Family Trust & Section 8 Company Services

Family Trust & Section 8 Company Setup

Setting up family trusts for succession and asset protection, or Section 8 Companies for non-profit objectives – drafted by a Chartered Accountant working alongside legal counsel.

Quick Summary

Family trusts and Section 8 companies sit at the intersection of personal law, company law, and income-tax. Done correctly, they provide multi-generational succession planning, asset protection, and tax-efficient charitable activity. Done poorly, they become compliance burdens that surface during scrutiny. We structure these alongside legal counsel – we do not draft the trust deed (lawyer’s domain) but we do design the structure, tax positioning, and ongoing compliance.

Strategic Fit: Is this right for you?

Family Succession

HNI families structuring multi-generational wealth transfer.

Asset Protection

Insulating family wealth from business / professional liability.

Special Needs Beneficiary

Trust for a beneficiary requiring lifetime support.

Charity Vehicle

Section 8 Company for structured non-profit activity.

Foundation Structure

Where corporate structure beats unincorporated trust for governance.

CSR Vehicle

Section 8 Company as CSR-implementing vehicle for corporate donors.

Final Deliverables Checklist

Everything you receive at the end of the engagement.

UNDERSTANDING THE THREE VEHICLE CHOICES

Family Trust (Trust Act 1882)

Private trust for family beneficiaries. Settlor transfers assets to trustees who hold for beneficiaries. Flexible. Stamp duty on trust deed applies. Income tax under Sec 161 / 164.

Section 8 Company (Companies Act 2013)

Non-profit company. MoA + AoA + INC-12 + CDA. Stronger governance than trust. Best where corporate structure / large funding / CSR vehicle role required.

Society (Societies Registration Act 1860)

Registered society. Membership-driven. Common for educational / cultural organisations. State Act variations matter.

The Engagement Lifecycle

Process Name	Description	Typical Timeline
Scoping Call	Purpose, beneficiaries / objectives, capital, geography	60 min
Structure Memo	Trust vs Sec 8 vs Society - tax + compliance comparison	1-2 weeks
Deed / MoA Drafting	Alongside legal counsel	2-3 weeks
Registration	Trust registration (sub-registrar) OR INC-12 for Sec 8	2-4 weeks
Sec 12AB + 80G	Income tax registration for exemption + donor deduction	2-3 months
Bank + PAN	TAN, PAN, bank account opening	2-3 weeks
Compliance Setup	ITR-7, audit calendar, FCRA if needed	Ongoing

Transparent Pricing Structure

Statutory & Third-Party Costs – pass-through, NOT our fees

These are paid directly to government departments, certifying authorities, and banks. They are not VRS professional fees.

Trust deed stamp duty (Maharashtra): Rs 500-Rs 1,000+ (depending on assets)
Sub-registrar registration fee: ~Rs 100-Rs 500
Section 8 Company INC-12 + incorporation: ~Rs 5,000-Rs 10,000 government fees
Sec 12AB + 80G registration: nil government fee
FCRA registration (if needed): nil government fee + bank charges

Engagement & Fees

We handle private trust and Section 8 setup end-to-end — deed drafting/structuring, registration, and ongoing compliance — scoped to your objectives during an initial scoping call.

Fees are confirmed per engagement after the scoping call, based on the scope and complexity involved. You receive a clear, written quote before any work begins — no hidden charges.

Quoted per Engagement

The final quote depends on the scope, volume, and statutory complexity of your specific engagement.

Frequently Asked Questions

Trust or Section 8 Company - which one?

Trust for closely-held family wealth / private succession. Sec 8 Company where corporate governance, large funding / CSR vehicle role, or institutional perpetuity is needed.

Is Sec 12AB registration mandatory?

For income tax exemption under Sec 11 / 12 – yes. Without 12AB, the trust / Sec 8 Company is taxed as a normal AOP or company. 12AB needs renewal every 5 years.

What is 80G and why does it matter?

Section 80G allows donors to claim 50% / 100% deduction for donations made to 12AB-registered + 80G-approved entities. Without 80G, donors do not get deduction.

Can a family trust own shares in our family company?

Yes. Common structure for closely-held businesses. Trust holds shares for benefit of family. Voting rights exercised by trustees per trust deed terms.

Stamp duty on trust deed - how much?

Varies by state. In Maharashtra, typically Rs 500-Rs 1,000+ depending on assets being settled. For settling immovable property into trust, stamp duty is materially higher (per property).

Do we need FCRA registration?

Only if the trust / Sec 8 Company intends to receive foreign contribution. FCRA registration takes 6-12 months. Strict ongoing reporting compliance.