Trust

This query is : Resolved

Elton Sukumar M (Querist)

10 July 2010 A tust is formed in 1997.

A snapshot of the trust is:-

Year of Formation:- 1997

PAN No:- Available

Sec 12A registration:- Not available. Apllied in the year 200 but did not follow up

FCRA Registration:- Not available.

Type of Income:- Foreign Contribution from individuals

Bank account:- SB account closed three months (Bank closed the account) back for non receipt of FC registration number.

Books of Accounts:- Not available of any of the years.

Question:-

1) Should the trust be closed formally and open a new trust.

2) Should the existing trust be ignored and open a new trust

3) Should we continue with the existing trust.

CA Debasish Banerjee

CA Debasish Banerjee (Expert)

11 July 2010 Since it is a charitable trust you should opt for the following remedy

1. Create a new trust with similar objects and get all legal documents ready for the new trust ( 2nd Trust )

2. Go for the total completion of formalities ( as you might land up with two defaulting trusts )for the 2nd trust

3. Transfer the net assets ( after liquidating the liabilities which may be through payment or no due declaration from the creditors ) of the 1st trust to the 2nd trust vide a resolution of the 1st and subsequent acceptance of the 2nd.

4. Try to narrate the full course of facts and action and try to narrate all matters of imporatnce and do not hide any facts in the resolution.

5. Once you have the assets transferred and no liabilities in the 1st trust close the trust vide the resolution mentioned above and surrender all registration and PAN. A person should be authoried by the trust to complete the closing formalities.

You should take the help of an Advocate to draft your legal documents and resolution will guiding you through the process.

MAIN COURSE
YOU CAN CLOSE THE TRUST BY TRANSFERRING ITS ASSETS TO A TRUST PURSUING SIMILAR OBJECTS