Registration Process of Public Charitable Trust

The Indian Trust act defines creating a Trust as “A trust is created when the author of the trust indicates with
reasonable certainty by any words or acts:
(a) an intention on his part to create thereby a trust,
(b) the purpose of the trust,
(c) the beneficiary, and
(d) the trust-property, and (unless the trust is declared by will or the author of the trust is himself to be the
trustee) transferred the trust-property to the trustee”. A Public Charitable Trust has to be registered with the
office of the Charity Commissioner who has jurisdiction over the trust. To register your trust, you need to
follow the steps described below:

Step 1: Choose an appropriate name for your Trust. This is the basic step in registering your Trust. While
choosing name take care that the proposed name should not suggest any kind of patronage by the
government of India or any State government. It should not be under the restricted list of names as per the
provisions of Emblems and Names Act, 1950. However, there is no restriction in using names that are
already registered as a Trust in the Registrar office. In case the registrar at the Registrar office refuses to
register your Trust under a given name in spite of it not violating any of the above mentioned rules, you can
always file a complaint with the higher authorities and appropriate action would be taken.

Step 2: Determine the Settler/ Author and Trustees of the intended Trust. In case of the number of Settlers/
Authors there is no clearly defined rule. It is subject to the decision of the Sub-Registrar at the Registrar
Office. However, in most cases traditionally there is one Settler or Author. Minimum two Trustees are
necessary and there is no limit on the Maximum number. Settler/ Author generally are not Trustees. It
depends upon the choice, will and understanding of other Trustees. There is no Educational qualification
needed to become a Trustee. Even an illiterate person can become a Trustee. Minimum age to become a
Trustee is 18 years in case of female and 19 years in case of female. However, sometimes average of both
the minimum ages, that is, 19.5 years is considered in general. A Trustee must be a resident of Republic of
India. Foreigners, OCI card holders and NRIs residing abroad for more than six months cannot become
member of a Trust.

Step 3: Prepare a Memorandum of Association and Rules & Regulations of your Trust. This is known as
Trust deed and is extremely essential as the legal evidence of your Trust’s existence. The Trust Deed
contains various Clauses. These are:

 Name Clause
 Settler and Trustee Clause
 Registered Office Clause
 Object Clause and Beneficiaries
 General Body Member Clause

A table containing names, address and occupation of all the Members along with their signatures should be
formulated under the memorandum of association.
Rules and Regulations section includes the following Clauses:

 Membership Clause
 Subscription Clause
 Meeting Clause
 Committee/ Governing Body Clause
 Auditor
 Legal Procedures like appointment, removal or replacement of a trustee, their rights, duties and
powers, etc.
 Property that shall devolve upon the trustee(s) under the trust for the benefit of the beneficiaries
Note: According to section 21 of the Indian Registration Act, 1908 a deed of trust relating to
 immovable property must, for the purposes of registration, contain a description of the property
sufficient to identify it.
 An intention to divest the trust property upon the trustee(s)

Note: The intention must be expressed in clear, simple language and with certainty.

Bylaws of the Trust

Mention each and every rule applicable to the Trust point wise. This includes sections of Income Tax act
applicable, Indian Trust act and other laws applicable to run manage and implement the working of the
Trust. Clearly mention all the procedures and conditions that should be followed to open and operate a bank
account. These bylaws are included in the Trust deed. Proper procedures regarding changes, removal or
addition of trustees must be established. Without inclusion of bylaws, the trust deed is incomplete and
useless. This is why it is recommended to hire professionals who are experienced in preparing Trust deeds.
Without a proper trust deed, you might face issues in future like proving your trust’s legibility.

Step 4: Prepare all the documents that will be required at the time of submission. There is a Trust deed that
is required. Trusts are irrevocable unless it is mentioned in the trust deed. This means that the trust cannot be
wound up.

A. The elements of that Trust deed which should be present in it are:

 Name and address of the Settler/ Author of the Trust.

 Names and addresses of the other trustees.
 Name of the trust.
 Minimum and maximum number of trustees. Minimum number is two while there is no limit for
Maximum. But you must determine the maximum number your Trust can have. All the trustees
together collectively govern the trust and are called Board of Trustees.
 Address of the registered office of the trust.
 Purpose behind formation of the Trust.
 Objectives of the trust.
 Rules and Regulations of the trust.
 Information about the intended Bank account: which bank and branch you shall open a bank account
with.
 Tenure of the Trustees must be specified in the deed. It is not necessary to involve Electoral process
in the appointment of trustees.
 Board of Trustees can also have various designations for trustees like Chairperson and Managing
Trustee.
 Determine these posts and the responsibilities of each of these in the Trust deed.
 Though Trustees cannot draw any remuneration from the trust fund but they are eligible to receive
compensation for the professional services they provide to the Trust. Determine this in the Trust
deed.
 Date of execution of the Trust Deed.
 Details of the Trust Fund thus set up by the Settler and the movable immovable property included in
the Trust Fund. Also contains information about the sources and activities through which income
shall be earned and deposited in the Trust fund.
 Ways and plan in which the income shall be dispersed among beneficiaries or used in executing
programs/ projects for their welfare.
 Rights, duties and limitations of the Trustees.
 Number of meetings to be organized each year and conditions regarding number of meetings
mandatory for the Trustees to attend.
 Procedures to vary, alter or modify any clause in the Trust Deed.
 Conditions under which a Trustee shall cease to exist.
B. The Trust Deed shall be prepared on a stamp paper whose value should be of certain percentage of the
total value of Trust’s property. This percentage varies from state to state, for example, in Delhi this value is
8%.
Remember: Consent of all members is necessary whether verbal or written. Laws regarding the physical
presence of trustees are different for different states. However, physical presence of settler is compulsory
everywhere in India. In some states instead of physical presence of the Trustees, their original photo Ids and
self-attested photocopy is sufficient. At the time of registration, only the Settler and two witnesses are
required to be present in front of the Sub-registrar under whose jurisdiction the registered office address
comes. Sub-registrar will check IDs of these people. After that the Trust Deed will go to the counter where
data entry takes place. In the end, Settler and two witnesses will be photographed. You will need to pay a fee
of Rs. 1100 for this process. Of this amount, Rs. 100 will be the registration fee and Rs. 1000 will be the
charges of keeping a copy of the Trust Deed with the sub-registrar.
After about one week of submitting the papers, you can go back to the registrar’s office to receive a certified
copy of the Trust Deed.

C. To register the Trust Deed with the Local Registrar under the Indian Trusts Act there are certain
requirements. These are:

 Trust Deed on stamp paper of requisite value (as stated above)

 Two passport size photograph & self-attested copy of the proof of identity of the settler
 Two passport size photograph & self-attested copy of the proof of identity of each trustee
Note: two photos are necessary as one will be pasted on the Trust deed while the other is pasted on
the registry detail that is stored in the records. Aadhar card as identity proof is preferred however, it
is not mandatory. Though the Supreme Court ruling has stated clearly that Aadhar card must not be
made compulsory but some Registrars do not comply. They might pose obstacle if Aadhar card is not
provided with the documents. Voter ID, Passport, any other such photo ID card with address
mentioned on it is applicable till further notification. Driving License as identity proof is acceptable
at some places while some do not consider it. All these conditions differ from state to state, for
example, in Haryana Aadhar card is necessary and out of the two witness one must be a registered
lawyer. Two witnesses are necessary throughout India. These witnesses identify the trustees and the
settler. One passport size photograph (varies from state to state. Some require photo some don’t) &
copy of the proof of identity of each of the two witnesses is needed.
 Signature of settler on all the pages of the Trust Deed.
 Some states like Rajasthan, Madhya Pradesh have made Pan Card mandatory. While in others if the
amount of Trust property/ a part of it is more than Rs 20,000 then Pan Card is compulsory.
 Proof of the registered office address of the Trust must be attached with the Trust deed. This can be
electricity bill, water bill, registration certificate. You might have to submit a non-objection letter
signed by the land owner with his identity proof. Generally, the Trust is registered at the Registrar
office of the state/ area under whose jurisdiction the official address of the Trust comes. However,
please note that the office address of the Trust is not counted among the Trust’s property. Office
address can be of any place in India, though there are few restrictions at some places. For example,
in case of Delhi the registered office premises must be in legally authorized / registered residential or
commercial places. Industrial buildings, farm houses and agricultural land cannot be used as office
address. The office address must be registered with the local sub-registrar. Unauthorized addresses
cannot be used. There are no clear rules about the office address in the Indian Trust Act or the
Registration Act. The parameters regarding this are left to the judgment of the sub- registrar and the
prevalent norms in the particular state. If you being given an extremely difficult time by the sub-
registrar, you can definitely challenge this legally in court. Settler or Trustees can add more than one
address as the Trust’s office address. This address shall be added as additional administrative office
in case they wish to open another branch of their Trust. This can be used while opening a bank
account or opening more branches in future.
 You must mention the property registered in your Trust’s name and attach its proof with the
documents you shall submit at the time of registration. Value of the Trust’s property must be
mentioned in the Trust Deed. This property can be any movable or immovable asset. Under
immovable asset comes the land, building or plot while movables ones consist of cash amount.
 Movable property has no maximum or minimum ceiling. It is not compulsory that you have to
include immovable property in the Trust deed. If your Trust has some property mention it with its
value and if not do not fret. It is okay to register a Trust that doesn’t have its own property.
Note: two photos are necessary as one will be pasted on the Trust deed while the other is pasted on
the registry detail that is stored in the records. Aadhar card as identity proof is preferred however, it
is not mandatory. Though the Supreme Court ruling has stated clearly that Aadhar card must not be
made compulsory but some Registrars do not comply. They might pose obstacle if Aadhar card is not
provided with the documents. Voter ID, Passport, any other such photo ID card with address
mentioned on it is applicable till further notification. Driving License as identity proof is acceptable
at some places while some do not consider it. All these conditions differ from state to state, for
example, in Haryana Aadhar card is necessary and out of the two witness one must be a registered
lawyer. Two witnesses are necessary throughout India. These witnesses identify the trustees and the
settler. One passport size photograph (varies from state to state. Some require photo some don’t) &
copy of the proof of identity of each of the two witnesses is needed.
 Trust Deed on stamp paper of requisite value (as stated above)
o Two passport size photograph & self-attested copy of the proof of identity of the settler
o Two passport size photograph & self-attested copy of the proof of identity of each trustee
 Signature of settler on all the pages of the Trust Deed

1.
o Some states like Rajasthan, Madhya Pradesh have made Pan Card mandatory. While in others
if the amount of
o Trust property/ a part of it is more than Rs 20,000 then Pan Card is compulsory.
o Proof of the registered office address of the Trust must be attached with the Trust deed. This
can be electricity bill, water bill, registration certificate. You might have to submit a non-
objection letter signed by the land owner with his identity proof. Generally, the Trust is
registered at the Registrar office of the state/ area under whose jurisdiction the official
address of the Trust comes. However, please note that the office address of the Trust is not
counted among the Trust’s property. Office address can be of any place in India, though there
are few restrictions at some places. For example, in case of Delhi the registered office
premises must be in legally authorized / registered residential or commercial places.
Industrial buildings, farm houses and agricultural land cannot be used as office address. The
office address must be registered with the local sub-registrar. Unauthorized addresses cannot
be used. There are no clear rules about the office address in the Indian Trust Act or the
Registration Act. The parameters regarding this are left to the judgment of the sub- registrar
and the prevalent norms in the particular state. If you being given an extremely difficult time
by the sub-registrar, you can definitely challenge this legally in court. Settler or Trustees can
add more than one address as the Trust’s office address. This address shall be added as
additional administrative office in case they wish to open another branch of their Trust. This
can be used while opening a bank account or opening more branches in future.
o You must mention the property registered in your Trust’s name and attach its proof with the
documents you shall submit at the time of registration. Value of the Trust’s property must be
mentioned in the Trust Deed. This property can be any movable or immovable asset. Under
immovable asset comes the land, building or plot while movables ones consist of cash
amount. Movable property has no maximum or minimum ceiling. It is not compulsory that
you have to include immovable property in the Trust deed. If your Trust has some property
mention it with its value and if not do not fret. It is okay to register a Trust that doesn’t have
its own property. To register the Trust Deed with the Local Registrar under the Indian Trusts
Act there are certain requirements. These are:
 Trust Deed on stamp paper of requisite value (as stated above)
 Two passport size photograph & self-attested copy of the proof of identity of the
settler
 Two passport size photograph & self-attested copy of the proof of identity of each
trustee
Note: two photos are necessary as one will be pasted on the Trust deed while the other
 is pasted on the registry detail that is stored in the records. Aadhar card as identity
proof is preferred however, it is not mandatory. Though the Supreme Court ruling has
stated clearly that Aadhar card must not be made compulsory but some Registrars do
not comply. They might pose obstacle if Aadhar card is not provided with the
documents. Voter ID, Passport, any other such photo ID card with address mentioned
on it is applicable till further notification. Driving License as identity proof is
acceptable at some places while some do not consider it. All these conditions differ
from state to state, for example, in Haryana Aadhar card is necessary and out of the
two witness one must be a registered lawyer. Two witnesses are necessary throughout
India. These witnesses identify the trustees and the settler. One passport size
photograph (varies from state to state. Some require photo some don’t) & copy of the
proof of identity of each of the two witnesses is needed.

D. The government registration fee applicable to register the Trust is valued according to Revenue Tax rules
in certain states. It is calculated at the time of the registration only; hence it cannot be determined
beforehand. There is a minimum amount of the applicable fee that has to be paid, via a demand draft, online
demand draft or stamp paper of that particular value, at the time of submission of documents. Rest of the
applicable fee can be paid later at the registrar office or to authorized associate revenue agency after the full
value has been calculated. Remember, the fee varies from state to state.

E. The Trust deed should contain aims and objectives of the Trust pertaining to social welfare, child welfare,
human development, environmental protection and old age homes etc. If you have a specific objective
behind formation of your Trust you can include that specific objective as primary objective of the Trust
along with other general social welfare objectives. Most objectives are co-related to each other. Consultants
usually include specific objectives with the objectives required by the government bodies/ ministries. You
can even work on one objective out of the ones you have mentioned in the Trust deed.
F. Working area or area of operation is mentioned in the Trust Deed. Usually a Trust registered anywhere in
India has a national status. However, due to the absence of clearly defined laws in this case has led to
bureaucratic confusions and different registrars have their own parameters regarding this. An organization
registered as Delhi is always considered as a National organization. It is left up to the founder’s will
regarding where they want to register their Trust. There isn’t any issue in receiving funding or projects from
the government department of any state or central Ministry regarding this.

Step 5: Submit the Trust Deed, along with properly attested photocopies with the local registrar. Photocopy
of the Trust Deed must be signed by the settler on every page. At the time of registration, the settler & two
witnesses must be physically present along with their identity proofs (original as well as self-attested photo
copy). However, there is a dispute regarding the presence of Trustees. Some states make it necessary for the
Trustees to be physically present while with some states their written consent along with their identity proofs
(original as well as self-attested photo copy) is sufficient.

Step 6: The Registrar will retain the photocopy & return the original registered copy of the Trust Deed.

Step 7: After submitting all the required documents and completing all formalities it takes a minimum of 7
working days to obtain registration certificate. Though it isn’t mentioned in any of the rules but certain
registrars might want to verify the registered office address by sending an official letter at that place for
verification.