The non-profit organizations in India can be registered either as:
- Trusts or
- Societies or
- Private Ltd. Company under section 8 of the Company’s Act.
These organizations work for corporations at giant and undertake public welfare activities with a charitable purpose. Such functions could embody social contribution within the number of educations, medical facilities or enterprise activities of public-service corporations that promote public welfare.
Thus, the foremost preferred way to run an NGO or a non – profit organization is to make a Public charitable trust. A Trust is often a non-public or charitable trust relying upon the category of individuals that receive benefits. Transferring the property to the beneficiary is the main intent of running a Trust.
What is a Trust?
As per the Indian Trust Act 1882, a Trust is a rendezvous where the owner (trustor) transfers the property to somebody else (trustee) for the advantage of a 3rd person (beneficiary) says a Tax Consultant in Chennai. Such a property is transferred by the trustor to the trustee alongside a proclamation that the trustee ought to hold the property for the beneficiaries of the Trust. Phoenix tax offers a wide range of services under trust registration in Tambaram, Chennai with complete guidance for a successful registration.
Thus, Trusts are often classified into 2 categories:
- Public Trust
It is a trust whose beneficiaries embody the general public at giant. Further, a charitable trust is often additionally divided into Public charitable trust and Public non secular Trust.
- Private Trust
A private Trust is that the one whose beneficiaries embody families or people. Further, a non-public Trust are often divided into:
- Private Trusts whose beneficiaries and their requisite shares each are often determined
- The non-public Trusts who’s each or either the beneficiaries and their requisite shares can’t be determined
12A AND 80G Certificates
A Trust or an NGO should acquire a 12A certificate from the revenue enhancement Department. Thus, a Trust effort such a certificate is exempted to pay revenue enhancement for the complete lifespan on its surplus financial gain.
Also, an NGO should acquire 80G certificate. This certificate permits donors, that’s persons or organizations creating donations to an 80G certified NGO, to avail deduction. Thus, such a deduction is given to the donors beneath section 80G of the revenue enhancement Act.
Legislation concerning Trust
A Trust is ruled by Indian Trusts Act, 1882 across India. However, every state will formulate its own Trusts Act to control such NGOs. Further, a Trust will receive funds and returns genuinely like a Society. However, it is quite difficult to urge funds or returns like a shot when a Trust gets registered.
Therefore, to get funds or acquire returns, a Trust must meet several eligibility criteria. Such criteria could embody relevant expertise, performance of a Trust, its age, and such alternative parameters. Furthermore, a Public charitable trust has got to be registered with the workplace of the charity commissioner who has jurisdiction over the Trust.
Registration method for public charitable trust
Choose an acceptable Name for the Trust
This is the primary step in registering the Trust. In addition, the name thus urged shouldn’t come back beneath the restricted list of names as per the provisions of the Emblems and Names Act, 1950.
Determine the Settlers or Authors and Trustees of the Trust
There is no outlined provision with regards to the number of settlers/authors. However, in most of the cases there is usually one author. Further, there is no limit on the utmost variety of trustees. However, a minimum of 2 trustees are necessary to make a Trust. Also, the author usually cannot be the trustee. And he must be a resident of India.
Formulate Memorandum of Association (MOA) and instrument of your Trust
An instrument is legal proof of your Trust’s existence and it contains the principles and rules of your Trust. This document conjointly contains the bylaws relating to the changes, removal, or addition of the Trustees.
Memorandum of Association (MOA) on the opposite hand represents the charter of the Trust. It defines the connection of the Trustor with the Trustees and specifies the objectives that such a Trust is made. Such a document ought to contain the names, addresses and occupations of all the members alongside their signatures.
Documents needed to be submitted at the time of registration
- Trust Deed
- Self authenticated copy of the proof of identity of the settler (Aadhaar card, passport, voter ID, permit or any such exposure ID)
- Self authenticated copy of the proof of identity of every trustee (Aadhaar card, passport, voter ID, permit or any such exposure ID)
- PAN card
- Proof of the registered workplace address of the Trust (electricity/water bill or registration certificate)
- Non Objection letter signed by the owner
Prepare instrument on a stamp paper
As a Trust, you wish to arrange the instrument on stamp paper. The worth of this stamp paper is of a particular proportion of the entire value of the Trust’s property. Further, this proportion varies from state to state.
In addition to the present, you must pay a fee of Rs. 1100. Out of this quantity Rs. 100 is that the registration fee and Rs. 1000 are the costs of keeping a replica of the instrument with a sub – registrar. Once you submit the papers, you’ll be able to collect a licensed copy of the instrument at intervals one week’s time from the registrar’s workplace.
Submit the instrument with the registrar
After receiving a licensed copy of the instrument, submit identical alongside properly authenticated photocopies with the native registrar.
Further, the settler should place his signatures on each page of the photocopy of the instrument. Also, it is obligatory for the settlers in addition as 2 alternative witnesses to be physically present alongside their identity proof (original in addition as self-authenticated photocopy) at the time of registration. However, the presence of trustees is still a debatable subject.
Obtain the Registration Certificate
After submitting the instrument with the registrar, the registrar retains the photocopy and returns the initial registered copy of the instrument. Then, when finishing all the formalities registration certificate is issued at intervals a minimum of seven operating days.
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