Somraj Narayan
Asked January 14, 2017

Procedure for setting up a trust

  • 1 Answer
  • 1184 Views

I need guidelines / procedures for setting up a trust for issuing and managing ESOPs for employees. We are a small company with around 100 staff.

Answer 1

  • Prepare a Trust Deed on stamp paper of the requisite value (8% of the value of property of the trust in Delhi. The rate varies from state to state). A Trust is formed under the Indian Trusts Act, and the Trust Deed is registered with the jurisdictional Sub-Registrar.
  • The ESOP Trust receives stock either from company by way of fresh allotment or by purchasing from existing shareholders in open market or the owner of the company may sell shares of his holding to the ESOP Trust. 
  • One passport size photograph & copy of the proof of identity of the settler
  • One passport size photograph & copy of the proof of identity of each of the two trustees.
  • One passport size photograph & copy of the proof of identity of each of the two witnesses.
  • Signature of settler on all the pages of the Trust Deed
  • Witness by two persons on the Trust Deed.
  • Other documents required

    • Detail of all members or trustees of the trust with their address and PAN no.
    • Certified true copies of the Institution’s Registration Certificate
    • Certified true copies of Laws & by-laws of the Institute
    • Copy of income tax registration certificate.
    • Audited Balance Sheet and Income & Expenditure account with Audit Report of last 3 years
    • The original copy of Trust Deed evidencing the creation of the Trust.
    • Shares of the company can be held by the Trustees is held as beneficial owners. Hence Form 22-B declaring beneficial ownership has to be filed with ROC. (Sec 153 of Companies Act).
    Agree Comment 0 Agrees almost 4 years ago

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