A Trust is the obligation or responsibility placed on one in whom confidence or authority is place; it is a confidence reposed in a person by conveying to him the legal title to property which he is to hold for the benefit of others. Therefore, the a€?Trusteea€? responsibility includes protection of rightful ownership in the Trust property, the preservation of the Trust property and channelizing the income from the Trust property in accordance with the intentions of the creator of the Trust. In this article, we look at the procedure for forming a Charitable Trust in India.

The Indian Trusts Act, 1882 defines a Trust as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner.The person who reposes or declares the confidence is called the a€?Author of the Trusta€?.The person who accepts the confidence is called the a€?Trusteea€?.The person for whose benefit the confidence is accepted is called the a€?Beneficiarya€?.The subject-matter of the trust is called a€?Trust Propertya€? or a€?Trust Moneya€?.The instrument if any, by which the Trust is declared is called the instrument of Trust or Trust Deed.

Charitable Trusts are formed in India for one or more of the following reasons:

a€￠ Discharge of the Charitable an/or religious sentiments of the Author, in a way that ensures public benefit.
a€￠ For claiming exemption from Income Tax, as the case may be, in respect of incomes applied to charitable or religious purposes.
a€￠ For the welfare of the members of the family and/or other relatives, who are dependent on the settlor of the Trust
a€￠ For the proper management and preservation of property.
a€￠ For regulating the affairs of a provident fund, superannuation fund or gratuity fund or any other fund constituted by a person for the welfare of its employees.

For creating a private Trust, the foremost requirement is that the Author must express with reasonable certainty by words or acts, an intention on his part to create a Trust. Thus, a Trust may be declared either by words, spoken or written or by acts. Where a Trust is declared by words, the language used must be clear enough to show an intention to create a Trust. No formal language is required to constitute an effective declaration of Trust, but the language used must make it certain that the Author intended to constitute a Trust binding in law on himself or the person to whom the property was given, the Author intended to bind definite property by the Trust and the Author intended to benefit a definite person or persons in a definite way.

A society is an association of persons united together by mutual consent to deliberate, determine and act jointly for some common purpose. Societies are usually registered for promotion of charitable activities like education, art, religion, culture, music, sports, etc., In India, The Societies Registration Act, 1860 lays down the procedure for society registration and operation in India. In this article, we look at the process for society registration in India:

A Society can be formed for the promotion of literature, science or fine arts or the diffusion of useful knowledge or political education or for charitable purposes. As per Section 20 of the Societies Act, 1860, a Society can be registered for the following purposes:

a€￠ Grant of charitable assistance.
a€￠ Creation of Military Orphan funds.
a€￠ Promotion of Science.
a€￠ Promotion of Literature.
a€￠ Promotion of Fine Arts.
a€￠ Promotion or Instruction or Diffusion of useful Knowledge.
a€￠ Diffusion of Political Education.
a€￠ Foundation or maintenance of libraries or reading rooms.
a€￠ Foundation or maintenance of Public Museum or Galleries.

In addition to the above purposes specified by the Societies Act, 1860, a Society can also be registered for other purposes based on the amendment that has been enacted to the Societies Act, 1860 by the concerned State Government.

Society Registration in India

A Society can be formed by a minimum of seven or more persons. Besides persons from India, foreigners, companies and other registered societies can subscribe to the Memorandum of a society. Like Partnership Firms, Societies can also be registered or unregistered. However, only registered Societies can hold vested properties and/or have a suit filed by or against the Society.

Society registration is managed by State Governments. Therefore, the application for registration of society must be made to the concerned authority in the State, in which the registered office of the Society will be situated.

To register a Society, the founding members must first agree on a name for the Society and prepare the Memorandum and Rules and Regulations of the Society.

Society Registration a€“ Name Selection

While choosing a name for the society, it is important to remember that as per Societies Act, 1860, similar or identical name of an existing registered society is not permitted. Further the proposed name for the society must also not suggest patronage of the Government of India or any State Government or attract the provisions of Emblem and Names Act, 1950.

Memorandum of a Society

The Memorandum of the Society and the Rules and Regulations of the Society must then be signed by each of the founding members, witnessed by an Oath Commissioner, Notary Public, Gazetted Officer, Advocate, Chartered Accountant or Magistrate 1st Class with their official stamp and complete address. The following documents must be prepared, signed and submitted for Society Registration:
a€￠ Covering letter requesting registration of the Society, signed by all founding members.
a€￠ Memorandum of Association of the Society in duplicate along with a certified copy.
a€￠ Rules and Regulations of the Society in duplicate along with a duplicate, duly signed by the founding members.
a€￠ Affidavit sworn by the President or Secretary of the Society stating relationship between the subscribers.
a€￠ Address proof for the registered office of the Society and No-Objection Certificate from the Landlord.
a€￠ The signed Memorandum and Rules and Regulations must then be filed with the concerned Registrar of Societies in the State with the prescribed fee. If the Registrar is satisfied with application for Society Registration, the Registrar would certify to deem the Society to be registered.
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