Start a Trust / Society for School

To start a school in India one has to begin with forming a TRUST/ Society. 

Q.1 Can an individual start a School without forming a Trust/Society?

The existing norms stipulate that educational Institutions must be run as service to the community. Accordingly, the opening of new schools in the private sector and subsequent affiliation with State Education Board / CBSE /CISCE, is permissible only if they are established by a registered Welfare / Charities / Educational Trust or Society. Therefore, any individual / organization / association / society willing to open a new school, requiring recognition of the State Government and affiliation with any State / Central Board will have to constitute a Non-Proprietary Trust / Society, duly registered under Indian Trust Act-1882 or Society Registration Act – 1860. Now CBSE also permits Companies registered under Sec 8 (Section 25 companies are called as Section 8 companies as per the Companies’ Act 2013) to establish schools. Details are available with

Q.2 What is the procedure for constitution & registration of Trust /Society?

Some of the salient points for constitution / registration of the Trust / Society are given below: –

  1. a) Finalize the name of Trust / Society and fix the official location for operation of the Trust / Society.
  2. b) Finalize the name of the chairman & another minimum of two members of the Trust or seven in case of Society. The members of the Trust should not be blood-related to each other to ensure proprietary character of the Trust.
  3. c) Obtain the electricity connection and landline telephone connection and open a bank account in the name of the Trust / Society.
  4. d) Submit the relevant official documents for registration of the Trust / Society to the Assistant / Deputy Charities Commissioner of the area / district, where the office of the Trust / Society is located.
  5. e) If required, seek local assistance from any legal / non-legal person experienced in registration of the Trust / Society.
  6. f) Apply for Income Tax exemptions under various sections, including 80 G and 12 A.

Q.3 How many minimum members are required to form a Trust/Society?

A Trust can be formed and registered with a minimum of 03 members and a maximum of 21 members. In case of Society, minimum of 7 members are required.

Q.4 What is the kind of Trust/Society required for a school project? What are the conditions put by CBSE / ICSE to form a trust?

Any Religious / Welfare / Educational Trust or Society can set-up Institutions for school / professional / medical / engineering education for service to the society, provided this aim has been mentioned in the Trust Deed or Society bye-laws. The Trust should be of a Non- proprietary character so that it does not vest control in a single individual or members of a family.

Q.5 Is it necessary to form a Trust/Society?

Yes, it is absolutely necessary to form a Trust for setting up a School. As per CBSE / CISCE bye-laws, the schools administered and managed by a registered Trust / society are only eligible for affiliation with these Boards. Of late, CBSE also permits Companies registered under Sec 8 (Section 25 companies are called as Section 8 companies as per the Companies’ Act 2013) Details are available with LIFE EDUCARE PVT. LTD..

Q.6 What is the purpose of forming a Trust/Society rather than running a school by an individual?

As per the rules in force, no part of the income accrued from the school shall be diverted to any individual in the Trust. The Trust / Society has to ensure that the saving after meeting all recurring expenditure in the school shall be utilized for providing additional facilities / infrastructure in the school. Thus commercialization of education can be avoided, if the schools are managed / administered by the registered Trust / Society.

Q.7 i) Can the members of the same family become members of the Trust?

  1. ii) Can the Blood Relations form a Trust?

The husband, wife, son, daughter singly or jointly can be the members of the Trust provided that they do not vest control of the Trust. In other words, if the husband as well as the wife (2trustees), are the members of the Trust, then the Trust should have another 3 to 4 trustees who are not members of the same family, to prevent the husband-wife team vesting the control of the trust. Thus the total membership of the Trust in this case will have to be enlarged to 5 or 6 Trustees, out of which 3 to 4 Trustees should not be from the same family. Likewise, in case a trust is constituted with husband, wife and son / daughter (three trustees), then the Trust will have to have another 4 to 5 trustees, who are not the members of the same family.

84 thoughts on “Start a Trust / Society for School

  • we are in a process to form a society for running a school , the initial material in the website is help ful but we need more details …

    • No it can’t. You have to be a ‘Not for Profit’ Trust / Society /Sec 25 Company to run an Education institute in India.

  • my father and mother are the founder trustees of a newly school we opened. can my brother and me be trust members?? how many trust members should we have in this case?
    should all the names of the trust members be declared in the trust deed ?? through affidavit. Becuz the trust deed that was made states only my father and mothers name. is it ok

  • If the trust and society have the same rules, why are they two different entities?
    Who decides the renumeration of the principal etc? Can trustees be the chairman or the principal of the institution we wish to run under it?
    What happens to the earned unspent profit of the trust at the time of dissolving it?

    • Dear Ms Sheetal,
      Two different entities are there so as to serve to different purpose and the working in also different.
      The remuneration of the Principal has to be decided by the Members of the Trust / Society.
      One of the trustee / member will have to be the chairman but they cant be Principal.
      On the unspent profit, the Bye Laws of the Trust / society has to clearly mention what will happen in that case. Most of the time it is mentioned that the amount will be donated to a similar organisation.

  • good after nooon sir,
    Sir in my locality there is no cbse school. i m very much interested to open a cbse school in my locality. i. e. in kakatpur belong to puri dist. of odisha state.
    i. 1st i have to form a trust.
    ii. Then to open a school. which should be free from every side.
    iii. how can i get fund to run the school.

    • Dear Mr Dixit,
      As far as funds are concerned, you can take help from a Nationalised Bank which will help you with your project finance. Kindly get i touch with a competent Chartered Accountant who can help you with DPR and connections. at Life Educare we help promoters with this facility.

  • Dear Sir,
    I have a welfare society in this My Brother and My Brother in law is President and Secratory. I m a member in the can i become and of them like President, Secretory, Vice-Presidend etc in same Society or Not?

  • Dear sir a school run by madhya pradesh society registration act 1973, last two year but sir mainly my question is this i applied pan card with the help of C.A. sir C.A. keep category Trust so Sir i am confused why chartered accountant keep society category Trust. I think Association of Person is the correct category.
    so sir please reply me.

    • Mr Khan, The question is not very clear they way you have described here, Can you kindly rephrase and ask. Thanks.

  • Dear Sir,
    1) I am already a Director of a Private Limited Company registered by us. I am now looking to open a school also. Since a trust or society has to be formed, may I also be the Chairman of the newly formed trust for educational purposes (in addition to the existing Director position in a Pvt Ltd Company)?

    2) If the trust is registered in one location (of TN state) and is it allowed to open a school in different location (within the TN state) or both the trust registered and the location of the school must be same?

    3) How is the remuneration of the Chairman, Principal, members of the trust decided?

    Kindly give a note please.

    • 1) I am already a Director of a Private Limited Company registered by us. I am now looking to open a school also. Since a trust or society has to be formed, may I also be the Chairman of the newly formed trust for educational purposes (in addition to the existing Director position in a Pvt Ltd Company)? – Yes you can do that, no issues with that.

      2) If the trust is registered in one location (of TN state) and is it allowed to open a school in different location (within the TN state) or both the trust registered and the location of the school must be same? – The Bye Laws of the trust has to mention that.

      3) How is the remuneration of the Chairman, Principal, members of the trust decided? – Chairman can’t withdraw a salary but can get some reimbursements, whereas members don’t earn anything. The Salary of the Principal is decided by the Society / Trust based on market conditions. The minimum state pay grade has to be respected.

  • I m president of a soc which is running a private school. Now as i have a pan card of soc so account can be opened with the name of soc. So how to have name of school in my current account.? Nd how to collect cheques with school name as account is with the name of soc.

    • You have to open another bank account and tell the bank about the PAN card. This is allowed, kindly show a resolution passed at the monthly meeting of the society and the minutes of the same.

    • Yes certainly you can start a school this is what you have to follow;
      2. Buy or lease appropriate size land based on the affiliation parameters or as per your vision
      3. Get the map approved– Make the construction
      4. Hire Staff
      5. Get it affiliated from the State Board
      6. Start the School

  • i want to open school own my land for social work how is it happend plz inform to me .i belongs from bihar samastipur dist village muriyaro i have 28 khatta plot my mob no 9654775092

    • Yes certainly you can start a school where you please to. This is what you have to follow;
      1. Start a Society / rust / Section 8 Company
      2. Buy or lease land
      3. Get the map approved– Make the construction
      4. Hire Staff
      5. Get it affiliated from the State Board
      6. Start the School

  • Presently I am working in Public Sector Undertaking Company govt. Of India. I always wanted to do something good for the society starting from village. Can I open a private cbse school for those children who can’t afford to go to school. I want to resign my job and open a school of my own. What do I need to do?

    • Dear Mr Debbarma,
      Yes certainly you can start a school where you please to. This is what you have to follow;
      1. Start a Society / rust / Section 8 Company
      2. Buy or lease land
      3. Get the map approved– Make the construction
      4. Hire Staff
      5. Get it affiliated from the State Board
      6. Start the School

  • I have one educational institute for some professional training. But don’t have any registration. What should be the procedure to register under Government. I am from West Bengal

  • My wife is opening a preschool in partnership with a neighbour who is providing the place. My wife will be the main teacher and will be hiring assistance if required based on no. of enrolment. After spending on study material and assistance, she plans to divide the remaining amount equally with the place owner. Since preschool will have to be registered as non-profit trust, how should these two shares be shown in account books so that they are not interpreted as profit. We do not want to use the term salary / rent because of their fixed value whereas the gross and net income of the preschool will vary based on enrolments and expenses.

      • Hi, Mine is a similar case as Mr. Kuldeep’s. I opened a Pre school 15 years back in partnership with a friend at her place. We had current account in a bank in the name of our school and would share profit. Now our state Govt has made it mandatory to seek permission through a Trust. All existing pre schools without permission have to apply newly to start a pre school through a Trust.
        *In this case, if we become trustees, how do we share profit?
        *Can we just seek permission through Trust and continue to run the school as we did earlier years?
        *Can we be trustees and be the teachers too in the school? Both of us are passionate teachers who taught and run the school all these years.
        Kindly reply. Thanks!

        • Hi Meera,
          *In this case, if we become trustees, how do we share profit? – You withdraw salaries.
          *Can we just seek permission through Trust and continue to run the school as we did earlier years? – Yes, you can
          *Can we be trustees and be the teachers too in the school? Both of us are passionate teachers who taught and run the school all these years.- Yes you can

  • Can a member of trustee for running school get salary for his service of teaching or administration?

    • For Teaching and for Administration, sure he can receive a salary. For him performing a role as a trustee or member of the society, he can only claim Reimbursements of the expense he or she has incurred while discharging his/her duties.

  • Hello,
    I want to help government schools of Tamilnadu (India) to improve their standards in education and infrastructure levels by taking funds from public and by using public man power (volunteers). I want to open an educational trust for this?
    1. Is it legally possible?
    2. What kind of educational trust I should open?
    3. How should I proceed with opening?
    4. I want to open a bank account on the name of the trust and manage funds, what should I do for this?

    • Answers to your queries
      1. Is it legally possible? – Yes you can do that. In the bye laws of the Trust / Society you will form, you can write the objective which you envisage as of now.

      2. What kind of educational trust I should open? – A regular trust with objectives as you have mentioned would do. You can custom-design your objectives as per you aims.

      3. How should I proceed with opening? – Contact the Registrar of Trusts and get the necessary documentation. Get a lawyer post that who can help you with legal things.

      4. I want to open a bank account on the name of the trust and manage funds, what should I do for this? – That is only possible once you have the certificate of incorporation form the Registrar.

      All the best

  • I am running preschool in Bangalore under franchise. Now as per latest guidelines the govt of Karnataka want us to form trust/society and to get preschool registered.
    1. Whether this registration can be done there by pvt. limited co/LLp partnership firm.
    2.Can the latest guidelines can be supplied in English as all the notifications are in Kanada.

    • 1. Whether this registration can be done there by pvt. limited co/LLp partnership firm. – No it can’t be done by a firm, it will be constituted by individuals

      2.Can the latest guidelines can be supplied in English as all the notifications are in Kanada. – Yes that can be done or managed.Speak to the department.

  • I want to open school for profit motive.
    I have read everywhere that school is for non profit ,so my question is what all are the ways to make profit other than drawing salaries .

      • Dear Abhiney Ji,
        Thank you for your reply, in this case at the latter time,
        can President/secretary/member of society/trust can become Principal of the institute?

        • For a School Principal in a CBSE School, he or she should not be related to anyone from the School Management Committee but can be a member of the society/trust /Company running the school

  • It’s very useful and knowledgeable website and thank you very much for same. Please answer for my queries. 1) shall I take my brothers or sisters or their children’s as a trustee to form the trust ??
    2) Any Agricultural land can donate to any trust or educational institutions ? if yes, is there any limitations in Acres please explain the procedures , if no , what is the other solution to takeover the land ??
    3) which type of NA Is required to construct the educational institutions buildings.
    4) How Can I purchase running education institutions?? And is it possible to change the old name of the trust? And is it possible to terminate all old trustees at a time then we add new trustees?

    • Answer to your queries;

      1) shall I take my brothers or sisters or their children’s as a trustee to form the trust ?? –
      Yes you can , make sure the Blood Relations do not comprise of the majority in the Trust.

      2) Any Agricultural land can donate to any trust or educational institutions ? if yes, is there any limitations in Acres please explain the procedures , if no , what is the other solution to takeover the land ??
      – The land has to be first converted ‘FOR EDUCATIONAL PURPOSE’ than only it could be leased by an individual to the society / trust. For CBSE the minimum requirement is 1.5 Acres.

      3) which type of NA Is required to construct the educational institutions buildings.
      – Don’t know what do you mean by NA, we guess you are asking the Land Usage – we have answers above – It should be ‘ FOR EDUCATIONAL PURPOSE’

      4) How Can I purchase running education institutions?? And is it possible to change the old name of the trust? And is it possible to terminate all old trustees at a time then we add new trustees?
      – This is a difficult question and one has to look at the structure of the institute on offer. Each one can have multiple ways of holding structures, hence not a standard reply. There is nothing called Termination, People will have to resign. For changing the name of the Trust, you will have to speak to a Lawyer.

  • If I am Chairman of a Trust and I also run a business through a partnership firm. Is it possible for my business entity to do business activity with the Trust. For example can my business entity sell products to the trust or do any service oriented business with the trust?

    • Yes it is possible. For example you own the fleet of buses which is providing conveyance facilities to students of your school.

  • Hi!

    is it mandatory for a society to be 3 year old for starting a school.

    If someone wishes to start a school in 2018-19, what should be the inception date of the society.
    Pls guide

  • Sir ,im intreted to open a cbse school in my native,chirala ,in prakasam dist,a.p.
    So i need to form trust and want to implent d idea ,so i want full detail and help and suggestions from ur side sir .about how,what’s d process and all.
    Thanq

  • I am running preschool in telangana under franchise under partnership firm
    … Can i continue likw this or i need to register as a trust compulsary.. What should be requirememts for registration under trust

    • Dear Sandeep,
      All the information is available with the registrar of the Trust in your state. Basically it would require Bylaws, Address Proof a note on aims and objectives.

  • Hi I am planning to open a primary school in Himachal. My father is a retired serviceman, I want him to run this as he has an ample of time.

    1. Now if i have to register a educational trust, where should I get this done?
    2. Can you suggest me the flow, I am new to the business world. After registration what steps need to be followed?
    3. Do I need state/CBSE affiliation for primary school?

    Regards,
    Nikhil A.

    • The flow will be as follows;
      1. Register a Trust / Society / section 8 company
      2. Buy or Lease Land more than 1.5 Acres if wanting to start a CBSE School
      3. Get the land diverted
      4. Get the map approved
      5. Start the construction
      6. Get Staff
      7. Get affiliation from Himachal Government & No Objection from Education Secretary Office
      8. Apply for CBSE if you want to

  • Hello ! am planning to start a trust with a purpose to get an ” Admission Centre ” of a university .The ad says the center will be sanctioned to a TRUST only.The center should have an academic counselor ,office assistant and a program coordinator All other infrastructural facilities should be there besides the staff .But there is no mention about the years of service in the field .I take this clause is suitable to me and taking advantage of this , planning to start a Trust and hope I can do justice to the cause.Kindly advice me whether my thinking is in the right direction .thanks.

  • Please suggest in the case

    A director of society has died, His wife become director with resolution passed in General meeting.

    it is mandatory to report the for such changes to registrar of society / trust & and make changes in their records ?

    • There is no director in a Not for Profit society, if you wanted to say Chairman (the head of the society) than in that case, in case of death society can pass a new resolution internally and decided on a new chairman. Minutes of the meeting can be sent to the Registrar office.

  • We have formed a Trust to establish and run a school.
    What are the permitted sources of funding?
    Can the Trust borrow from the Trustees or Trust members and pay market related interest to them?
    Can the Trust borrow from banks?
    Are there any limits on borrowing by Trusts engaged in running schools?
    Can the Trustees or Members of the Trust hold positions in Academic and Non-Academic fields in the school run by their Trust?N
    Can the Trustees or Members of the Trust take remuneration for the services rendered to the School in teaching, administration etc.? If so, are there any limits?

    • Dear Sir,
      Answers to your questions;

      What are the permitted sources of funding? – Any body can give money as unsecured loan to the trust.
      Can the Trust borrow from the Trustees or Trust members and pay market related interest to them? – Replied to your question
      Can the Trust borrow from banks? – Yes, this happens in almost all the cases.
      Are there any limits on borrowing by Trusts engaged in running schools? – Banks and NBFCs will take care of that.
      Can the Trustees or Members of the Trust hold positions in Academic and Non-Academic fields in the school run by their Trust?N – Yes he or she can
      Can the Trustees or Members of the Trust take remuneration for the services rendered to the School in teaching, administration etc.? If so, are there any limits? – NO they can’t take remuneration but a reimbursement is possible.

  • Can the Members and Trustees of a Trust running a School lend money to the Trust on interest? If so, are there any restrictions on rate of interest?

    • Yes, The members can give UNSECURED LOANS to the society or trust and can agree to give interest on the same. Rate of Interest should be within prevailing and logical limits.

  • Sir,we run pre-school& now we want start 1 standard so what we do for start 1standard required any noc for this from any department.

  • Dear sir,

    I wanted to understand if the trustees of the school constitute the governing board or it’s seperate from the trustees

  • my mother is a chairman in a trust. but her name in trust deed and in other documents like adhar and pan are different. how can i change that. pls guide

  • Kindly clarify the following:
    1. Our Trust registered for starting and running Educational Institutions is having 3 Trustees who are all blood relations/family members. Is it mandatory that majority of the Trustees should be other than blood relatives? If so, how many more Trustees other than blood relations/family members are required to be inducted – 3 or 4? Can they be related to the Managing/other existing Trustees? Can they be related to each other?
    2. Who are construed as blood relations/family members in this context?
    3. Can the Managing Trustee or other Trustees lease their land and building etc. to the Trust for starting and running Educational Institutions and take rent from the Trust/Educational Institutions? If yes, what is the permitted rent? Is market related rent permitted?

    • Dear Mr Vishwnatham,
      Here are answers to your queries;
      1. Our Trust registered for starting and running Educational Institutions is having 3 Trustees who are all blood relations/family members. Is it mandatory that majority of the Trustees should be other than blood relatives? If so, how many more Trustees other than blood relations/family members are required to be inducted – 3 or 4? ——> Te majority of the members i.e. more than 50% should be un-related to each other. So if it is a trust of 7 people, it should be 4 and likewise.

      2. Who are construed as blood relations/family members in this context? – Same blood line. In-laws and cousins etc are not considered blood line. Wife is considered blood line.

      3. Can the Managing Trustee or other Trustees lease their land and building etc. to the Trust for starting and running Educational Institutions and take rent from the Trust/Educational Institutions? If yes, what is the permitted rent? Is market related rent permitted? – Yes the managing trustees can lease it out, market rents are permitted.

  • Dear sir
    I want know about trust member. I already made a trust have of my mother, me, two sister. Is problem for opening of new school because they asking trust member should be same family member.

    • Dear Sir,
      The Trust can not have a proprietary character which means one family (blood-line) cannot comprise majority of the membership.

  • Hi, got good amount of info by reading all the comments above.
    i have a question too, I am planning to start a preschool in Surat, Gujarat. But all the preschools here are run on proprietor or partnership basis. where do i find out if it is actually required by law to set up a trust or is it fine to start on my wife’s name as she will be running most of the show.

    • For Pre Schools, still you can start proprietor or partnership basis. For Schools i.e Class I – Class XII, you need to have Society or Trust or Section 8 Company.

  • Dear sir,
    We are planning to open school
    We don’t have trust, if we are going to buy land, better under trust name or first buy land after can registerd which is the best

    • Both the things can be done, first you can buy in your own name and than lease it out to the TRUST for a period of 30 e years. In this way you can earn out of land in your personal capacity. If multiple parties are involved as investors, you can form a trust and than you can buy the land on Trust’s name. You will be saving time on the Lease formalities and attached costs.

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