Trust registration for NGOs

A trust is a legal entity that is created to hold and manage property or assets for a specific

purpose, such as charitable or non-profit objectives. In India, trusts are governed by the Indian

Trusts Act, 1882. Trusts are a popular form of organization for Non-Governmental Organizations

(NGOs) that aim to promote social welfare, education, healthcare, environmental protection, and

poverty alleviation. In this article, we will discuss the significance of trust registration for NGOs

and how it can benefit an organization.

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To register a trust, the NGO must have a minimum of two trustees. The trustees are responsible

for managing the trust's affairs and ensuring that the trust's objectives are fulfilled. The

registration process for a trust is relatively simple and involves the following steps:

1. Name: The NGO must choose a unique name for the trust that is not similar to any
existing trust or company.
2. Deed of Trust: The NGO must prepare a deed of trust that outlines the trust's objectives,
the management of the trust, the powers and duties of the trustees, and the rules for the
appointment and removal of trustees.
3. Trustees: The NGO must appoint at least two trustees who will manage the trust's
affairs. The trustees must sign the deed of trust and register the trust with the Registrar
of Trusts.
4. Registration: The NGO must submit the deed of trust, along with the registration fee, to
the Registrar of Trusts in the state where the trust is located. Once the Registrar
approves the application, the trust is registered, and the NGO can start its operations.

Benefits of Trust Registration for NGOs

1. Tax Benefits: A registered trust is eligible for tax exemptions under Section 80G of the
Income Tax Act, 1961. This means that donations made to the trust are tax-deductible,
which can encourage more individuals and companies to donate.
2. Credibility: A registered trust is a legally recognized entity, which adds credibility to its
operations. This can help the NGO attract more donors, investors, and stakeholders.
3. Limited Liability: Like any other legal entity, a registered trust has limited liability
protection. This means that the trustees' liability is limited to the assets of the trust, and
they cannot be held personally liable for any losses incurred by the trust.
4. Perpetual Succession: A registered trust has perpetual succession, which means that the
trust will continue to exist even if the trustees or beneficiaries change. This ensures the
trust's continuity and stability.
5. Access to Grants: A registered trust is eligible for grants from the government and other
organizations, which can help the NGO expand its operations and achieve its objectives.
Conclusion

In conclusion, trust registration is a significant step for NGOs that aim to promote charitable or

non-profit objectives. A registered trust offers various benefits, such as tax exemptions, limited

liability protection, credibility, perpetual succession, and access to grants. These benefits can

help the NGO attract more donors, investors, and stakeholders, which can, in turn, help the NGO

achieve its goals.

The registration process for a trust is relatively simple, and NGOs can obtain professional

assistance to navigate the process. However, it is essential to ensure that the trust's objectives

and management are well-defined and that the trustees are reliable and committed to fulfilling

the trust's objectives. By obtaining trust registration, NGOs can establish a legally recognized

entity that can help them achieve their objectives effectively and sustainably.

By NGO Partner