty by any words or acts:-
NGO Legal existence in India can be in the Form of :
- An intention on his part to create thereby a trust.
- The purpose of the trust.
- The beneficiary, and
- The trust property and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the trustee.
The Indian trusts Act 1882 provides that no trust in relation to immovable property is valid unless declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered, or by the will of the author of the trust or of the trustee.
- A person who creates a trust is called the settler or author, the person to whom the property is transferred on trust is called a trustee and the person for whose benefit the property is transferred is called the beneficiary
- Minimum 2 persons are required to create a Trust
- Private and public trust
A trust may be private or public.
When the purpose of the trust is to benefit an individual or a group of individuals or his or their descendants for any legal person and who is capable of holding property, it is private trust.
When the purpose of the trust is to the benefit the public or any section of the public, it is public trust.
- Who can be trustee
Section 10 of the Indian Trusts Act 1882 inter alia provides that every person capable of holding property may be a trustee; but where the trust involves the exercise of discretion, he cannot sexecute it unless he is competent to contract.
- Who may be a beneficiary
Section 9 of the Indian Trusts Act 1882 inter alia provides that every person capable of holding property may be a beneficiary.
Different states in india have different trusts acts in force which govern the trusts in the state; in the absence of a Trusts Act in any particular state or territory the general principles of the Indian Trusts Act 1882 are applied.
- Main instrument of trust
The main instrument of any public charitable trust is the deed, wherein the aims and objects and mode of management of the trust should be enshrined. In every trust deed, the minimum and maximum number of trustees has to be specified. The trust deed should clearly spell out the aims and objects of the trust, how should be managed, how other trustees may be appointed or removed etc. The trust deed should be signed by both the settlor\s and trustee\s in the presence of two witnesses. The trust deed should be executed on non- judicial stamp paper, the value of would depend on the valuation of the trust property.
- Application for registration
The application for registration should be made to the official having jurisdiction over the region in which the trust is sought to be registered.
After providing details (in the from) regarding designation by which the public trust shall be known, names of trustees, mode of succession, etc, the applicant has to affix a court fee stamp of Rs.2 to the from and pay a very nominal registration fee which may range from 3to 25, depending on the value of the trust property.
The application form should be signed by the applicant before the regional officer or superintendent of the regional office or a notary. The application from should be submitted, together with a copy of the trust deed.
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