Section 316: Application to be made for establishment of trust

1) A person who intends to establishment of trust shall make an application, setting out the following matters, to the Registrar:

(a) Value and details of the property held for the trust,

(b) Beneficiary, and benefit and facility to the beneficiary, the terms and limitations thereof,

(c) If the trust is to be established for any particular period, any matter relating thereto,

(d) Other necessary details.

2) In making an application pursuant to sub-section (1), the following documents shall also be submitted with the application:

(a) Memorandum of incorporation of the trust,

(b) Trustee’s name and photocopy of the deed relating to his or her consent,

(c) Photocopy of the deed, if any, executed for the establishment of the trust,

(d) Photocopy of a reliable deed relating to the trust settler’s identity, and, in the case of the trust settler being a body corporate, certified copies of the documents relating to the incorporation of the body corporate and of the decision by such a body corporate in relation to the establishment of the trust.

(e) Receipt of payment of the fees chargeable by law for the registration of a trust.

Explanation: For the purposes of this Chapter:

(1) “Registrar” means the authority provided for by law for the registration, supervision, and liquidation of trusts, and this term also includes the Land Revenue Officer in the concerned district if such authority is not so provided for.

(2) “Trustee” means the person who is responsible for the operation and management of a trust property.

3) Notwithstanding anything contained in sub-section (1), if any person has, by way of his or her oral behaviour, conduct, or a testamentary gift or will, provided for the operation and management of a property in which he or she has right, ownership and possession as a trust, the trust shall be deemed to have been established by such behaviour, conduct or will.

Provided that in the case of a property requiring registration for the transfer of its title in accordance with law, a deed about such transfer has to be registered.

4) If a foreign person intends to establish a trust, the person shall make an application, upon fulfilling the procedures as referred to in sub-sections (1) and (2). A foreign person may be the founder of the trust to be so established.

Provided that a foreign person is not allowed to establish a trust for the accomplishment of the object referred to in clause (l) of sub-section (2) of Section 315.

5) At least one-third of the trustees of a trust established pursuant to sub-section (4) shall be Nepali citizens having permanent residence in Nepal.