Trusts are the oldest form of charitable organisations. These may be private or public. Private Trusts are formed for the benefit of family members, or a very small set of known persons. A private trust is not a charitable trust. Private trusts are governed by Indian Trusts Act, 1882. This Act does not apply to public trusts.

In Maharashtra and Gujarat, public charitable trusts must be formed and registered under the Bombay Public Trusts Act, 1950.In other states; public trusts are mostly governed by common law.This means that you can form a public trust by preparing a trust deed and registering it under Registration Act, 1908.

You just need a settler and two or more trustees, who may be Indian or foreign citizens. Trustees can also be paid employees of the Trust. A charitable trust formed anywhere in India can operate in all the states.

In general, trusts are the easiest to form and run. However, as there is no regulatory oversight, disputes have to go to court. The trust deed can also be modified only by the settler making a supplementary trust deed.

If the settler is not available, you need to go to court for modifying the trust deed. There are no regulatory requirements for governance or public filing of accounts.

A public trust is ideal when a person wants to dedicate their own property to a specific cause for all times to come.

It is not so suitable when you want to raise funds from the public for the trust’s activities.

A trust is a bit like a castle, complete with a moat and drawbridge. You lay in supplies for a couple of hundred years, post archers (or lawyers) on the battlements, and get on with your work. But a trust doesn’t work well in a fluid situation. And if you don’t have enough funds of your own, you need to allow tourists (read donors) to pay for the upkeep - just as so many former princes and dukes are doing these days.

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