Trust

Starting at Rs. 9999/- onwards + GST

Trust

A trust (under the Indian trusts act 1882) is a legal relationship that occurs when one man, for the benefit of a third person or himself, hands over all or some of his property to another. The author is known as the person who hands over the land, the person who receives it is known as the trustee, and the beneficiary is known as the person who profits from it.

A trust company is a legal entity that acts as a fiduciary, agent, or trustee on behalf of a person or business for the purpose of administration, management, and the eventual transfer of assets to a beneficial party. The trust company acts as a custodian for trusts, estates, custodial arrangements, asset management, stock transfer, beneficial ownership registration, and other related arrangements.



KEY POINTS

  • A trust company is a legal entity that acts as a fiduciary, agent, or trustee on behalf of a person or business for a trust.
  • A trust company is typically tasked with the administration, management, and the eventual transfer of assets to beneficiaries.
  • A trust company acts as a custodian for trusts, estates, custodial arrangements, asset management, stock transfer, and beneficial ownership registration.
  • Trusts are managed for profit, which it may take out of the assets annually or upon transfer to the beneficial third party.

UNDERSTANDING SOLE PROPRIETORSHIP


  • Private Trust: A fund is called a Private Trust if it is for the benefit of one or more persons, or within a specified period, which may be available. Financially Trusted Trustees are governed by the Indian Trust Act 1882. Private Trust may be established between Vivos or will.
  • Public Trust: The fund is called the Public Trust when it is created entirely or primarily for the benefit of the general public. In other words, the beneficiaries of the Public trust form a non-profit organization. Public funds are actually charitable or religious resources and are governed by the general law. The provisions of the Indian Trustees Act do not apply to Public Trustees. Like secret trusts, public trusts can be built by inter vivos or by will. Indian Trust Act does not apply to public trusts that may be established by common law.
  • Public cum Private Trusts: Some trusts may be classified as Public cum Private Trusts, whose portion of the profits may be used for public purposes and a portion may go to a private person or individuals. Such trusts shall be eligible for exemption in respect of the portion of income earned by private individuals or persons as private trusts and shall be eligible for exemption in respect of the portion of income received for public purposes in compliance with section 11, given that such trusts have been created before the Income Tax Act of 1961, i.e. before 1-4-1962. Public-cum-private produced on or after 1-4-1963 is not eligible for exemptions under section 11.

    ADVANTAGES


  • Better Tax Planning: Creation of trust helps in better planning of tax as the author is no more taxed over the trust property, instead the trustee is taxed for the trust property. An organized and well administered trust can offer many tax rebates and substantial efficiencies.
  • Confidentiality: Making a will is often tiresome and needs a lot of disclosure of property, whereas making trust instead would help in maintaining the confidentiality of the author as not much disclosure is required and the person can also save estate duty over the trust property.
  • Flexibility: It offers increased flexibility to a property, by creating a discretionary trust where the property is capable of adapting to the changing norms and demands. In this case, settlor can choose a class of beneficiaries and give the discretionary powers to the trustees to distribute the asset as they wish to do. Thus, the beneficiaries only have a contingent interest in this kind of trust.
  • Legal Rights: When a trust is registered, it gives legal rights to the members of the trust to hold property.
  • Support to community: Trust can also aid in providing support to the weak, as people who are unable to manage their own affairs and children or don’t have the means to do so, then the trust may offer independent help to such people.

DOCUMENTS REQUIRED


    Information:

    • Proposed name of the trust
    • Contribution amount.
    • Object of the company.
    • No of members.
    • Email Id of all the members.
    • Mobile number of all the members.

      • Documents:

    • Address proof all members.
    • Pan Card of all members.
    • Address Proof of Office/Place (Electricity Bill latest by 2 months) and NOC/Rent Agreement.
    • Passport size photo of all members.

    Timelines

    It takes 25 to 30 working days for the formation of unregistered firm and around 25 to 30 working days for registered partnership firm.


    Fees

    Society Registrations start from Rs. 9999/- onwards + GST, but the registration may vary from state to state.

FAQs


  • Is trust registration mandatory? 

    Registration depends on the type of trust. For a public trust involving movable or immovable property, registration is not mandatory but recommended. In the case of a private trust involving immovable property, registration of the trust is mandatory except when it is created by way of "will".

  • Is stamp duty required to be paid while setting up a trust?

    Stamp duty depends on the state or territory in which the trust is being set up or where you want to run your business or own a property.

  • Can a property be registered in the name of a trust?

    Having property registered in the name of a trust protects it from creditors. Furthermore, having a property registered in the name of a trust may have tax advantages.

  • Can trust property be leased?

    Yes, trust property can be leased, but not for more than 21 years. If the lease is required to extend beyond 21 years, then the permission of the local civil court is required.

  • Can a founder of a trust be a trustee?

    A trust's founder can also be a trustee and/or a beneficiary. However, because a trust is a contract and a person cannot contract with himself, the founder cannot be the only trustee.

Address :

T-10, 3rd Floor, Pankaj Plaza, PLOT-7, Pocket 7, Sector 12, Dwarka, New Delhi, Delhi 110075

Phone Number :

011-41734240, 9999704687

Email :

info@vyaapaarsalahkaar.com