Hello,
My name is Uma and I am writing on behalf of an educational NGO based in Chennai. We have been operational since 2007 and we are providing Montessori education to the under priviledged children by adopting the local balwadis.
As we are looking to expand, we are looking for external resources for funding and the first question which comes up is the registration certificate. The trustees of this organization executed the trust deed on non-judicial stamp paper and we do have the copy of the trust deed. We are also registered under the section 12AA of income Tax and getting 80G exemption as well since 2008.
Now we applied for the FCRA application and the lawyer is saying that the trust is not registered and asking for the registration certificate.
1. Is execution of the trust deed on stamp paper not considered as registration ?
2. What is the registration certificate ? how do I find this ?
3. If we need to do the registration, will our history of the work be considered for evaluation ?
4. Is there a way to find out whether our trust is registered ? if so, where ?
Can somebody provide a clarification on this ?
Sincerely,
Uma
Nishkam Chennai
Are employees of an NGO exempt from paying PF?
I am Rose Raj A., the Chairman of UDDHAN CHARITABLIE TRUST, an NGO based in Thiruvananthapuram, Kerala: Education and social uplift is one of our objectives. I do reply to this issue on a social commitment. This E-mail was forwarded to me by Rt. Rev. Dr. SelvisterPonnumuthan, the Bishop of Punalur
Before setting answer to the 4-qustions raised, let me clarify some important points to be remembered by the promoters of NGOs, particularly Trusts.
A Trust is created based on four components inherent (u/s 6 of the Trust Act)
A) INTENTION (of the Author)
B) PURPOSE (of the subject matter u/s 8)
C) The BENEFICIARY (u/s 9)
D) The trust property or Trust money and TRANSFER of the trust Property to the TRUSTEE (u/s 10 and 11 etc.)
A, B and C above constitute the creation of the obligation attached to trust property and `D’ above makesreposing of the said created obligation, and ‘ c ’and `d’togetherly make the transferring of the trust property on DEFINED TERMS set forth: and all these are togetherly definedunder the term Trust (u/s 3 of the act )
Executing the above said `DEFINED TERMS’ are called TrustDeedorTrust Instrument, that which is a `Document’ in legal definition.
Registration of the said “Document” `under the law for the ‘registration of document’ for time beingin force’ (Chapter 1 PRILIMINARY of the Act) shall serve the purpose.
Now answers to your questions in the number –order:
1. Execution of Trust Deed(even if it is done in stamp paper) is different from Registration.
a) Execution of the Trust Deed is executing the Instrument as per the Act required to function to perform the Trust.
b) Registration is to get the said Instrument registered in a Registry as per the Registration Act to make it a “ Registered Document.”
2. In the case of companies Act and Societies Act, there is process of issuing a certificate in the prescribed form of an Instrument subsequent to the completion of the registration procedure. Whereas with regarding the registration of the Trust – it is the process of document registration:and the registered document with its registered Number, date of registration and place of registration, with the signature and seal of the said registrar is valid ( and is clearly said in the case of FCRA Registration/ FCRA prior permission)
3. When you register a trust subsequently years after its promotion and working, and if you plan/propose to register now,specifically express the same in writing, in the Deed you prepare for registration. ( and is valid along with the Audit Report and Balance Sheet / Books of Account you keep)
4. The fact you have not registered the executed Trust Deed of your Trust in any concerned office of a Registrar itself is a way out to acknowledge yourself that you have not registered the same, or otherwise!You can Register your Trust Deed in the Registry, in which jurisdiction the office of your “Trust situates, any time ahead.
Note: -Registration is not necessary for promotion and working of any Trust; whereas registration is mandatory for licensing, certifications and to obtainvarious otherbenefitsfrom the Government. In fact, I still wonder how did you procure 12AA, 80G etc. without a Registered Trust Deed.
Thanks, Regardsand welcome for further participation, if any.
Rose Raj A
CHAIRMAN – UCT
Dear Rose Raj,
Thankyou so much for a very comprehensive answer. It very well explains the difference between Executing a Deed and registration of a Deed. It has also very well identified, the conditions necessary to create a valid Trust. Please do participate in future discussions too.
warm rgds
Dear Ms. Uma,
The Trust deed is executed on the stamp paper. It has to be registered with the sub registrar in the jurisdiction where your NGO is located. The stamp of the sub registrar should be there on the back side of all the pages of the Trust Deed.
In case of Trust there is no registration certificate. The Trust Deed itself is the certificate as well as the objectives/bye laws. The registration number will generally on the top of the page.
Any details of the Trust in terms of legality will be available with the sub registrar office.
Thanks and regards,
B V Soma Sastry
Dear Uma,
I generally agree with the comments already given by most readers. I really appreciate the quality of responses from our members, which has really enhanced and I thank all the members for their contributions.
One comment, you mention that you have a copy of the Trust Deed, normally you should have the original, which should have stamp and signature of the concerned SDM, who registered the Deed. Generally the Deed also has a number quoted (sometime not readable which is some kind of serial number this reflects reference of SDMs own records. If you do not have original version, you should try getting the copy certified by the concerned registering authority. But certainly do not go for re-registration that will mean new legal entity, which will mean new S.12AA, new 80G and what not.
If you register the Trust deed in the Sub-registrar’s office, it becomes the registered Trust Deed with the seal of the Registrar. That Deed is your registration certificate. You will not get any other registration certificate from registrar for the Trust. In fact without this registered trust deed, you will not get 12AA and 80G registration. So I feel that the argument of the lawyer that your trust is not registered is not valid argument . It may be due to his ignorance.
V.J. George
Dear Uma, The trust deed on nonjudicial stamp paper should have been registered in the office of a Sub-registrar. Then they would have given the registration number. In that case it becomes a registered organization. If it has to be done now only, then the FCRA department may not take into account the previous activities carried out by your organisation.
I agree with S S SHIVA
The trust deed be registered with the sub-registrar’s office who registers it and marks the registration no usually on the back of last page of trust deed with its stamp and gives the volume no. and pages of the register where the document is registered. If you look on the back of last page of the trust deed you may find the aforesaid details given which is proof that the trust is registered. As the querist claims that they are registered with the I.T authorities u/s 12A and 80G, the trust deed must be registered with the sub-registrar’s office as per the Indian Trust Act because its registration status is ensured by the I.T. department before registration is granted u/s 12A and 80G.
Mr. Handa is right that without registration of trust deed IT department does not grant any exemption under 80 G etc. Therefore, the query is redundant and a matter of ignorance on the part of the lawyer as well as the office bearers of the trust.