The Trust Registration Process
By executing the Trust deed, the Trust can be established online. The Trust deed is the first step in the Trust registration process. Before getting into the specifics of Trust registration, let’s first define trust.
Trust in Indian Culture: What Does It Mean?
It is governed by the Indian Trust Act 1882 that trusts are registered. Trusts are harmonizations that take place when the owner transfers property to a trustee. Transferring the property, in this case, is done to benefit the trust’s beneficiaries. It is the trustor’s responsibility to transfer the property to the trustee along with a proclamation stating the trustee will hold the property for the benefit of the trust’s beneficiaries.
Several prerequisites must be met before a Trust can be successfully registered. Trust Deeds must be written on non-judicial stamp paper prior to registration. There are stamp duty rates in every state.
Do I Need Any Documents to Register a Trust?
To register a trust, you will need the following documents:
- As the trustee and trustee’s representative, Aadhaar cards, voter IDs, passports, and driving licenses are acceptable forms of identification.
- A copy of the property/utility bills showing the registered office address (Telephone, Water, Electricity Bill).
- It is necessary to have a letter of authorization from the landlord when renting property.
- Purpose of registration of trust deed
- Trustee and Settlor information (self-attested copy of I.D., address proof, and occupation information).
- Using the correct stamp value for the trust deed.
- Trustees and settlors in photographs.
- Trustees’ and settlors’ PAN cards.
- A trust deed also contains the following information: -Number of trustees.
- Address of the trust’s registered office.
- The trust’s proposed name.
- Trust rules and regulations to be strictly followed.
- The settlor and two witnesses must be present when the trust is registered.
How do trusts get registered?
In order to register a trust, the following steps must be followed:
Name That Is Appropriate:
As a first step, an applicant must choose a suitable name for the trust. The proposed name must fall within the restricted list of names set out in the Emblems and Names Act.
Setting up a trust deed :
Trust deeds are documents that contain all the important registration information, and they must be presented to the Registrar when the Trust is registered.
Settlers and Trustees of Trusts :
The next step is to select the trust’s settlor and trustees. There are no requirements regarding the number of settlers/authors. A Trust must also have a minimum of two trustees.
Memorandum of Association preparation :
It is necessary to draft the Memorandum of Association, which serves as the charter of a trust, in order to register it.
Requirements for Fee Payment :
Next, you must pay the registration fee for the Trust.
Copying the Trust Deed :
The registrar’s office will issue a certified copy of the Trust Deed within one week of receiving the paperwork.
Frequently Asked Questions
- Does Section 12AB require the trust to register?
The Income Tax Act of 1961 requires trusts to be registered under section 12AB in order to obtain an exemption under section 11.
2. What is the legal status of trust?
As opposed to corporations, trusts are not separate legal entities. When the trustee receives property from the settlor for the benefit of the beneficiary, a trust is formed. Trust deeds formalize this arrangement.
3. How do Trust Parties get together?
Trustees, beneficiaries, and settlors