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Overview of Ngo

Overview of Ngo
trust Registration

NGO trust registration is the process of creating a legal entity that can carry out non-profit activities for social welfare. The registration process may vary depending on the country and its laws, but generally involves the creation of a trust deed or memorandum of association, submission of required documents, and approval by the government authority responsible for registration of NGOs.Due to the nature of its activities, the trust may need to get different registrations and rights in order to operate. It also has to have a governing board of trustees. Once registered, the trust can receive donations and grants, and conduct activities aimed at achieving its social objectives.

PSR Compliance

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Acts of Trust Registration in india The Indian Trusts Act, 1882, a specific law that takes effect statewide, governs the registration of trusts in India. The following are the key steps involved in registering a trust in India:
Prepare a trust deed: The goals, guidelines, and rules of the trust are set out in the trust deed, a legal instrument. It must list the trust's name, the trustees' names and addresses, and the reason the trust is being established.
Get the trust deed notarized: The trust deed must be notarized by a notary public to ensure its legal validity.
Submit the trust deed: The trust deed must be submitted to the local Registrar of Trusts, along with an application for registration.
Pay the registration fees : Depending on the state in which a trust is being registered, there are different registration fees.
Obtain the registration certificate: Once the Registrar of Trusts is satisfied that the trust deed meets all the legal requirements, a registration certificate will be issued. The trust is now officially registered and can begin its activities. It's important to note that the process of trust registration may vary slightly depending on the state in which the trust is being registered, and additional registrations and licenses may be required depending on the nature of the trust's activities.

Benefit of Trust Registration

There are several benefits of trust registration, including:

Legal recognition:

Trust registration gives the trust a legal identity and recognition, which can help in gaining credibility and public trust.

Tax benefits:

The Income Tax Act and the Goods and Services Tax (GST) Act are just two of the legislation in India that offer registered trusts tax benefits and reductions.

Access to funding:

Registered trusts can apply for grants, donations, and other forms of funding from government bodies, corporates, and individuals, which can help in carrying out their social objectives.

Liability protection:

Trust registration can provide protection to trustees and members from legal liabilities and lawsuits, as the trust is considered a separate legal entity.

Perpetual existence:

Trusts can have perpetual existence, which means they can continue to exist even if the trustees change or pass away. Overall, trust registration can provide a strong legal foundation for non-profit organizations, and can help in achieving their social objectives while enjoying various benefits provided by the government.

Document Required for Trust Registration

The following are the documents that are generally required for trust registration in India:

Trust deed:

A legal document that outlines the objectives, rules, and regulations of the trust. Identity and address proof: Documents such as PAN card, Aadhaar card, passport, or voter ID card of all the trustees.

Photographs:

Passport-sized photographs of all the trustees.

NOC from the landlord:

If the trust is operating from rented premises, a No Objection Certificate (NOC) from the landlord is required.

Property papers:

If the trust owns property, documents related to the ownership, such as title deeds, property tax receipts, etc. may be required.

Power of Attorney:

If one of the trustees is unable to attend the registration process, a Power of Attorney (POA) may be required, giving another trustee the authority to act on their behalf. It's important to remember that depending on the state in where the trust is being registered and the operations of the trust, different rules can apply. Additional documents might also be needed. It is recommended to consult a legal expert or a chartered accountant for guidance on the registration process and required documents.

Trust Registration

Types Of Trust Registration

In India, there are two main types of trust registration:

Public Trust: The term "public trust" refers to a trust that is created for the benefit of the entire public or specific Community. A public trust's trustees are chosen to oversee the trust and its resources on behalf of the beneficiaries. The registration of a public trust is governed by state-specific trust laws.
Private Trust:
A trust that was established with a particular person or group of people in mind is considered private. A private trust's trustees are chosen to oversee the trust and its funds on behalf of the beneficiaries. The registration of a private trust is governed by the Indian Trusts Act, 1882. It's important to note that the registration process and requirements for public and private trusts may differ slightly. In addition, there can be additional trust categories, such as charitable, religious, educational, and others, that have particular rules and procedures for registration. It is recommended to consult a legal expert or a chartered accountant for guidance on the registration process and requirements for the specific type of trust being considered.

Penalty of Non Compliance of trust registration

The penalty for non-compliance of trust registration in India may vary depending on the nature and severity of the violation. The following are some of the consequences of non-compliance:

Loss of tax benefits: One of the primary benefits of trust registration is the tax exemption and benefits that the trust can avail. If the trust is not registered or fails to comply with the relevant tax laws, it may lose these benefits.
Legal liabilities: Non-compliance of trust registration and relevant laws may make the trust and its trustees liable for legal action and penalties, including fines and imprisonment.
Cancellation of registration: The government has the right to revoke a trust's registration if it doesn't adhere to the requirements for registration. This could lead to the trust losing its ability to function and its legal identity.
Damage to reputation: Non-compliance of trust registration and relevant laws may damage the reputation and credibility of the trust, which may impact its ability to receive donations and grants from the public and other stakeholders. To ensure compliance with the pertinent rules and regulations and avoid the above penalties, it is advised to consult a legal professional

PSR Compliance Assistance

The 12A registration is a provision under the Income Tax Act, which enables a trust to claim tax exemption on its income. The advantages of 12A registration for a trust include:

Tax exemption: Registered trusts can avail of tax exemption on their income, which can help in reducing their tax liability.
Credibility: 12A registration is considered a mark of credibility for a trust, as it is an indication that the trust has fulfilled the necessary compliance requirements.
Access to funding: Registered trusts are eligible for funding from government bodies, corporates, and individuals, as they are perceived as more trustworthy and credible.
Better governance: The process of getting 12A registration involves the submission of documents and compliance requirements, which can help a trust establish better governance practices and processes.
Enhanced transparency: Registered trusts are required to maintain and submit audited financial statements, which can improve transparency and accountability to the stakeholders. In summary, 12A registration is an important requirement for trusts to be eligible for tax exemption and can provide several advantages that can help them in their social objectives.

PSR Compliance Assistance

The process of registering a NGO Trust registration involves adhering to many requirements, preparing documents, and complying with pre-Registration and post-registration compliances. Moreover, complying with specific Trust registration mandates is imperative to avoid incurring hefty penalties and late fees. This process can seem daunting and confusing without professional assistance. PSR Team provides expert service in the online registration process of NGO Registration . Our team of experts will assist you every step of the way in your journey to get your Trust registered.

Frequently Asked Questions(FAQ's)

  • 01. What is a Section 8 Company?
    A section 8 company is a form of non-profit organisation that was founded to advance the arts, sciences, education, commerce, social welfare, religion, charity, or any other worthwhile cause and aims to utilise its revenues or income to further these ends.
  • 03. What is an NGO?
    Non-Governmental Organization is referred to as NGO. It was typically founded to advance human rights, social welfare, education, and other charity causes. It is a nonprofit organisation that is independent to the executive branch of power.
  • 05. What is a Trust?
    A trust is a legally binding agreement where one person or group of people owns assets or property on behalf of another person or group of people.
  • 07. What are the documents required for NGO trust registration?
    The documents required for NGO trust registration include the trust deed, PAN card and Aadhaar card of the trustees, address proof of the trustees, and other supporting documents as per the requirements of the concerned authority.
  • 09. What is the minimum number of trustees required for NGO trust registration?
    The minimum number of trustees required for NGO trust registration is two.
  • 02. How to register an NGO trust?
    A Section 8 Company is eligible for tax exemption under Section 12A and Section 80G of the Income Tax Act.
  • 04. What is the validity of NGO trust registration?
    NGO trust registration is valid for a lifetime unless the trust's objectives, activities, or legal status change, or if the registration is cancelled or revoked by the concerned authority.
  • 06. What is the tax structure for an NGO trust?
    An NGO trust is eligible for tax exemption under Section 12A and Section 80G of the Income Tax Act.
  • 08. Can an NGO trust engage in commercial activities?
    An NGO trust can engage in commercial activities as long as the profits earned are utilized for the promotion of its objectives and are not distributed among the trustees or members.

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