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TRUST Registration

To obtain the benefits of a Trust, it needs to meet certain prerequisites, and the registration process is one of the prerequisites. Are you planning to register the trust?

Get Your TRUST registered in 7 days

Incorporate your TRUST with Auriga Accounting

REGISTER NOW..

Why Should I Use Auriga Accounting For TRUST Registration ?

Auriga Accounting has a team of registration experts who can provide complete guidance to register your TRUST.

book appointment

Our team of experts will get in touch with you and collect all necessary documents and details

Resolve all your queries

We fill out and file your application for registration

Complete your registration

Your TRUST is registered

Why Should I Use Auriga Accounting For TRUST Registration?

Auriga Accounting has a team of registration experts who can provide complete guidance to register your TRUST .

book appointment

Our team of experts will get in touch with you and collect all necessary documents and details

Resolve all your queries

We fill out and file your application for registration

Complete your registration

Your TRUST is registered

trust

A trust is a legal arrangement where a person or entity (known as the “settlor” or “grantor”) transfers ownership of assets to another person or entity (known as the “trustee”) for the benefit of one or more individuals or organizations (known as the “beneficiaries”). The trustee holds and manages the assets on behalf of the beneficiaries according to the terms and conditions specified in a legal document called the trust deed or trust agreement.

Here are some key elements of a trust

  • Settlor/Grantor: The settlor or grantor is the person who establishes the trust and transfers their assets into the trust. The settlor defines the purpose of the trust, identifies the beneficiaries, and outlines the terms and conditions under which the trustee will manage the assets.

  • Trustee: The trustee is the person or entity responsible for managing the assets held in the trust. The trustee has a legal duty to act in the best interests of the beneficiaries and to administer the trust according to the terms specified in the trust deed.

  • Beneficiaries: The beneficiaries are the individuals or organizations who are entitled to benefit from the assets held in the trust. They may receive income generated by the trust assets, receive distributions of the trust assets, or benefit from specific provisions outlined in the trust deed.

  • Trust Property: The trust property refers to the assets or property that the settlor transfers into the trust. This can include various types of assets, such as money, real estate, investments, personal belongings, or intellectual property.

  • Trust Deed/Trust Agreement: The trust deed or trust agreement is a legal document that outlines the terms and conditions of the trust. It specifies the powers and responsibilities of the trustee, the rights and entitlements of the beneficiaries, and the purposes and objectives of the trust.

  • Trust Administration: The trustee is responsible for managing and administering the trust assets in accordance with the terms of the trust deed. This includes tasks such as asset management, investment decisions, record-keeping, tax compliance, and distribution of income or assets to the beneficiaries.

TYPES OF TRUST

PUBLIC TRUST

  •  A public trust, also known as a charitable trust or public charitable trust, is a type of trust that is established for charitable purposes and benefits the public or a specific segment of society. Public trusts are created with the intention of advancing causes related to education, healthcare, poverty alleviation, social welfare, promotion of the arts, or any other charitable objective.

Here are some key features of a public trust

  • Charitable Purpose: A public trust is established with the primary objective of benefiting the public or a specific charitable cause. This purpose should be for the greater good and should not primarily benefit specific individuals or private entities.

  • Trust Property: The trust property or assets are contributed by the settlor or donors who have a philanthropic intent. These assets can include money, property, investments, or any other form of assets that can be used to further the charitable objectives of the trust.

  • Trustees: Public trusts have trustees who are responsible for managing and administering the trust assets. The trustees have a fiduciary duty to act in the best interests of the trust and ensure that the charitable objectives are pursued effectively. They may be appointed by the settlor or chosen as per the trust deed or applicable laws.

  • Beneficiaries: The beneficiaries of a public trust are the public or the intended beneficiaries of the charitable activities carried out by the trust. The beneficiaries can be a specific group of people, a community, or the public at large.

  • Registration and Compliance: Public trusts typically need to be registered with the appropriate government authority or regulatory body to be recognized as a charitable organization. They must comply with the relevant laws, regulations, and reporting requirements, including maintaining proper financial records and submitting annual reports.

  • Tax Benefits: In many jurisdictions, public trusts may be eligible for tax exemptions or benefits. Donors to public trusts may be able to claim tax deductions for their contributions, and the trust itself may be exempt from certain taxes, such as income tax or property tax, as long as it meets the prescribed criteria.

PRIVATE TRUST

A private trust, also known as a family trust or living trust, is a legal arrangement in which assets are transferred to a trustee for the benefit of designated beneficiaries. Private trusts are created for various reasons, such as estate planning, asset protection, and wealth management.

key points to understand about private trusts

  • Settlor/Grantor: The settlor or grantor is the individual who establishes the trust and transfers assets into it. The settlor defines the terms of the trust and determines how the assets are to be managed and distributed.

  • Trustee: The trustee is a person or entity responsible for managing the trust assets and carrying out the instructions outlined by the settlor. The trustee has a fiduciary duty to act in the best interests of the beneficiaries.

  • Beneficiaries: Beneficiaries are individuals or entities designated by the settlor to receive the benefits or assets from the trust. They can include family members, dependents, or charitable organizations.

  • Trust Deed: A trust deed is a legal document that outlines the terms and conditions of the trust, including the identity of the settlor, trustee, beneficiaries, and specific instructions regarding the management and distribution of assets.

  • Privacy: Unlike a will, which becomes public upon probate, private trusts provide a level of privacy as their details are generally not disclosed publicly.

  • Flexibility: Private trusts offer flexibility in managing and distributing assets. The settlor can specify conditions for distribution, such as age restrictions, educational milestones, or specific purposes for which the assets should be used.

Revocable and Irrevocable Trusts

Private trusts can be either revocable or irrevocable. Revocable trusts allow the settlor to make changes or revoke the trust during their lifetime, while irrevocable trusts cannot be altered or revoked once established.

ELIGIBILTY

  • Settlor/Grantor: The settlor, also known as the grantor or creator, is the person who establishes the trust and transfers assets into it. Any individual or legal entity capable of entering into a contract can act as a settlor.

  • Trustees: Trustees are responsible for managing the trust’s assets and carrying out the instructions outlined by the settlor. Typically, individuals or corporate entities can serve as trustees. However, some jurisdictions may have specific regulations regarding who can act as a trustee, such as disqualifying certain individuals or entities with conflicts of interest.

  • Beneficiaries: Beneficiaries are the individuals or entities designated to receive benefits from the trust. Beneficiaries can include individuals, organizations, or even other trusts. The eligibility of beneficiaries can be defined by the settlor in the trust document.

ADVANTAGES

  • Asset Protection: Trusts can provide asset protection by separating the trust assets from the personal assets of the settlor and beneficiaries. This can safeguard the assets from creditors, lawsuits, or other potential risks.

  • Estate Planning: Trusts are commonly used in estate planning to facilitate the smooth transfer of assets to beneficiaries. They can help avoid probate, reduce estate taxes, and provide greater control over how and when the assets are distributed.

  • Privacy: Unlike wills, which become public upon probate, trusts offer a higher level of privacy. Trust documents generally remain private, allowing the settlor’s wishes and the trust’s details to remain confidential.

  • Flexibility in Asset Management: Trusts provide flexibility in managing and distributing assets. The settlor can establish specific instructions and conditions for the distribution of assets, such as age restrictions, educational milestones, or purposes for which the assets should be used.

  • Continuity of Assets: Trusts can ensure the continuity of asset management and protection even in the event of the settlor’s incapacity or death. This can provide stability and peace of mind for the beneficiaries.

  • Charitable Giving: Trusts can be utilized for charitable giving and philanthropic endeavors. Charitable trusts allow individuals to support causes they care about while enjoying certain tax benefits.

  • Avoidance of Probate: One of the significant advantages of trusts is the ability to avoid or minimize probate. Assets held in a trust generally do not go through the probate process, which can save time, costs, and potential disputes.

DOCUMENTS

Details of the Trustee

  • Name
  • Occupation
  • Address
  • Age
  • Designation
  • Contact Information
  • Photographs

Address Proof of the Trustee

  • Voter ID
  • Driving License
  • Passport

Proof of Office's Ownership

  • Electricity Bill
  • House Tax receipt
  • NOC from the landlord in case of rented property

Witnesses and Settlers

  • Two witnesses are required at the time of registration.
  • The settler should also be present at the time of registration.

PROCESS

  • Choose a unique name for the Trust – Your first task is to give a proper name to your Trust. The online registration of Trust is only possible if the name you choose for your Trust is reliable and as per the standards of the government of India.

  • To form a Trust, your name should not contravene the Emblems act

 The name should not violate the trademark act

The name you choose should be unique

Drafting the Trust Deed

Formulate the bylaws of your Trust and put them inside the trust deed.

  • Documentation – Gather the documents required for Trust Registration. Make sure all the documents are signed from the get-go.

  • Online Application filing – To form a trust online, the applicant must file an online application. Go to the official website of Trust Registration in your state and start filling out the application form.

  • Application Submission – Submit the online application for Trust Registration to the appropriate authority with the requisite documents.

  • Obtain the Trust Registration Certificate – It is not only the documents and registration that the society registrar assesses. It is also the purpose of your Trust. After the analysis, if the registrar deems you worthy, you will obtain the trust registration certificate.

Penalties for running an unregistered Trust in India

Civil and Criminal Penalties

  • Not following the rules mentioned in the trust deed is considered a contravention of the provisions of the Trust Registration Act. And thus, you will become liable for civil and criminal penalties.

Default in acquiring Tax Deduction Account Number

  • A Trust must obtain the Tax Deduction Account Number. Not doing so is considered a criminal offence per Section 27BB of the Indian Trust Act, 1882.

Default in filing Income Tax Returns

  • Not every Trust is considered to be a Non-Profit Organization. Unless the Trust has the registration under Section 12A of the income tax act, it cannot avail of tax benefits. It means that the Trust is required to furnish the tax returns on time. Not complying with the rules will cause issues for your company.

Why Auriga Accounting?

Auriga Accounting is a team of leading business professionals who are well-versed in the matters of Trust registration. In addition to answering several questions about what is Trust registration certificate and its rules and regulations, we will provide you with the following services

  • Document furnishing
  • Application filing
  • Department follow up
  • Aid in the removal of errors in the application form

We are India’s leading Trust registration consultant with a Delhi base. We can thoroughly assist you with trust registration in a minimum time.

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