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Business Standard
06-08-2025
- Business
- Business Standard
Top Legal Mistakes New NGOs Make: And How to Avoid Them
Non-Governmental Organizations (NGOs) are born from a powerful vision for social change. However, translating that vision into sustainable impact requires navigating a complex web of legal and regulatory compliance in India. New NGOs, with their passion often outweighing their legal acumen, frequently fall into common pitfalls that can jeopardize their mission, funding, and even their very existence 1. Choosing the Wrong Legal Structure This is perhaps the most fundamental mistake. New NGOs often don't fully grasp the implications of their initial registration choice. India offers three primary legal forms for NGOs Trusts: Governed by the Indian Trusts Act, 1882, or state-specific trust acts. Generally simpler to register and manage, but can have limitations on perpetual succession and ease of making changes. Societies: Registered under the Societies Registration Act, 1860, or state-level acts. Require a minimum of 7 members and are typically managed by a governing body. Offer more democratic functioning. Section 8 Companies: Registered under the Companies Act, 2013, by the Ministry of Corporate Affairs (MCA). These are non-profit companies that can engage in commercial activities to further their objectives, with profits reinvested, not distributed. They offer higher credibility, better governance frameworks, and easier scalability. How to Avoid: Don't rush this decision. Thoroughly research each structure's implications regarding liability, governance, funding sources, and future expansion plans. Consider your long-term goals. For comprehensive guidance on initial setup, explore services like NGO Registration online to help you choose wisely. 2. Delaying or Ignoring 12A and 80G Registration Many new NGOs incorrectly assume that simple registration makes them tax-exempt or allows donors to claim deductions. Section 12A Registration: Grants income tax exemption to the NGO on its income, provided it is applied towards its charitable objectives. Without 12A, all income, even donations, is taxable. Section 80G Registration: Allows donors to claim a tax deduction (typically 50% or 100%) on the donations they make to your NGO. This is a significant incentive for donors and crucial for fundraising. How to Avoid: Apply for 12A and 80G right after registering your NGO to ensure tax benefits and boost fundraising opportunities 3. Neglecting FCRA Compliance for Foreign Funding Receiving foreign donations is a common goal for many NGOs, but it comes with strict regulations under the Foreign Contribution (Regulation) Act (FCRA), 2010. Mistake: Receiving foreign funds without a valid FCRA registration, or violating FCRA rules even after registration. This can lead to severe penalties, freezing of bank accounts, and even blacklisting. How to Avoid: Never accept foreign donations without a valid FCRA registration. Open a separate FCRA bank account (specifically designated as an FCRA account at a State Bank of India branch). Ensure timely annual FCRA filings (Form FC-4) detailing all foreign receipts and expenditures. Maintain meticulous records of foreign contributions and their utilization. 4. Poor Financial Management and Record-Keeping Many NGOs operate with passion but lack robust financial systems. Mistakes: Mixing personal and organizational funds. Lack of proper accounting books (receipts, payments, ledgers). Not conducting regular internal audits. Failing to comply with TDS (Tax Deducted at Source) rules on payments made. Not providing proper donation receipts to donors. How to Avoid: Set up a proper accounting system from day one. Use a dedicated bank account for all transactions. Follow TDS rules and issue 80G-compliant donation receipts. Ensure annual audits by a Chartered Accountant as required. 5. Overlooking Annual Compliance Filings Beyond tax and FCRA, NGOs have annual filing obligations based on their structure. Mistakes: Missing deadlines for annual returns with the Registrar of Companies (for Section 8), Registrar of Societies, or Charity Commissioner (for Trusts). Not holding mandatory board/governing body meetings. Failing to maintain statutory registers. How to Avoid: Create a compliance calendar tailored to your NGO type, assign filing duties, and refer to NGO Annual Compliance resources to avoid penalties and stay active. 6. Inadequate Governance and Documentation While not directly a "legal" mistake, poor governance can lead to legal issues. Mistakes: Lack of clarity in the roles and responsibilities of board members/trustees. Not maintaining proper minutes of meetings (Board, General Body). Absence of a well-defined Memorandum of Association (MoA) / Trust Deed / By-laws outlining objectives and rules. Lack of transparency with stakeholders. How to Avoid: Establish clear governance policies, define board roles, and document meetings & resolutions. Conclusion Starting an NGO is a noble pursuit, but sustaining it requires meticulous attention to legal and financial compliance. The initial choice of legal structure sets the foundation for all subsequent obligations. By avoiding common mistakes like incorrect registration and delayed filings, new NGOs can stay compliant.
Fashion Value Chain
01-08-2025
- Business
- Fashion Value Chain
Cube Highways Trust Declares Q1 FY26 Results; Declares Total Distribution of Rs. 2.5 per Unit
Cube Highways Trust ('Cube InvIT') [NSE/BSE: CUBEINVIT/543899], managed by Cube Highways Fund Advisors Pvt. Ltd. (the 'Investment Manager') today announced its results for the quarter ended June 30, 2025. The Board of Directors of the Investment Manager has approved a Distribution Per Unit (DPU) of Rs. 2.50 for the quarter. The total distribution for the quarter amounts to Rs. 336 crores. It comprises Rs. 1.33 per unit as interest and Rs. 1.17 per unit as return of capital. Pankaj Vasani, Group CFO of Cube InvIT, stated, 'We are delighted to announce a strong start to the third fiscal year (post-listing), with our Q1 financial results reflecting solid growth across key performance metrics. Revenue from operations stood at Rs. 9,443 Mn, up 19.2% YoY, with total consolidated income at Rs. 9,739 Mn. Traffic trends remained stable to positive across most corridors. While toll revenue grew 10.3% YoY, traffic growth saw an increase of 6.3% YoY. Despite portfolio expansion, total expenses were largely stable at Rs. 9,755 Mn. EBITDA rose to Rs. 7,016 Mn, an improvement of 22% YoY. Total Assets Under Management (AUM) rose to Rs. 365 Bn, up Rs. 43 Bn during the quarter. Liquidityremainedstrong,withcashandcashequivalentsat Rs. Rs. 192.12Bn (49.62% ofEV),wellwithinthepermissible thresholds. TheTrustalsoissuedcommercialpaperworth Rs. 13.3 Bn in Q1 to optimise short-term funding while taking tangible steps to reduce the overall financing cost. We continue to deepen our focus on governance, compliance, and alignment with unitholder interests. Our approach remains forward-looking, combining risk management with value creation to sustain unitholder trust.' The record date for the distribution is August 4, 2025, and the distribution payout will be made on or before August 11, 2025. About Cube Highways Trust Cube Highways Trust ('Cube InvIT') is an irrevocable Trust set up under the Indian Trusts Act, 1882 and registered with the Securities Exchange Board of India (SEBI) as an Infrastructure Investment Trust. It is backed by a diversified investor base, including I Squared Capital, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), British Columbia Investment Management Corporation, and Abu Dhabi's sovereign investor Mubadala Investment Company. Cube Highways Trust is engaged in implementing the public-private partnership ('PPP') model in the country's highways sector to operate and manage highway projects in association with the central and state governments. Investors can view the outcome for the quarter ended June 30, 2025, along with other relevant disclosures on the websites of Cube InvIT ( the BSE Limited ( and the National Stock Exchange of India Limited ( For more information, please visit: Media contact: corpcomm@
Mint
28-07-2025
- Business
- Mint
A matter of trust: Private trusts are not a tax-saving hack. When should you set one up?
A private trust sounds like a billionaire's trick to stash wealth in offshore havens. But it's actually a clean, underrated structure for Indian families juggling succession, asset protection, or care for vulnerable loved ones. Think of it as a rulebook for your wealth, not a secret vault. Trusts often beat joint ownership or HUFs (Hindu undivided families) for clarity. But they're not for everyone and definitely not a tax-planning tool. So, when should you set one up? A private trust is a legal arrangement governed by the Indian Trusts Act, 1882. In simple terms, you (the settlor) hand over assets to someone you trust (the trustee) to manage for someone else (the beneficiary). You can wear all three hats – settlor, trustee and beneficiary. The trust deed is the operating manual, spelling out who gets what, when and how. There are two main types of trusts: Specific trust : Beneficiaries and their shares are fixed, like a family recipe. : Beneficiaries and their shares are fixed, like a family recipe. Discretionary trust: The trustee decides how and when to dish out the assets, like a chef improvising in the kitchen. Not every family needs a trust, but it can solve problems that aren't just about money. These pertain to: Minor children or dependent parents If you're gone tomorrow, who manages your assets for them? A trust lets you decide who handles the money, how it's used, and when the beneficiaries get it, avoiding probate or succession fights. Family member with special needs Trusts secure long-term funds for those who can't manage finances, preserving dignity and rights. They can also be structured for slab-rate taxation. Business or marital disputes Discretionary trusts shield assets from creditors, family feuds, or ex-spouses. Not bulletproof, but stronger than joint holding or nominees. HUF feels too rigid HUFs have rigid succession rules and legal baggage. Trusts offer flexibility as you control who manages and benefits, without unintended rights. Smooth succession for real estate or NRO/foreign assets Trusts bypass probate (for wills) or succession certificates (no will), which can take months. For NRIs, they ease cross-border transfers. Example: Imagine a business owner with two minor kids and a family home in Pune. By setting up a specific trust, they appoint their sister as trustee to manage the property and business income, ensuring the kids get funds for education until age 25, while shielding assets from business creditors. Trusts are not a tax hack. In aspecific trust, income from the corpus or assets in the trust is taxed in the beneficiaries' hands, as if they earned it directly (e.g., ₹ 3 lakh split among three beneficiaries). In adiscretionary trust, where the trustee decides distributions, income is taxed at the maximum marginal rate (42.744% including surcharge and cess) if beneficiaries or shares are indeterminate, per Section 164 (1). Consult a tax expert to structure it right. Trusts with taxable income must file returns, maintain books, and comply with PAN, TDS and investment rules. Transferring real estate may attract stamp duty, varying by state. The trust deed may also need registration under the Registration Act, 1908, in case of immovable property. A trust is a structure for control, continuity and avoiding chaos—not a tax loophole. A poorly drafted trust can cause more headaches than it solves. You wantcontrol and clarity after you're gone You havefamily-specific needs like special care, blended heirs or conflict-prone succession You're holdingsubstantial assets across entities and want a single long-term vehicle to manage them Don't use one if: You're just trying to save tax Your family setup is simple and straightforward You won't invest in good legal drafting and compliance Most families keep assets in their own name because, well, that's just how dad did it, and grandpa before him. But inheritance today isn't a matter of trust, it's a matter ofTrust (with a capital T). A private trust is not some billionaire's loophole. It's a well-documented, regulator-approved way to make sure your wealth reaches the right (intended) people at the right time, without the wrong surprises. Work with a professional advisor to draft a robust trust deed and stay compliant, avoiding costly fumbles. If you don't want your family to fight over your money, give them a rulebook, not just a balance sheet. CA Vijaykumar Puri, partner at VPRP & Co LLP, Chartered Accountants
Mint
12-06-2025
- Business
- Mint
Cube Highways Trust completes acquisition of 2 highways in J&K from NIIF for ₹4,185 crore
The National Investment and Infrastructure Fund (NIIF) and Cube Highways Trust (Cube InvIT), which are both managed by Cube Highways Fund Advisors Pvt. Ltd, announced on Thursday the successful transfer of two operational annuity road projects from NIIF to Cube InvIT at an enterprise value of ₹ 4,185 crore. The two assets being transferred, Quazigund Expressway Pvt. Ltd (QB) and Athaang Jammu Udhampur Highway Pvt. Ltd (JU), spanning approximately 80km and located in Jammu and Kashmir. QB is one of the longest bi-directional tunnels in India, while JU is an essential link between Jammu and Srinagar. These assets have a residual concession life of over six years and are backed by fixed semi-annual annuity payments from the National Highways Authority of India (NHAI), providing stable and predictable cash flows that are insulated from traffic risks. The total enterprise value (including cash) of the two assets has been reported at ₹ 4,185 crore, subject to all closing adjustments as specified in the share purchase agreement (SPA), Cube Highways Trust said in a statement. "We are pleased to collaborate with NIIF on this important transaction. Today's acquisition will add to the high-quality, pan-India portfolio and enhance the Trust's exposure to fixed-revenue annuity assets that are unaffected by traffic risks and economic cycles. It also showcases Cube InvIT's disciplined capital allocation strategy and prudent use of its balance sheet for acquiring de-risked assets with strong fundamentals. This transaction is expected to be accretive to net distributable cash flows by ₹ 2.3 per unit annually, on average, over the next five years,' Vinay C. Sekar, chief executive officer (CEO) of Cube InvIT, said. Pankaj Vasani, Group chief financial officer (CFO) of Cube InvIT, said, "The strategic addition of these two completed and revenue-generating annuity assets optimally complements our existing portfolio of assets and grows the annuity exposure. Following this transaction, annuity revenue will account for 33% of Cube InvIT's total revenue. With a net debt to AUM ratio of 49% (post transaction) and a AAA-rated credit profile from Crisil, Icra and India Ratings, Cube InvIT remains well-positioned to pursue further value-accretive acquisitions.' Vinod Giri, managing partner, master fund, NIIF, said this transaction reflects NIIF's ability to underwrite complex transactions and acquire large infrastructure assets, de-risk them with a comprehensive plan, improve the credit profile, and create value. "These assets strongly reflect the core competency of Athaang, the wholly owned roads platform of NIIF, in managing high-quality infrastructure assets with operational excellence through best-in-class systems and processes. This track record enables us to deliver strong returns and attract global institutional capital.' Cube Highways Trust is an irrevocable Trust set up under the Indian Trusts Act, 1882 and registered with the Securities Exchange Board of India (Sebi) as an Infrastructure Investment Trust. It is backed by a diversified investor base, including I Squared Capital, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), British Columbia Investment Management Corp. and Abu Dhabi's sovereign investor Mubadala Investment Co. Cube Highways Trust is engaged in implementing the public-private partnership model in the country's highways sector to operate and manage highway projects in association with the Union and state governments.
Mint
02-06-2025
- Business
- Mint
India must streamline rules for the institutional trustee industry
India's wealth management ecosystem is undergoing rapid transformation, with institutional trustees playing a pivotal role in safeguarding assets, enabling succession, and ensuring fiduciary compliance. Yet, the regulatory framework governing institutional trustees remains fragmented and outdated, exposing the system to significant risks. As the volume of wealth under institutional trusteeship soars—estimated in the range of tens of thousands of crores—there is a pressing need to establish robust, uniform regulations to protect all stakeholders and foster sustainable industry growth. Also Read: How PPFAS is trying to change wealth management with simple advice Institutional trustee services in the country are primarily governed by two main statutes: (i) The Indian Trusts Act, 1882, which provides the foundation for the creation, administration, and duties of trustees in private trusts; and (ii) SEBI (Debenture Trustee) Regulations, 1993, administered by the markets regulator, specifically governing debenture trustees. Despite these frameworks, there is no comprehensive, unified regulation or certification regime for all institutional trustees, especially those operating outside the debenture and securities space. This regulatory gap exposes the industry to inconsistencies and serious risks. Why institutionalization is the need of the hour Enhanced professional standards and accountability: Institutionalising the industry would introduce mandatory certification, training, and ongoing education, similar to how chartered accountants (CAs) are regulated by the Institute of Chartered Accountants of India (ICAI). CAs must pass rigorous exams, adhere to a code of ethics, and undergo regular peer reviews, ensuring high professional standards and accountability. This structure has led to greater public trust and fewer instances of malpractice in the accounting profession. Improved transparency and investor protection: A regulated institutional trustee industry would require robust disclosure norms, regular audits, and transparent reporting, reducing the risk of fraud, mismanagement, or conflicts of interest. As seen in the CA profession, regulatory oversight deters unethical behaviour and builds investor confidence. Uniformity in practices and reduced legal ambiguity: Currently, the lack of standardization leads to varying practices and legal uncertainties, particularly in private trusts and family offices. Regulation would harmonize procedures, documentation, and dispute resolution mechanisms, reducing litigation and confusion. Better risk management and systemic stability: With thousands of crores of wealth under trusteeship, unregulated practices pose systemic risks to the wealth management and financial services sectors. Regulation would enforce risk management protocols, capital adequacy norms, and contingency planning, safeguarding both beneficiaries and the broader economy. Also Read: Can this mid-cap company take the lead in the exploding $1.2 trillion wealth management business? Facilitated market growth and global competitiveness: A regulated and institutionalized trustee industry would attract more domestic and international capital, as investors prefer jurisdictions with clear rules and protections. This would enable Indian trustees to compete globally and foster innovation in trust structures and estate planning. International precedents: Lessons from abroad UK: The UK's trust industry is regulated by the Financial Conduct Authority (FCA), which mandates licensing, compliance, and anti-money laundering checks. This has resulted in a transparent, reliable, and globally respected trustee sector. Singapore: The Monetary Authority of Singapore (MAS) regulates trust companies, ensuring high standards of governance and investor protection. This has made Singapore a preferred hub for wealth management and family offices. US: Trust companies are state-licensed and subject to regular audits and capital requirements, ensuring safety and soundness for beneficiaries. In all these jurisdictions, regulation and oversight has benefited all stakeholders—trustees, beneficiaries, and the financial system—by reducing fraud, enhancing professionalism, and boosting investor confidence Risks of delayed action in India If India does not move swiftly to institutionalize and regulate its institutional trustee industry, the following risks loom large: Increased incidents of fraud and mismanagement: Without oversight, unscrupulous operators can exploit loopholes, leading to financial losses for beneficiaries and reputational damage to the industry. Legal and operational risks: Ambiguities in trustee duties and the lack of oversight can result in costly legal disputes, delays, and reputational damage. Loss of investor confidence: High-profile scandals or disputes could deter both domestic and foreign investors from using Indian trustee services. Regulatory arbitrage: Inconsistent rules could lead to regulatory arbitrage, where entities exploit gaps between different legal frameworks, undermining the integrity of the financial system. Systemic risk: The sheer quantum of wealth under trusteeship—estimated to be in the range of several lakh crores—means that failures could have ripple effects across the financial sector. Competitive disadvantage internationally: India may lose out on attracting global capital and trust business if it does not adopt internationally recognised governance standards. Also Read: Mastering wealth management: The role of psychology in decision making and financial success The institutional trustee industry in India stands at a crossroads. While there are a handful of institutional trustees currently operating per global best practices, several are not. To protect the vast wealth under their stewardship and to foster a robust, transparent, and globally competitive wealth management ecosystem, there is an urgent need to institutionalize and regulate trusteeship. Establishing a certification or regulatory body would professionalize the sector, protect stakeholders, and unlock long-term benefits for trustees, mirroring successful international models and established Indian professional bodies. Tanmay Patnaik is partner-private client practice at Trilegal.
