Trust Registration in Chennai
We at FIRMDESK provide perfect services for trust registration in Chennai. In India, establishing a trust involves creating a legal arrangement where a trustee holds and manages assets for the benefit of beneficiaries. Trusts are commonly used for charitable, religious, or family purposes. FIRMDESK is proud to be the most preferred destination for trust registration in Chennai.
Types of Trusts:
Private Trusts: Governed by the Indian Trusts Act, 1882, these trusts are created for private purposes, such as managing family assets. They do not require registration to be valid but can be registered to gain legal recognition.Â
Public Charitable Trusts: Established for public charitable purposes, these trusts are governed by state-specific legislation. For instance, Maharashtra has the Bombay Public Trusts Act, 1950. Registration is mandatory for legal recognition and to avail tax exemptions.
Benefits of Trust Registration in Chennai
- Tax exemption
- Legal entity
- Financial support
- Family Wealth Protection
- Merits in Immigration and Emigration
Steps to Register a Public Charitable Trust:
Draft a Trust Deed: This legal document outlines the trust’s objectives, name, names of trustees, and the mode of succession. It must be executed on non-judicial stamp paper of appropriate value, which varies by state.
Choose Trustees: Select individuals who will manage the trust. The number of trustees is specified in the trust deed and varies by state regulations.
Prepare Required Documents: Typically, the following documents are needed:
Original Trust Deed.
Proof of identity and address of the settlor and trustees (e.g., PAN cards, Aadhaar cards, utility bills).
Photographs of the settlor and trustees.
No Objection Certificate (NOC) from the property owner if the trust premises are rented.
Submit Registration Application: Apply to the relevant authority, such as the charity commissioner or the registrar of societies, depending on the state. The application should include the trust deed and other required documents.
Pay registration fees: Fees vary by state and are generally nominal. For example, in Maharashtra, the registration fee is minimal, but stamp duty on the trust deed can be significant.
Obtain Registration Certificate: Upon approval, the trust will receive a registration certificate, granting it legal status.
Starting Up a Private Trust
Setting up a Private Trust in India involves creating a legal entity where the trustee holds and manages property for the benefit of specific individuals or groups, called beneficiaries. Private trusts are governed by the Indian Trusts Act, 1882.
Steps to Set Up a Private Trust in India:
1. Identify the Purpose of the Trust
Decide the purpose for which the trust is being established (e.g., wealth management, succession planning, or asset protection).
2. Select the Key Participants
Settlor (Author): The person who creates the trust and transfers property into it.
Trustee(s): Individuals or entities responsible for managing the trust property as per the trust deed.
Beneficiary/Beneficiaries: Persons who will benefit from the trust.
3. Choose the Trust Property
Clearly define the property or assets to be placed in the trust (e.g., real estate, financial assets, or other tangible/intangible property).
4. Draft the Trust Deed
A trust deed is a legal document that establishes the trust and outlines its terms. It should include:
Name of the trust.
Details of the settlor, trustee(s), and beneficiaries.
Description of the trust property.
Objectives of the trust.
Rights, duties, and powers of the trustees.
Mode of succession for trusteeship.
Procedures for amending the trust or winding it up.
The deed must comply with the Indian Trusts Act, 1882.
5. Stamp Duty and Registration
The trust deed must be executed on non-judicial stamp paper, with the value depending on the trust property and state laws.
The deed must be registered under the Indian Registration Act, 1908, to give it legal validity.
Submit the trust deed to the Sub-Registrar’s office.
Required documents:
Original trust deed.
Identity and address proof of the settlor and trustees.
Details of the trust property.
Passport-sized photographs of the settlor and trustees.
6. Appointment of Trustees
Appoint individuals or corporate trustees with adequate expertise and integrity to manage the trust.
7. Specify the Trust’s Operation
Define how the trust will function, including:
Distribution of income to beneficiaries.
Decision-making authority.
Succession plans.
8. Create Bank Accounts
Open a dedicated bank account in the name of the trust for managing its funds.
Advantages of Private Trusts
Asset Protection: Safeguards assets from potential legal claims.
Succession Planning: Ensures smooth transfer of wealth to heirs without disputes.
Tax Efficiency: Can be structured to minimize tax liabilities.
Confidentiality: Private trusts are not required to disclose details publicly.
Key Legal Considerations
- Revocable vs. Irrevocable Trusts:
- A trust can be either revocable (alterable by the settlor) or irrevocable (cannot be changed after creation).
- Tax Implications:
- Income generated by the trust may be taxable under the Income Tax Act, 1961, depending on its structure and objectives.
Trust Registration Charges
Our Highlights
- Professional Handling
- Affordable Costing
- Quick Time Service
- Constant Support