Because trusts are perpetual entities, the concept of deregistration was unknown up until 2016. However, in 2016, by ordinance and then by amendment, a specific provision for deregistration of registered trusts was enacted. De-registration proceedings do not involve Trustees’ willingness, whereas dissolution of trusts depends on the provisions of the Trust deed and involves mutual consent by the Trustees.
Trusts Can Be De-registered for the Following Reasons:
Subsection 3A of section 22 of the Maharashtra Public Trusts Act, 1950, provides for the de-registration of trust in five circumstances:
After an impartial and detailed inquiry, the Deputy or Assistant Charity Commissioner may deregister the trust registration process on the following grounds:
(a) at the end of its purpose; or
(b) as soon as its purpose becomes unlawful; or
(c) if its purpose is unable to be accomplished because the trust property was destroyed or otherwise; or
(d) if an express revocation of the revocable trust has been made; or
(e)Trustees are found to have failed to fulfill the trust’s object when they:
It is provided that no trust shall be de-registered under clause (e) unless its trustees have committed a default in reporting the change under subsection (1), in submitting audited accounts as prescribed by sections 33 and 34, or in fulfilling any other compliance prescribed by or under this Act for a period of five years from the last date of reporting the change, submitting the accounts, or fulfilling any compliance, as prescribed by or under this Act or its rules.
For De-registration, the Following Documents Are Required
- Trustees in place
- A meeting notice has been issued
- The number of attendees at the meeting
- The resolution of the meeting
- Yes/No – Movable property
- If you own movable property, yes or no
- There is any legal proceeding pending before any court or tribunal
- Documents originals of registration
- A detailed copy of the trust deed
- A schedule for the first quarter
The Following Grounds Can Be Used to Dissolve a Trust:
In accordance with section 77 of the Indian Trusts Act, 1882, a trust may be dissolved or extinguished if its purpose becomes unlawful. A public charitable trust, however, becomes irrevocable once it is properly constituted, regardless of whether it is voluntary or not. Consequently, a valid public charitable trust cannot be terminated or dissolved by law under the various Public Trusts Acts (including the Bombay Public Trusts Act, 1950). Nevertheless, the assets and liabilities of the trust may be transferred to another trust having similar objects, which allows it to be dissolved. However, revocable trusts may be dissolved according to their terms and conditions.
Trusts do not have to remain in their original form, and can be dissolved, varied, modified, or revoked as long as all of the beneficiaries consent to such a procedure.
For Dissolution of the Trust, a List of Documents is Required
- (Format given below): Schedule 3 – Notary before me/Registered Notary
- A notice and minutes are attached
- Acknowledgment received for notice
- A letter of consent
- Covering letter/Affidavit of Evidence
- 90-day delay affidavit (in case of time-lapse)
- Applying for a delay
- Affidavit of reporting trustee
- – Certified by an advocate in accordance with trust laws
- Documents informing the change, such as death certificates/ appointment letters
The last three years of audited financial statements and a copy of the ITRV filing.