Public Trust

Law Corporate law
14-Mar-2022
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The Public Trust is a type of Trust of which the beneficiaries are the general public and carries out charity activities in the area of poverty relief, medical care, education, and every other service utility in the interest of the general public.

The motto of the Public Trust is to support the public at large, and any of the private associations or individuals should be benefited directly or indirectly. And, again it is for all the public, regardless of any religion, creed or caste.

However, it is very important to register a Public Trust to gain faith among the beneficiaries, i.e., General Public. But, the main question arises: what is the Public Registration Process? What are the Public Trust Registration benefits and cons?

Stop Worrying, as this informative write-up will answer all the questions coming to your mind. This article will discuss the Public Trust Registration Process, Documents for the process, and even the Public Trust Registration Benefits and Cons.

What are the Steps Involved in the Public Registration Process?

Decide a Suitable Name for the Trust

This is a primary step in registering a Public Trust. Moreover, the proposed name should not become a prohibited list of names under the provisions of The Emblems and Names Act, 1950.

Choose the Author's/ Settlers and Trustees of the Public Trust

No such specific provision has been stated regarding the number of Author/ Settlers. There is one settler in most of the Public Trust cases. Also, there is no limit to the maximum count of the trustees.

But the formation of Public Trust requires the involvement of at least two trustees. Typically, there is no such rule that a trustee must be a creator of the Trust. But, it is a mandate that the trustee should be an Indian Citizen.

Drafting of MOA (Memorandum of Association) and Trust Deed

This step is essential in the Public Registration Process. The trust deed is legal proof of the existence of the Public Trust and contains the laws and regulations of your Trust. This deed also includes the rules and regulations for the trustees related to adjustments, removals and extensions.

Whereas the MOA reflects the constitution of the Public Trust, and it describes the association of the trustors and trustees and an outline of the intention of forming the Public Trust. Moreover, such declarations will include names and the signatures, addresses, occupations, and photographs of the trustees or members.

Apply for the Public Trust Registration by submitting the Trust Deed

You can submit the Trust deed together with the duly attested photocopies to the local registrar after receiving a valid copy of the Trust deed. Also, on each side of the photocopy of the Trust Deed, the author needs to put its signatures.

It is also necessary for the authors and two more witnesses to be physically available with their evidence of identity at the time of Public Trust Registration.

Obtain the Certificate of Public Trust Registration

Once the Trust Deed is filed with the local registrar, then he/she will keep the photocopy and return the actual signed Trust Deed. If he/she finds that all the formalities have complied, then the certificate of Public Trust Registration will be issued within seven working days.         

What documents are mandated for Public Trust Registration?

  • Trust Deed of the trustees of the Public Trust.Self-certified photocopies of ID proofs and passport size photographs of every trustee of the Trust.
  • Self-certified photocopies of ID proofs and passport size photographs of author and each of the two representatives of the Public Trust.
  • Required address proof (like water bill, electricity bill, etc.) mentioning the address of the registered office of the Public Trust. 
  • PAN Card of the Trust, Trustees and Author.
  •  A NOC signed by the owner of the property.
  • Prepared Public Trust Deed on Stamp Paper. 

Advantages and Disadvantages of Public Trust Registration

Every trustor has to face Public Trust Registration Benefits and Cons. For your reference, we are enlisting some of the advantages followed by the disadvantages.

Advantages of Public Trust Registration

  • Unlike Private Trust, Public Trust is nature-wise more permanent.
  • Public Trust has legal status since it is registered in a few jurisdictions. At the same time, in most cases, private Trusts need not go under a registration process except in the case of sale of real estate, equity holdings, etc. 
  • The most significant advantage of Public Trust Registration is that two or more Public Trust can merge or amalgamate having similar intentions but need prior permission from the respective applicable state laws.
  • Public Trust Registration has lots of income tax benefits. However, in some of the types of trusts, some of the donors avail partial income tax deductions.
  • Usually, donors' funds are used to support this type of Public Trust that comes from the donor's estate. However, it can minimize the burden of estate funds by reallocating the funds in Trust.

Disadvantages of Public Trust Registration 

  • No central act is applicable for regulating Public However, some state governments formed their acts suitable to their administration and conditions.
  • The objects laid down in the Public Trust deed cannot be altered as it is time-consuming and difficult.
  • Dissolution of a Public Trust is not allowed. However, a new clause has been introduced in the Income Tax Act, but it requires a convincing reason in front of the office of the Charity Commissioner. 
  • In Public Trust, there is a low level of confidentiality as it has the involvement of the public at large.

Final Words

There is no denying everything comes with pros and cons together. And it is the same in the case of Public Trust Registration. 

After reading this article, you will be well equipped with the information related to the Public Trust Registration process, documents for it, even with its benefits and cons.


Author Bio: Adv. Siddhanth Deshpande is an accomplished legal professional with a strong background in criminal and civil law. In his 8 years legal career, he has practiced in several courts in Mumbai and Pune, including the Hon'ble High Court at Bombay, city, civil and sessions courts, as well as district and family courts in Greater Mumbai, Pune, Kolhapur, Ahmednagar, and beyond. Siddhanth handles a wide range of legal matters, from criminal and civil cases to family law and election matters. Siddhanth is dedicated to providing comprehensive legal representation to his clients, ensuring access to justice across Maharashtra.

Link: https://restthecase.com/lawyer/details/55369