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Trust
 

Trust are formed under a Trust deed and registered with Registrar office and Income Tax Authority. In general a Trust deed will be created.
A Trust may be Private and Public.

When the purpose of the trust is to benefit an individual or a group of individuals or his or their descendants for any legal person and who is capable of holding property, it is a private trust.

 

Charitable Trust:

A public charitable or religious institution can be formed either as a Trust or as a Society or as a Companyregistered u/s 25 of the Companies Act. It generally takes the form of a trust when it is formed primarily by one or more persons. To form a Society at least seven persons are required. Institutions engaged in promotion of art, culture, commerce etc. are often registered as non-profit companies.

When the purpose of the trust is to the benefit the public or any section of the public, it is public trust, In general, trusts may register for one or more of the following purposes.
Relief of Poverty or Distress
Education
Medical Relief
Provision for facilities for recreation or other leisure -time occupation (including assistance for such provision), if the facilities are provided in the interest of social welfare and public benefit.
The advancement of any other object of general public utility, excluding purposes which relate exclusively to religious teaching or worship.

Requirements for the Charitable Trust

At least two trustees are required to register a public charitable trust.
Legal title of the property of a public charitable trust vests with the trustees. Trustees of a public charitable   trust may not, however, in any way use trust property or their position for their own interest or private advantage.
Trustees may not enter into agreements in which they may have a personal interest that conflicts or may possibly conflict with the interests of the beneficiaries of the trust (whose interests the trustees are bound to protect).
Trustees may not delegate any of their duties, functions or powers to a co-trustee or any other person, except that trustees may delegate ministerial acts. In essence, trustees may not delegate authority with respect to duties requiring the exercise of discretion.
Trustees of religious or charitable trusts are charged with discharging their duties with the degree of care that an ordinarily prudent person would exercise with respect to his personal property.
Indian public charitable trusts are generally irrevocable. If a trust becomes inactive due to the negligence of its trustees, the Charity Commissioner may take steps to revive the trust.
  If it becomes too difficult to carry out the objects of a trust, the doctrine of cy pres, meaning "as near as possible", may be applied to change the objects of the trust.
Thus, it appears that grantors can feel fairly secure that the charitable nature of a trust will be honored, even if the original, specific purposes of the trust cannot be carried out.

Atrust involves three types of parties -- the settlor, the trustee, and the beneficiary. The settlor is the person who establishes the trust including determining the original trustee and the beneficiaries, what property is in the trust, and what rules govern the duties of the trustee. The trustee is the person (or persons or company) that manages the trust. The beneficiaries are the people who receive the income (or property) or property from the trust.
Beneficiaries fall into two categories. The first category is income beneficiaries -- these are the people who receive the annual income earned by the trust. Depending on the wishes of the settlor that income can be for a certain period of time or for the life of the beneficiary. The second category are the principal (or residual) beneficiaries. These are the people who receive the remaining assets of the trust when it is dissolved (typically by the ending of the last income beneficiary whether through death or the end of the term of years).

 
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