Registration of trust

This query is : Resolved

Report Abuse Follow Query Ask a Query

amitsingh

amitsingh (Querist)
Follow

06 December 2011 i want to form a trust , so please send me a details how to form the trust in details

Jagga Rao Malipeddi

Jagga Rao Malipeddi (Expert)
Follow

08 December 2011 Registering and Managing Voluntary Organisations
Since time immemorial, India has an ancient and rich tradition of philanthropy. There are virtually
hundreds of thousands of charitable organizations (registered and unregistered) operating all
over India. In Maharashtra alone, there are over four lakh charitable organizations registered with
the office of the Charity Commissioner.
"Charity" being a State subject allows different states in India have separate Acts to govern and
regulate charitable organizations. For example, all public charitable trusts in the state of
Maharashtra are governed by the Bombay Public Trusts Act, 1950. The same Act, with minor
changes, is also operational in the state of Gujarat. Rajasthan, too, has a trusts Act of 1959, while
Madhya Pradesh has an Act of 1951. In certain southern states like Andhra Pradesh, there are
endowment Acts, while a number of northern and north-eastern states in India have no trust Act
at all. Even the capital of India- New Delhi-has no trust Act.
The Societies Registration Act, 1860, however, is an All-India Act, with each state adopting
certain modifications.
What is the difference between a Trust and a Society
Trust: A trust can be established by two or more individuals and registered under the Trusts Act
of the State. The main instrument of trust is the trust deed which is executed on non-judicial
stamp paper. Trustees generally hold office for life, unless otherwise provided in the trust deed.
New trustees are generally appointed by invitation by the surviving trustees. The minimum and
maximum number of trustees should be specified in the trust deed. A trust is generally
irrevocable.
Society: A society, on the other hand, can be established by seven or more individuals and
registered under the Societies Registration Act, 1860. In Maharashtra and Gujarat, all societies
must also simultaneously be registered as trusts under the Bombay Public Trusts Act, 1950. The
main instrument of a society is the memorandum and articles of association which need not be
executed on stamp paper.
Members of the managing committee/governing body generally hold office for a certain period of
time and may stand for re-election, if necessary.
A society may also be wound up if three-fifths of the members of the general body of the society
so desire.
A society, in other words, is a more flexible and democratic set-up.
A charitable organization may also be registered as a section 25 company under the Indian
Companies Act, 1956 by seven or more individuals.
Whether a trust, society or a section 25 company, the Income Tax Act gives all three categories
equal treatment, in terms of exempting their income u/s 11 and 12 and granting 80G certificate.
How to Register a Charitable Organisation?
In India you can register an NGO in 3 ways:
1. As a society under societies act
For national level society you need at least 7 persons from seven different states. It can
be registered at New Delhi OR For state level society/NGO there are some certain rules
and state society acts.
2. As a Non-profit company under section of 25 of Companies Act.
3. As a Public Trust.
For registration of public trust there are some different acts and procedures.
You must be specific, what is your aim to form an NGO and the area of operation and the state
you live in.
Place of Registration
The registration of a society is to be done under the Act wherever obtaining the registration and
not in the State where the benefit is claimed. Once the person proposing to form a society has
decided upon the name of the society and has prepared drafts of Memorandum and Rules and
Regulations of the society, procedure adopted in following paragraphs may be adopted for getting
the society registered.
Signing of Memorandum of Association
All the subscribers (minimum seven) should sign each page of the memorandum and the
signatures should be witnessed by either an Oath Commissioner, Notary Public (Rs. 3/- Notarial
stamp duty affixed), Gazetted Officer, Advocate, Chartered Accountant or 1st Class Magistrate
with their rubber / official stamp and complete address.
Persons desirous of forming a society should also become members of the first governing body.
An outsider cannot become member of the governing body in the first instance.
Signature on Rules and Regulations
The Rules should be signed by atleast three members of the governing body. Following certificate
should be given at the end of the rules and regulations: ""Certified that this is the correct copy of
rules and regulations of the Society"".
File the required documents with the Registrar of Societies
Following papers should be filed with the Registrar of Societies for registration of a society under
the principal Act or corresponding Acts enacted by various State Governments:
Covering letter requesting for registration stating in the body of letter various documents
annexed to it. It should be signed by all the subscribers to the memorandum or by a
person authorised by all of them to sign on their behalf
Memorandum of Association in duplicate along with a certified copy (as per Sec. 3 of the
Principal Act). It should be neatly typed and pages serially numbered
Rules and Regulations / Bye-laws in duplicate duly signed
Affidavit on non-judicial stamp paper of appropriate value sworn by the President or
Secretary of the Society stating relationship between the subscribers. The affidavit should
be attested by an Oath Commissioner, Notary Public (Rs 3 Notarial Stamp affixed) or Ist
Class Magistrate.
Documentary proof such as House Tax receipt, rent receipt in respect of premises shown
as Registered Office of the society or no objection certificate from the owner of the
premises
Registration Fee
Normally fee of Rs 50/- is payable as registration fee of a society and it should
accompany the request for registration payable in cash or by Demand Draft. In
Union Territory of Delhi the Registrar intimates the applicant society by a letter
stating that all the formalities have been completed and the documents filed are
acceptable. The applicant society is required to deposit the registration fee after
receipt of this letter. Formalities of registration and requirement of documents etc.
may differ slightly from State to State. The applicants may, therefore, contact in
advance the Registrar of Societies having jurisdiction.
Registration Certificate
On receiving the documents mentioned above the Registrar shall satisfy himself about the
compliance of the provisions of the Act and correctness in his hand that the society is registered
under the Principal Act 1860 or other corresponding Acts.
Presumption of Registration
Presumption that the society was duly registered under the Act arises not on the Certificate of
Registration granted by the Registrar but on the copies of the Rules and Regulations and
Memorandum certified under Sec. 19 which constitutes them prima facie evidence of the matters
therein contained.
Why register as an NGO?
Registration of a charitable organization has several advantages. It adds to the general credibility
and reliability of the organization and aids in formalisin a corporate identity.
Complexity in Registration
Unfortunately, there is complexity and bureaucracy around this process and charitable
organizations often feel burdened and stifled by the various legislation and authorities governing
them.
 At the state level, it is the Charity Commissioner of the Registrar of Societies which
registers a charity
 At the federal level, it is the Income Tax Act which has the authority to register a charity
 If the organization receives foreign contribution, the Home Ministry also begins to
exercise its jurisdiction.
Also, the various Trusts Act and the Societies Registration Act have, to an extent, become
dated. For example, the Societies Registration Act is even older than the Indian National
Congress and has been a product of the historic Revolt of 1857. Both the Acts are not
designed to cover the wide and varied activities of modern developmental organizations.

Message likes : 1 times