What is a Society?
According to the Societies Registration Act, 1860, a Society is a form of an NGO. It is an organization formulated by a group of people generally for the promotion of a common cause without any monetary gain. Such causes may include:
- Endorsing science, literature, fine arts
- Disbursing effective knowledge
- Providing charitable help
- Formulating military orphan funds
- Establishing and maintaining libraries or reading rooms
- Establishing or maintaining public museums or galleries
- Undertaking social welfare and development
- Other charitable causes
Such form of organization is governed by the Societies Registration Act, 1860. This type of organization can have a wide membership. And its activities are managed by a body of individuals elected periodically.
Thus society is a body of elected individuals who are accountable to the members of the society. Further, it may also have powers to delegate the day-to-day functions of the society to its full-time staff.
Also, a society is quite similar to a Trust in its character. However, there are certain differences between the two forms of organization.[/vc_column_text]
Accordingly, a minimum of 7 individuals are required to register a society as against 2 individuals in case of a Trust.
Also, the registration application to be filed with the registrar of companies must include the Memorandum of Association. Furthermore, it should also contain rules and regulations of the society. Thus, the Memorandum must contain the following components:
- Name, area and address of the registered office of the society
- Name of members of the governing body
- Objects and names of promoters
Also, a document containing rules pertaining to termination of members, meeting of the society etc also needs to be submitted.
Advantages of a Society
- After getting registered, a Society is deemed as a separate legal entity.
- A society holds the right to lease, rent, buy or sell property; borrow money or enter into legal contracts in its own name.
- Society members are not personally liable for any debt or obligations. Unless the debt is obtained for activities undertaken to make a profit. Or the activities undertaken are illegal in nature.
- A Society is entitled to income tax exemption
Disadvantages of a Society
- Income Tax Department extends tax exemptions to societies for charitable part of activities undertaken by societies.
- This form of organization is certainly inappropriate for operations that need to be carried out for profit motive. This is because a society can function only for a charitable purpose.
- No system of equity investment or ownership exists for societies.
- Further, investors are reluctant to invest in societies as these organizations lack professionalism.
- Since societies are considered unincorporated bodies as per law, they are not allowed to accept deposits from public. Also, they are not allowed to collect savings from clients.
Registration of a Society
You need to apply for the registration of a society in the area of the registered office of your society. Following is the procedure for Society registration under Society Registration Act:
Choose an Appropriate Name for the Society
This is the first step in registering a Society. You must be careful while selecting a name as the Societies Registration Act 1860 prohibits using similar or identical names. That is the name of your society should not be similar to the names of other societies already into existence.
Additionally, the name so suggested should not come under the restricted list of names. This is as per the provisions of the Emblems and Names Act, 1950.
Formulate Memorandum of Association (MOA)
MOA represents the charter of the Society. It defines the relationship of its founding members with the other members of the society. MOA specifies the objectives for which such a Society is formed.
Such a document should be signed by each of its founding members. Further, the signing of the document must be in the presence of the following witnesses:
- Oath commissioner
- Notary Public
- Gazette Officer
- Chartered Accountant
- First Class Magistrate
Also, the MOA must have the official stamps and the complete address of each of the witnesses as well as the founding members. It must also include a table containing the (i) names, addresses and occupations of all the members of the society and (ii) the members of the general body along with their signatures.
Documents Required to be Submitted at the Time of Registration
Following are the documents required for registration of a ‘society’:
- PAN card of all the members of the society to formulated
- Proof of residence of all the members of the society. This can include Aadhaar card, driving licence, passport, utility bill.
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Cover Letter requesting registration of society signed by all the founding members
- Proof of the registered office address of the Society (electricity/water bill or registration certificate)
- Non Objection letter signed by the landowner
- Certified copy of duly passed resolution for registration of society
- Declaration by the President of the Society
- List of all the members of the governing body along with their signatures
Submission of Documents and Registration
The applicant must submit two copies of the MOA along with the rules and regulations document to the concerned registrar of societies within the state. Along with these documents, the applicant must also submit the requisite fees as specified by the state government.
Then, the Registrar signs the first copy as acknowledgement and returns it to the applicant after receiving application. But he keeps the second copy for approval. Once the registrar is satisfied with the documents filed, he issues an incorporation certificate and allots a registration number to the same.