A society is an entity in which a group of individuals with similar interests come together for a common purpose. Societies are generally formed for the promotion of charitable causes like sports, music, culture, religion, art, education, etc. A society is also formed for the purpose of maintaining residential or commercial premises or of creating an apartment association.
The societies are registered and governed by the Societies Registration Act, 1860, and the society act is amended and regulated by the respective states.
There is no option of equity investment or ownership that exists for societies.
Society is usually for charitable activity, not for the profit motive.
As per the law, societies are considered unincorporated bodies. Therefore, they are not allowed to accept deposits from the public. Also, they are not allowed to collect savings from clients.
Society can avail tax exemption by obtaining 12 A and 80G certificates from the income tax department.
Elected members of society have the power to delegate the day-to-day functions of society to its full-time staff. Elected members are accountable to the members of society.
Furthermore, members of society are not personally liable for any debt or obligation incurred as a result of legal or financial errors. Unless the debt is obtained for profit-making purposes or the activities undertaken are illegal in nature.
What is required for the society’s registration?
- Society Name: The proposed name of the society must be unique. The proposed name should not be identical to the existing registered society name, the name of the society should not resemble the name of any country, state, or local authority; or the name should not be one of those which are prohibited under the Emblems and Names Act, 1950.
- Members: Under the societies act, There should be a minimum of 7 members.
- MOA: The rules and regulations of the society along with the Memorandum of Association must be registered at the registrar of societies of the respective jurisdiction and it must be certified by at least 3 members of the governing body.
The following clauses should be included in a MOA:
- The name and address of the society
- The object of society
- Complete details of the members and board members.
- Property management
- AOA: An Article of Association is also required for registering a society, following clauses should be included:
- The rules and regulations of society
- Maintenance of day-to-day activities
- Membership process
- How and when will the members’ meeting be held
- Audit process
- Arbitration, dissolution & Closure
- Registration fee: A very nominal fee is required to be paid to the registrar of the society. The fee differs from state to state, and no stamp paper is required for society registration.
- Documents: There will be a list of documents required for society’s formation. Documents need to be submitted along with a covering letter at the registrar of societies. Once the registrar is satisfied with the submitted documents, an incorporation certificate and a registration number is issued.
The following documents are required for Society Registration in India:
- Covering letter requesting registration of society.
- A PAN card of all the members
- Proof of residence of members (aadhaar card, driving license, passport, utility bill).
- Memorandum Of Association (MOA)
- Articles Of Association (AOA)
- The rules and regulations of society
- Address proof of the registered office of the society (electricity/water bill or registration certificate)
- No objection letter signed by the office premises owner
- Board resolution
- List of all the members including governing body member details, along with their signatures.
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What are the members’ rights in the society?
Members are entitled to vote, the right to receive notice of every meeting, a copy of bye-laws and the right to receive financial statements. Members have the right to attend. general meetings of societies.
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