What is Trust Deed ?
The instrument by which the trust is declared is called instrument of Trust, and is generally known as Trust Deed.
It is well settled that no formal document is necessary to create a Trust as held in Radha Soami Satsung vs. CIT- (1992) 193 ITR 321 (SC). But for many practical purposes a written instrument becomes necessary under following cases –
1. When the trust is created by a will irrespective of whether the trust is public or private or it relates to movable or immovable property. This is because as per Indian Succession Act, a will has to be in writing
MODEL TRUST DEED OF A PUBLIC CHARITABLE TRUST
THIS DEED OF TRUST executed on this _______________________ day of __________________ year 20____, _______________________ BETWEEN __________________________________________ (Party of the first part) hereinafter called " SETTLOR OF THE TRUST" ________________________________________________________
1. SHRI. S/O. SHRI , of ____________ &
2. SHRI. S/O. SHRI. , of ____________ &
3. SMT. W/O SHRI. , of ____________
(Hereinafter called " The Trustees" which expression shall unless repugnant to the context or meaning thereof be deemed to include the survivors or survivor of them and the trustees or trustee for the time being of these presents and their heirs, executors and administrators of the last surviving trustee, their or his assignees) of the other part;
WHEREAS the party hereto of the first part is possessed of the sum of Rs. ___________/- (Rs. __________ Only) as his absolute property and he is desirous of creating a Religious/ Charitable/Educational Trust for the benefit of the humanity at large.
AND WHEREAS each of the parties hereto of the "Other Part" has individually and jointly has agreed to act as Trustees of the Trust, proposed by the party of the first part.
AND WHEREAS nothing contained in this deed shall be deemed to authorize the trustees to do any act which may in any way be construed statutory modifications thereof and all activities of the trust shall be carried out with a view to benefit the public at large, without any profit motive and in accordance with the provisions of the Income-tax Act, 1961 or any statutory modification thereof.
AND WHEREAS the trust is hereby expressly declared to be a public charitable trust and all the provisions of this deed are to be constituted accordingly.
NOW THIS INDENTURE WITNESSTH AS FOLLOWS :
a. Educational – to run, maintain or assist any educational or other institution for coaching, guidance, conselling or vocational training or to grant individual scholarships for poor, deserving and needy students for elementary and higher education.
b. Medical – to run, maintain or assist any medical institution, nursing home or clinics or to grant assistance to needy and indigent persons for meeting the cost of medical treatment.
c. Relief of the poor – to give financial or other assistance in kind by way of distribution of books, notebooks, cloths, uniforms, or meals for the poor and indigent and to the persons suffer due to natural calamities.
d. Other objects of general public utility –
i. to acquire property for the sole use for public good by making it available for public purposes as for example, housing a library clinic, crèche and/or as a community ball to be available for public use as training classes, seminars, discourses and other public functions for benefit of the community in general.
ii. to undertake any other activity incidental to the above activities but which are not inconsistent with the above objects.
PROVIDED the Trust may assist/donate the other TRUST to carry out the various objects mentioned in the objects clause in such manner and to the extent the Trustees may decide upon from time to time.
i. All monies, which shall not immediately required for current needs shall be invested by the Trustees in eligible securities and investments, or in banks. Such investments shall be in the name of Trust or Trustees.
ii. That the trustees shall invest the trust fund, carry on any business with the trust fund and/or enter into partnership on behalf of the trust, as they may deem fit.
iii. That the trustees shall manage the trust fund and investments thereof as a prudent man would do the same. They shall recover all outstandings and meet all recurring and other expenses incurred in the upkeep or management thereof.
iv. That the trustees shall receive and hold the income of the trust on behalf and for the benefit of the beneficiaries under the trust.
7. POWER OF TRUSTEES
. to manage all the assets and/or properties of the trust including the conduct of business;
i. to appoint employees and to settle the terms of their service, remuneration and termination;
ii. to look into the management of the trust;
iii. to invest the funds of the trust, in bank or in the purchase of company shares or securities or other movable and movable and immovable properties;
iv. to sell, alter, vary, transpose or otherwise dispose or alienate the trust properties or any investment representing the same for consideration and to reinvest the same;
v. to pledge or mortgage the trust properties for raising loans;
vi. to open the bank accounts in the name and on behalf of the trust and to operate the same;
vii. To enter into a partnership on behalf of the trust with any other party or parties;
viii. To pay all charges, impositions and other outgoings payable in respect of the trust properties and also to pay all cost of the incidental to the administration and management of the trust properties;
ix. To file suit on behalf of the trust and to refer to arbitration all actions proceedings and disputes touching the trust properties and to compromise and compound the suits filed;
x. To accept any gift, donation or contribution in cash or in kind from anyone for the objects of the trust;
xi. To seek legal opinion of lawyers and/or Chartered Accountants as and when required;
xii. To nominate their representatives for any of the aforesaid purposes.
8. The number of the trustees shall not be less than two but not more than five.
9. In case of any difference between the trustees, the opinion of the minority shall
10. Every trustee will be at liberty to nominate or appoint attorneys or agents and to delegate all or any of the duties and powers vested in him to such attorney or agent, and to remove such attorney or agent and reappoint other or others in his place.
11. No trustee shall be responsible or liable for any loss or any act of omission or commission by his constituted attorney or agent or employees or other trustees unless occasioned by his wilful neglect or default.
12. Any of the trustees may retire on giving one month’s notice in writing to the other trustee(s).
13. If any trustee dies or retires or becomes incapable or unfit to act, the continuing or surviving trustee or trustees shall appoint a successor in the place of such trustee.
14. If at any time the number of the trustees is less than two, the existing trustee shall appoint one or more trustees.
15. Upon the appointment of a new trustee the trust properties shall vest in the new trustee jointly with the continuing or surviving trustees, with the duties and power of the trustees set out hereinabove in this deed.
16. If the trust is determined by efflux of time, the corpus of the trust shall be divided amongst the beneficiaries in the shares as fixed by the trusees.
17. BANKING ACCOUNT
18. ACCOUNTS AND AUDIT
. The Trustee shall keep proper books of account of all the assets, liabilities and income and expenditure of the Trust and shall prepare an Income and Expenditure Account and Balance Sheet for every year as on the last day of March.
i. The accounts of every year shall be audited by a Chartered Accountant or a firm of Chartered Accountants who shall be appointed for that purpose by the Trustees and the audited accounts shall be placed at a meeting of the Trustees, which shall be held before the end of the succeeding year.
21. WINDING UP
The Trustees shall be indemnified against all losses and liabilities incurred by them in the execution of the Trust and shall have a lien over the funds and properties of the Trust for such indemnity.
IN WITNESS WHEREOF, The Parties hereunto have signed and delivered the presents on the day and year first hereinabove written.
WITNESS : 1. TRUSTEE ____________
1. 2. TRUSTEE ____________
2. 3. TRUSTEE ____________