Trust means transferring property from the owner to some other person. Trust can be created executing the trust deed. There are 2 types of trusts where private trust is formed for the benefit of a group of people and public trust is formed to benefit the general public. To start an NGO, public trust is the most convenient way. Trust functions to eradicate poverty, offer medical relief and provide education to the underprivileged. Its general aim is to promote arts, science and literature. Trust cannot be amended/terminated without the permission of the court.
Get Informed about:
Regulators and Administrators:
Public Trusts are governed by Bombay Public Trusts Act, 1950 all over India expect the functioning of the Trusts in States of Maharashtra and Gujarat. Public Trusts in Maharashtra comes under Maharashtra Public Trusts 1950.
Private Trusts comes under the regulations of Indian Trusts Act, 1882.
No. of Members: Trust can be formed with Trustor/Author, Trustee and beneficiary. Minimum two members are required and there is no maximum limit for adding members. While registering the Trust, provision regarding the management of Trust, procedure of appointing and removing members need to be mentioned.
Objective: Trust needs to be formed for a lawful objective and not in unlawful or fraudulent or invalid purpose. The objective of Trust should be valid and generous.
Trusts Instrument: Trust deed or say Trusts Instrument is most important part of the trust and its formation. The objectives of trust along with information of the beneficiaries of trusts, the power of trustees all are mentioned in Trust Deed. Trust Deed is to be signed by all the partners in front of Registrar in presence of two witnesses.
Benefits: Public Trusts can avail the tax exemptions once registered with the Income Tax and get benefit of it. Whereas Private Trusts do not get the tax benefit also can’t get any government privileges or scheme benefit.
