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Trust Registration

Trust Registration

 Still looking for Trust registration in Patna, Trust Registration in Bihar or Ranchi or Jharkhand or  in other place of  India? If yes, Call or whatsapp at+91-8540099000 or email us at info@meerad.in to talk to the best Trust Consultant of Bihar and Jharkhand. From 2013, we have served more than 10000 entrepreneurs directly or indirectly. Our focus from our inception is to provide to our customers best of services and satisfaction. Where focus of other companies could be to earn money but our focus has always been to provide best and timely services to our customers and at the same time, to keep costs to minimum and lower than the market rate.

 Meaning of Trust

The concept of trust was originated with the principles that one person put trust on some other person to carry out his works, it may be to run schools, colleges, universities or to simply look after his properties or children. The person who put trust or who creates trust is called “settlor”. The person on whom responsibility is given is called “Trustees” and person or group of persons for the welfare of which, the trust is called is or are called as “Beneficiary”. Trust can further be classified as “Private Trust” or ‘Public trust”. Private trust is created for some particular person or group of persons whereas public trust is created for the benefit of public as a whole.

How trust is created?

Trust is created by the way putting all terms and conditions on a deed or agreement, in which all details of settlor, trusteee, beneficiary, trust properties, trust funds and trust periods are written. To give trust deed, validity in the eyes of laws, it must be registered with the government authority.

Definition of Trust

Creation of a trust, particularly relating to an immoveable property is also a specie of transfer of property. Trust is defined in section 3 of the Trust Act, 1882 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. In simple words it is a transfer of property by the owner to another for the benefit of a third person alongwith or without himself or a declaration by the owner, to hold the property not for himself and another.


Requirements of a Trust

A trust is not a contract of agency to hold the property, as in that case there would be no transfer of the property. In trust there is a transfer from the owner to the trustee subject to certain terms and conditions. Bailment is also a kind of trust, but in bailment also there is no transfer of any interest in the property, but only a transfer of possession without ownership. Thereof, a trust is essentially a transfer of property by one to the other to be held by the other for the benefit of some person or for carrying out some object. It is no also a sale because a sale cannot be conditional and in sale there is consideration which is absent in a trust. The purpose of a trust must be lawful, that is,

1. It should not be forbidden by law.
2. It should not be of such nature that, if permitted it could defeat the provisions of any law.
3. It should not be fraudulent.
4. It should not involve or imply injury to the person or property of another or
5. It should not be such as would be regarded by a court as immoral or opposed to the public policy.

Where a trust is created for two purposes one of which is lawful and the other is not and the two purposes cannot be separated, the whole trust is void.

Creation of Trust

A trust of immoveable property can be created by two ways. One by a non-testamentary document and another by a testamentary document such as a will. In other words, a trust regarding a immoveable property cannot be created orally but it must be by a document duly registered. A trust of a moveable property can be created either by a document or delivering the property to the trustee with necessary oral directions. If the directions are given in writing it would amount to a trust by a non-testamentary document which may or may not be registered.
A person who creates a trust is called the settlor, the person to whom the the property is transferred on trust is called a trustee and the person for whose benefit the property is transferred is called the beneficiary or “cestuique trust” .


Deed of Trust

A trust relating relating to an immoveable property is required to be created by a document and such document must state and contain five essential things with reasonable certainty namely :

1. the intention on the part of the author of the trust or settlor to create a trust.
2. the purpose of the trust.
3. the beneficiary.
4. the trust property, and
5. transfer of the property to the trustee.

Who can Create a Trust

A Trust can be created by any person competent to contract or even by a manner with the authority of a competent court and respect of any property which is transferable and over which the author of the trust has dispossessing power.


Private & Public Trust:

A Trust may be Private and Public.
When the purpose of the trust is to benefit an individual or a group of individuals or his or their descendants for any legal person and who is capable of holding property, it is a private trust.

When the purpose of the trust is to the benefit the public or any section of the public, it is public trust.

Who can be a Trustee?

A trustee can be any person that is, an individual or a corporate body or a corporate sole, capable of holding property and competent to contract. and he must accept the trust.

A Trust can be created by any of the following methods:

    • By Trust Deed
    • By Will
    • By Transfer of Property

 By Trust Deed

A trust declared inter vivos or by the acts of the parties is to be supported and evidenced by a non testamentary instrument in writing and signed by the author of the trust and the trustee (i.e trust deed). There is no prescribed form of a trust Deed. Any words which indicate the intention of the author that the property of which he is the legal owner, shall beneficially be another’s is sufficient. A trust in relation to an immoveable property must be supported by a trust deed, unless it is declared by a will, and must be registered.

A trust declared by a non testamentary instrument comes into effect from the date specified in the instrument or the date of its execution, where the date is not specified.

Necessity of Trust Deed

A trust can be created orally but in such cases it is necessary to prove that there was either an express declaration as to the trust or that there is evidence of language or expressions used by or facts and conduct of the owner of the property to indicate with reasonable certainty that trust was created. In order to remove ambiguity and disputes, it is always advisable to create a trust by a written trust deed.

Registration of Trust Deed

As Trust deed is non mandatory requirement, the registration so is not statutorily required but it is always desired. A registered trust deed has the following advantage:

        • A registered trust deed is an official document enforceable by law.
        • A registered deed effectuates transmutation of possession. The registration of trust deed , in the absence of an intention to the contrary, is enough to convey the title to the trust property to the trustee even if the trust deed is not delivered to the trustee.
        • A conveyance of the trust property to the trustee, under a registered deed is generally, not open to challenge, except where there is no intention to act upon the deed.

By Will

A person may declare his intention to create a trust in respect of his property or any part thereof by way of a will. A will according to the Indian Succession Act must be in writing and signed thereof by all testators in presence of two witnesses. A trust declared under will , shall came into existence.

By Transfer of Ownership

A trust in relation to moveable property can be formed also by mere of ownership of the property or the trustee with a direction that the property be held under trust for the benefit of the beneficiary. The ownership of a moveable property can be transferred by physical act of handing over the possession of the property.

In case where the author himself is the trustee, transfer of possession is neither necessary nor possible and mere declaration of the author that he holds the property under trust would be sufficient to constitute a trust.

Trust Registration Procedure;

The Commissioner/Registrar, on receipt of an application for registration of trust shall within the expiry of six months from the end of the month in which application was received for registration shall move along with in the under listed manner :

The Commissioner may call upon for necessary documents in order to satisfy himself about the genuineness of activities of the trust and can also make necessary inquiries.

After being satisfied about the nature, objects and the genuineness of the trust or institution he may –

i. Pass an order in writing registering the trust or institution.

ii. Pass an order in writing refusing registration of trust or institution, if he is  not so satisfied by the documents submitted to him by the trust.

iii. Give the applicant a reasonable opportunity of being heard in case (ii).

iv. Sent a copy of such order to the applicant.
If after granting registration subsequently the commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out non-parallel in relation to its objects, then he may pass an order in writing, cancelling the registration of trust or institution, after giving such trust or institution a justifiable opportunity of being heard

Topic discussed in the page: Trust Registration & Procedures in Patna Bihar Jharkhand Ranchi Gaya Jahanabad Jamshedpur Hazaribag | Register your trust in just two days in India.

This article is written by: ACS Prince Kunal
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