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Society/Trust Registration

 

A organization requires many individuals united to decide, regulate and behave in a shared way for other collective reasons by mutual agreement. Societies are generally licensed to support charity, such as athletics, music, literature, faith, fashion, education, etc.
The Society Registration Act, India, offers detailed guidelines for the registration and service of a corporation. The legislation was introduced to expand the legal standards of the registration of society to encourage literature, fine art, research or awareness-raising for a broad variety of purposes. Several governments without or with any more changes also adopted the Business Registration Act 1860.

There are two types of society, one is for National Level Society , and another one is State Level Society. Minimum of seven people must come together with a common purpose of being formed into society. However in the case of national level society, the members / desirous person must represent seven different states. The process of registering NGO as society differs from state to state. We shall extend our assistance in drafting, filing and follow up with the registrar of societies until its registration.
A trust can be created by execution of a trust deed; there are two types of trust. A public trust (charitable trust) is created for the benefit of the general public whereas a private trust is created for the benefit of a particular group of individuals known as the beneficiary.
The first step to register a trust starts with the drafting of a trust deed. The trust deed is to be executed on appropriate non-judicial stamp paper, the rate of stamp duty differs from state to state. The next step is to seek an appointment with the sub-registrar office having jurisdiction based on the registered office of the trust, and the government registration fee is to be paid after that.

 


Documents Requirements for Society Registration



Characteristics of Trust


  1. Vulnerability/Risk: There must be an element of vulnerability or risk in order for trust to exist, whether it be a situation that a client finds themselves in (such as divorce or inheritance) or a lack of knowledge
  2. Honesty: When clients were asked to explain what trust meant, they often referred to honesty with financial information provided and honesty with fees and commissions earned by the planner.
  3. . Faith : A client must have confidence, or faith that their financial planner can be relied upon to provide the right advice.
  4. Best interests: Clients trust their planner when they perceive that the planner acts in the client’s best interests
  5. . Accountability: Clients trust planners if they believe their planners are accountable to their employer, regulatory authority and professional body
  6. Competence: Clients who trust their planner rated the behavioural competencies of their planner more highly than those who did not trust their planner

Benefits of Trust

  1. Asset Protection: Trusts can be one of the most effective ways of protecting assets. In simple terms, assets transferred to a trust no longer form part of the Settlor’s property, so the trust assets cannot be seized if a Settlor gets into financial difficulties.
  2. Tax Planning : Assets transferred into trust are no longer considered as belonging to the Settlor, so the income and capital gains generated by those assets are taxed according to the rules governing the legal owner – the Trustee
  3. Confidentiality: The only other legal form of transfer is via a trust and this would generally save estate duty and keep the trust assets confidential.
  4. Estate Planning: A trust is probably the most satisfactory and flexible way of making arrangements of this kind.
  5. Protecting the Weak : A trust provides a vehicle by which a person can provide for those who may be unable to manage their own affairs such as infant children, the aged, the disabled or persons suffering from illness.
  6. financial difficulties.
  7. Tax Planning : Assets transferred into trust are no longer considered as belonging to the Settlor, so the income and capital gains generated by those assets are taxed according to the rules governing the legal owner – the Trustee

Registration Process for Public Charitable Trust


  1. Step1 : Selection of Name This is the first step in registering the Trust. Additionally, the name so suggested should not come under the restricted list of names as per the provisions of the Emblems and Names Act, 1950.
  2. Step 2 : Decide the Settlers or Authors and Trustees of the Trust There is no defined provision with regards to the number of settlers/authors. However, in most of the cases there is typically one author. Further, there is no limit on the maximum number of trustees. But a minimum of two trustees are necessary to form a Trust. Also, the author generally cannot be the trustee. And he needs to be a resident of India.
  3. Step 3 : Documents Required to be Submitted at the Time of Registration
    • Trust Deed
    • Self attested copy of the proof of identity of the settler (Aadhaar card, passport, voter ID, driving license or any such photo ID)
    • Self attested copy of the proof of identity of each trustee (Aadhaar card, passport, voter ID, driving license or any such photo ID)
    • PAN card
    • Proof of the registered office address of the Trust (electricity/water bill or registration certificate)
    • Non Objection letter signed by the landowner.
  4. Step 4: Prepare Trust Deed on a Stamp Paper As a Trust, you need to prepare the Trust Deed on stamp paper. The value of this stamp paper is of a certain percentage of the total value of the Trust’s property. Further, this percentage varies from state to state. In addition to this, you need to pay a fee of Rs. 1100. Out of this amount Rs. 100 is the registration fee and Rs. 1000 are the charges of keeping a copy of the Trust Deed with a sub – registrar. Once you submit the papers, you can collect a certified copy of the Trust Deed within one week’s time from the registrar’s office.
  5. Step 5: Submit the Trust Deed with The Registrar After receiving a certified copy of the Trust Deed, submit the same along with properly attested photocopies with the local registrar. Further, the settler must put his signatures on every page of the photocopy of the Trust Deed. Also, it is mandatory for the settlers as well as two other witnesses to be physically present along with their identity proof (original as well as self attested photocopy) at the time of registration. However, physical presence of Trustees is debatable.
  6. Step 6: Obtain the Registration Certificate After submitting the Trust Deed with the registrar, the registrar retains the photocopy and returns the original registered copy of the Trust Deed. Then, after completing all the formalities registration certificate is issued within a minimum of seven working days.



OBTAINING 12A and 80G Certificates


  1. A Trust or an NGO can acquire 12A certificate from the Income Tax Department. Thus, a Trust acquiring such a certificate is exempted to pay income tax for the entire lifetime on its surplus income.
  2. Also, an NGO must obtain 80G certificate. This certificate allows donors, that is persons or organizations making donations to an 80G certified NGO, to avail deduction. Thus, such a deduction is given to the donors under section 80G of the Income Tax Act.

Classification of Trust:


Public Trust Private Trust
It is a trust whose beneficiaries include the public at large. Further, a Public Trust can be further subdivided into Public Charitable Trust and Public Religious Trust A private Trust is the one whose beneficiaries include families or individuals. Further, a Private Trust can be subdivided into:
Private Trusts whose beneficiaries and their requisite shares both can be determined
The Private Trusts whose both or either the beneficiaries and their requisite shares cannot be determined