How Many Types of Trust Registration?

Trusts in India can be divided into three types:

  • The public’s trust
  • The private trust
  • Public-private partnership

A private trust operates in accordance with the Indian Trusts Act, 1882, while a public trust falls into the categories of religious trusts and charitable trusts. In India, public trusts are enforced by the Religious Endowments Act of 1863, the Charitable and Religious Trust Act of 1920, and the Bombay Public Trust Act of 1950, among others.

The Private Trust

It is a legal arrangement created to benefit individuals other than a public or charitable purpose. Private trusts are formed for the financial benefit of one or more beneficiaries known to the Trustor. They serve no charitable purpose and offer benefits to designated beneficiaries only. The Indian Trusts Act, 1882 stipulates that these trusts must follow the provisions of the act.

The Public’s Trust

Public trusts serve a charitable or religious purpose and are not governed by the Indian Trusts Act. They are essentially beneficial to the whole public. These trusts follow the general law at the moment. They are also able to be established inter vivos by will, just as private trusts are.

Combined public-private trusts

The Public-Cum-Private Trusts serve a dual purpose. Their income can be utilized for public as well as private purposes. This implies they can have either public or private beneficiaries.

India’s Step-by-Step Procedure for Registering a Trust

Trust registration involves the following steps:

First, choose a name for your trust

When it comes to registering a Trust, the first step is to select a name for the trust. Be mindful when making such a choice, and take the following points into account to avoid any complications:

  • Emblems and Names Act, 1950 should be followed when selecting a name
  • When it comes to the Trademark Act, there should be no violation at all.
  • Names should stay true to their originality.

As the second step, a trust deed needs to be drafted

Creating a Trust deed registration is important because it is the only thing that makes the Trust legally enforceable.

Generally, trust deeds contain the following clauses:


A trust’s object is reflected in its Object clause

Amounts accepted

Any person, government agency, or charitable organization may contribute, donate & subscribe to, in cash or immovable assets without any charge on them, under this clause. Further, the clause states that contributions that hinder the Trust’s objective are not acceptable.

A trust’s investment clause specifies the conditions under which the fund will be administered lawfully and effectively. The clause also laid out the conditions for distributing additional funds that were not used effectively in order to generate additional income.

Trustee power

This specific clause discusses the responsibilities of trustees, as its name implies.

The trustees are generally granted the following powers under such clauses.

  • Recruiting and hiring employees
  • The trust properties are alienated
  • Establishing the Trust’s bank account
  • The Trust may use defaulters in the event of a legal dispute
  • It is acceptable to accept a gift or donation from a legitimate individual or source
  • Investing in securities with additional funding

Accounting and auditing

As a result of this clause, the trustees must maintain the book of accounts regularly, and the certified public accountant must conduct an audit of the accounting records.

The end is near

As soon as the trust’s assets/properties are lawfully distributed to its beneficiaries or a similar entity, either directly or through resettlement, it is deemed to have been wound up. During the winding up of the Trust, all parties involved must identify any tax obligations incurred as a result of the transfer of assets. In addition, to mitigate the chances of a legal dispute, this clause requires that such a legal undertaking be conducted with the approval of a charity commissioner, court, or any other law.

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