Rules to convert society into trust

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CA SHANU AGARWAL

CA SHANU AGARWAL (Querist)
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06 February 2015 Please somebody tell me the process to convert society into trust in Rajasthan

Aashok Kumar Sharma online

Aashok Kumar Sharma online

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22 July 2025 Converting a Society into a Trust isn’t a straightforward or common legal process because a Society and a Trust are two distinct legal entities governed by different laws:

Societies are registered under the Societies Registration Act, 1860 (or respective State Societies Acts).

Trusts are governed by the Indian Trusts Act, 1882 (private trusts) or state-specific public trust laws.

Important Points:
You cannot directly convert a registered Society into a Trust because they have different legal frameworks and registration authorities.

Instead, the common approach is to wind up (dissolve) the Society and then create a new Trust.

Alternatively, some assets and functions of the Society can be transferred to a Trust.

General Steps for the Process in Rajasthan:
1. Dissolution of Society
Follow the Rules of the Society’s bye-laws regarding dissolution.

Usually, the Society members pass a resolution to dissolve the Society.

Submit the dissolution application to the Registrar of Societies (Rajasthan).

Settle all liabilities and distribute assets according to the Society’s rules.

2. Creation of Trust
Draft a Trust Deed specifying:

Name of the Trust

Objects/purpose of the Trust

Details of trustees

Mode of administration

Powers and duties of trustees

Get the Trust Deed signed by the settlor(s) and trustees.

Register the Trust Deed with the Registrar of Trusts or Sub-Registrar office under the Indian Trusts Act or Rajasthan Public Trust Act (if it is a public charitable trust).

Pay the registration fee as per Rajasthan state law.

3. Transfer of Assets (if any)
If the Society has immovable or movable assets, pass resolutions to transfer these assets to the newly created Trust.

Execute necessary transfer deeds.

Follow legal formalities for property transfer under the Transfer of Property Act.

Additional Notes:
Consult the Rajasthan Societies Registration Act and Rajasthan Public Trust Act for detailed procedural requirements.

Seek professional advice from a lawyer or a consultant experienced in NGO or charitable organization law in Rajasthan.

Ensure compliance with income tax and other regulatory aspects if the entity is registered under charitable tax exemption schemes.

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