Thursday, August 11, 2011

. Trust Deed-Clauses

A person drafting the deed of a public charitable trust has to bear in mind several enactments, particularly the Indian Trusts Act, any local enactment relating to trusts, like the Bombay Public Trusts Act for the State of Maharashtra and the Income tax Act. Such a person has also to keep in mind the relevant judicial pronouncements dealing with the scope of "charitable purpose" and accordingly decide whether a particular purpose is charitable or not. An instrument of Trust 
or association/institution created or established should contain inter alia the following clauses: 
0. Nothing contained in this deed shall be deemed to authorize the trustees to do any act which may in any way be construed as 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. 
1. The trust is hereby expressly declared to be a public charitable trust and all the provisions of this deed are to be construed accordingly. 
The Trust Deed generally contains the following clauses: 
2. Preamble 
3. Trust name by which Trust shall be known 
4. Place were its office shall be situated 
5. Author or settler of the trust
6. Names of the Trustees 
7. Beneficiaries 
8. The property settled, for Trust – In case of immovable property, it should contain full description of the property sufficient to identify it 
9. An express intention to direct the trust property from the trustees 
10. The objects of the Trust 
11. Minimum and maximum number of Trustees 
12. The procedure for appointment, removal, replacement of trustees 
13. Trustees rights, duties and powers 
14. Administration of trust 
15. Provision for maintenance of accounts, auditing etc. 
16. Clause enabling, spending and utilization of the Trust funds or corpus. 
17. Bank Account operations 
18. Borrowing money on security for the purpose of the Trust 
19. Investment of the Trust funds and dealing with Trust properties 
20. Alienation of immovable property of the Trust 
21. Amalgamation clause 
22. Dissolution of Trust 
23. Irrevocable nature of the trust.

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