In India, our ancestral were living on the policy of helping each other. They take responsibility for the welfare of their society, in which they are living. In Current time period due to increase in Expense level, a single person cannot take the responsibility for the welfare of society. Now, peoples having the same desire for welfare of society associate with each other and a little contribution from each one, accumulate a sum which is so enough, that a desire welfare activity can be done. These groups of person associate and this calibration will led to a formal legal entity in the form of SOCIETY.  In India, Societies are registered under Societies Registration Act, 1860.

After the introduction of CSR (Corporate Social Responsibility) provisions in Companies Act, 2013, number of societies desirous to get registration has increased with great pace. Now, we are going to discuss on the procedure “How to register a Society” and its compliance’s after Society Registration. Society Registration overview is giving on the basis of procedure adopted in Delhi which may slightly vary from State to State.

Procedure

Registration power of Society lies with Registrar of Societies. If a group of persons, desirous to do Social welfare activities like Promotion of Literature, Science or the Fine Arts or for the diffusion of useful knowledge or for charitable purpose, then they can approach Registrar of Societies to register their Society.

While forming a Society for charitable purpose, due consideration will be given to Sec-2(15) of Income Tax Act, 1961, which defines Charitable Purpose as:-

It is defined to include relief to the poor, education, yoga, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest and the advancement of any other object of general public utility.

This definition is very crucial while applying for Income Tax Exemptions. If your activity does not fall in the above definition then you may, have to pay tax on maximum marginal rate on the surplus during the year.

Points to be kept in mind while forming a society:-

1. Any seven or more persons associated for any Literary, Scientific, or Charitable purpose, may, by subscribing their names to a Memorandum of Association and filing the same with the Registrar of Societies form themselves into a Society under the Societies Registration Act, 1860.

2. Societies which propose to operate on all India bases should have one member each from at least seven states of the Union of India.

3. The Emblems Act, 1950 prohibits the use of any name, emblems, official seal etc. as specified in the Act without previous permission of competent authority. The Societies intending to seek registration are advised to consult this Act also before proposing the name etc. for registration

4. If the proposed name is identical with that by which any other society has been registered or resembles such name which is likely to deceive the public or the member of society, such name may be avoided.

5. The Memorandum of Association shall contain the following details e.g.:-

    • The name of the society;
    • The objects of the society;
  • The names, addresses, and occupations of the governors, council, directors, committee, or other governing body to whom by the rules of the society, the management of its affairs is entrusted.

6. A copy of the rules and regulations of the society, certified to be a correct copy by not less than three of the members of the governing body, shall be filed with the memorandum of association.

7. All the signatures of the desirous persons / subscribers given in the memorandum must be witnessed by an Oath Commissioner, Notary Public (Notarial stamps affixed), Gazetted Officer/Advocate or Magistrate 1St Class with their official rubber stamps and complete in all respect.

8. Please note member of the Governing Body cannot be outside the list of the desirous persons / subscribers to the memorandum.

9. The rules and regulations of the society should be filed along with the memorandum of association with registering.

10. If the rules and regulations of the society are inconsistent with provision of the Societies Registration Act, 1860 they are invalid and mere filing with registering authority for the purpose of registration of society cannot make them valid.

11. Affidavit on Rs.10/- (Rupees ten only) Non-Judicial stamp paper from the President or Secretary of the Society should be furnished regarding the relationship between the subscribers (desirous persons) to the Memorandum and also an affidavit that, the name of society will be changed if the said name already found registered in our records.

12. Rs. 50/- (Rupees fifty only) as the registration fee shall be demanded when formalities are complete and the Registrar of the Societies has approved the grant of registration.

13. Ration Card / Election Card or any other identity proof required in respect of all desirous persons.

Purpose of Society, working and governing structure must be properly defined in MOA And Rules & Regulation of Society.

Mandatory Compliance’s after Registration

A common problem has been observed after Society registration, is that, they does not follow the mandatory compliance’s after registrations, which may attract penalty to Society and its members along with Society registration may liable to cancellation. Every society has to work within the framework mentioned in MOA and rules/ regulation as described at time of Registration. Some of common non compliances are as follows:

> Non Conduct of Board Meetings & General Meetings

> Non Maintenance of Accounts Records

> Non Audit of Books of Accounts on Annual Basis

> No records of Minutes, if Board Meeting/ General Meetings Held

> Using of Society fund for Personal Use

> Non Intimation of Governing Body List on Annual Basis/ Change of Governing Body to Registrar of Societies

> Non Filing of ITR (Income Tax Return)

In above points, I have tried to elaborate some common errors which may attracts penalty. So, please take care of all rules and regulation as mentioned in Society MOA and Rules/ Regulation Chart.

This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persist kindly intimate us to avoid such error for the benefits of others readers.

The Author can be reached at mail –shivsharma786@gmail.com and Mobile/Whatsapp – 9911303737/ 9716118384

Author Bio

Qualification: CA in Practice
Company: Shiv Kumar Sharma & Associates
Location: Delhi, New Delhi, IN
Member Since: 03 Dec 2018 | Total Posts: 23
My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. I have Qualified my B.Com (H) in 2010 And Cleared CS- Executive Exam in June 2013. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. View Full Profile

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