FAQ ON REGISTRATION OF TRUST IN KARNATAKA
How to form a Trust'?
a) A trust can be formed as per Section 4 of Indian Trust Act 1982
for a lawful purpose;
b) A trust should have a document written (Trust Deed) and signed
by trustees or a sole trustee;
c) A trust can be formed through a will also; There is no definite
form to create a trust. Objectives of the trust should be clear and
unambiguous;
Who can form a Trust?
a) A person capable of making contract can form a trust;
b) Trust can be formed on behalf of minor with permission of
Civil Court
Minimum and Maximum number of Trustees
Minimum 2 Trustees are necessary. There is no limit on the maximum
number.
Educational qualification of Trustees
No educational qualification needed to become a Trustee.
Age limit
Minimum age to become a trustee is 18 years in the case of female
and 19 in the case of male. However, an average of 19.5 years is considered in
general.
Residential status of Trustees
A trustee must be a resident of India. Foriegners, OCI card
holders and NRIs residing abroad for more than 6 months cannot become member of
a trust.
Trust Deed
The trust deed is the Memorandum of Association and Rules &
Regulation of the Trust. Trust deed is the legal evidence of the trust.
Clauses in Memorandum & Regulation
Name Clause
Settler and Trustee
Object Clause and beneficiaries
General Body
Membership clause
Subscription clause
Meeting Clause
Committee/Governing Body Clause
Auditor
Appointment, removal and replacement of Trustees
Right, duties and powers of trustees
Intention to divest the trust property upon the trustees
Property that shall devolve upon the trustees under the trust
Contents of a Trust Deed
Name and address of the settler/author
Name and address of trustees
Name of the trust
Minimum and maximum number of trustees
Address of the registered office of the trust
Purpose of formation of trust
Objectives of trust
Rules and regulation of trust
Information about opening bank account
Tenure of the trustees
Designation of trustees if any, responsibilities with compensation
for the professional services they are intended to render. Board of trustees
are not entitled to draw remuneration. They can only take compensation for the
professional services they are rendering to the trust.
Date of execution of the trust deed.
Details of the trust fund set up by the settler and the movable
and immovable property divested in the trust fund.
Details of sources and activities through which income is earned
and deposited in the trust fund.
Utilization of trust fund for the benefit of beneficiaries of
trust.
Right, duties and limitations of trustees
Details regarding number and manner of holding meeting in a year
Procedure to modify or alter any clause in the trust deed
Conditions under which a trustee shall ceases to exist
What is the stamp duty to be paid for a Trust Deed?
1. Rs.500/- if only money is contributed by the author of trust or
if immovable property is convyed where in the author remains as the sole
trustee.
2. Same duty as conveyance if the immovable property is conveyed
and the author is not a trustee or a sole trustee
What is the fee for registration of trust deed?
As per Article III of table of fees under Karnataka Registration
Rules 1965, fee shall be paid at 1 percent on the total of value shown by the
trustee or value of movable or immovable property shown in the trust deed.
Cancellation of trust
A trust can be cancelled on the following grounds as per Sec. 78
of The Indian Trust Act 1882:
a) Trust can be cancelled at the will of the trustees;
b) Trust can be cancelled if there is provision for cancellation
in the deed.
c) If author of a trust creates trust for the purpose of repayment
of his debt and if this is nor informed to the creditor author can cancel the
trust.
Can the defects in the trust be rectified by amendment?
Yes, amendment can be made a rectification or supplementary deed.
Documents for registration of Trust
1. Trust deed on stamp paper
2. Two passport size photograph
3. Self attested copy of PAN and ID proof
4. Signature of settler on all pages of trust deed
5. Proof of registered office address (Electricity Bill/Water bill
etc)
6. NOC from land owner with his identity proof
7. Proof of property registered in the trust name
For more information and registering a Trust contact +91
9744522483 or write to contact@finmatrix.in
@Finmatrix Strategic Consulting Private Limited
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