All about Trust Registration
If you want to have a firm which can operate all over India and would benefit you, trust is probably one of the best forms of business for you. A trust is a structure in which the trustee’s carry out business on behalf of the beneficiaries. This kind of business is registered under the Indian Trust Act, 1882, and has become one of the major kinds of business in the present world. It is categorised into two types:
- Public Trust- This kind of trust is one in which the problems of the commons are discussed and is created for the benefit of the public. It can or cannot be a charitable trust.
- Private trust- This kind of trust is created for the benefit of an individual and not for the welfare of the people as a whole. This kind of trust benefits a particular institution or a group of institutions or beneficiaries.
Process of Trust Registration
For registering a trust, there should be at least a minimum of 2 trustees, but there is no upper limit specified. Keeping the fact in mind, these are the steps for a Trust registration.
- The first and foremost step is to draft a trust deed. A trust deed enlists the main objectives for which the trust is set up. It also defines the scope, beneficiaries and the powers of the trust.
- This trust deed is to be executed on appropriate judicial papers.
- Later after this, an appointment is set with the sub-registrar office for the jurisdiction of the deed and the government fees are paid.
- Then on the appointment day, the trustees along with 2 witnesses are to be presented to the sub-registrar.
- The next step is to get the PAN, TAN and a bank A/C in the name of the trust.
Benefits of trust registration
These below are the mentioned advantages of the Trust registration over the other forms.
- Trusts are varied flexible and complex, thus every kind has its own benefits
- There are various benefits in terms of taxes, such as entertainment tax, Service tax, etc.
- You can put conditions on your assets when you die for their distribution.
- You can have a successor trustee who in turn can manage your trust and the trust assets
- There is no need for publicity in the probate court almost charges 5-7% of your assets for distribution of assets amongst heirs.
- Your assets are more secured from creditors and lawsuits.
- The private trust can help one to have the financial benefit while the public trusts could help in benefitting the public.