Overview of Society Registration

A Society is an organization formed by a group of individuals with common goals, working together for a specific purpose. Typically, Societies are registered to promote charitable causes such as culture, art, sports, education, music, and religion. In India, the Society Registration Act of 1860 governs the registration and operation of such organizations. The Act was introduced to enhance the legal framework for the registration of societies dedicated to the advancement of science, literature, fine arts, and charitable activities. This Act has been adopted by various state governments across India, with some amendments.

To register a Society in a particular state, the founding members must adhere to the conditions outlined in the Act. After registration, the Society must comply with post-registration regulations to ensure ongoing legal compliance.

Purpose of Society Registration

As per Section 20 of the Society Registration Act, 1860, a Society can be registered for the following purposes:

• Providing charitable assistance
• Collecting natural history specimens
• Creating funds for military orphans
• Collecting mechanical and philosophical inventions, instruments, or designs
• Providing charitable aid
• Promoting or disseminating useful knowledge
• Establishing and maintaining libraries or reading rooms
• Establishing and maintaining public museums or galleries
• Promoting fine arts
• Advancing political education

Benefits of Society Registration

1. Legal Entity Status: A registered Society gains legal recognition, allowing it to operate as a distinct entity separate from its members.

2. Property Rights: The Society can buy, sell, rent, or lease property in its own name.

3. Continuity: Even if membership changes, the Society remains an independent entity, ensuring its ongoing existence.

4. Tax Exemption: A registered Society can avail itself of Income Tax exemptions, providing financial benefits for non-profit activities.

5. Liability: In case of unlawful activities, members are responsible for paying any debts or obligations. However, members are not personally liable for the Society's debts unless they are incurred with the intention of obtaining personal financial gain.

6. Compliance with Legal Standards: Incorporated Societies must meet the minimum requirements set by the Incorporated Societies Act of 1908, offering assurance and protection to members.

7. Bank Accounts: A registered Society can open and operate bank accounts under its own name.

8. Official Recognition: Society registration grants the organization official recognition from government authorities and other relevant forums.

Key Points of Society Registration in India

• Minimum Membership: A Society in India requires at least seven members to be eligible for registration. In addition to Indian citizens, foreign nationals, companies, and other registered societies can also participate in the formation.

• MoA and Rules: The founding members must agree on the Society’s name, draft the Memorandum of Association (MoA), and establish the Rules and Regulations governing the Society’s activities.

• State-Specific Registration: Society registration is managed by state governments. The application must be submitted to the relevant authority in the state where the Society’s registered office is located.

• Registered vs. Unregistered Societies: Similar to partnership firms, Societies can be either registered or unregistered. However, only registered Societies have the legal capacity to hold property and engage in legal actions, either as plaintiffs or defendants.

Documents Required for Society Registration in India

The following essential documents are required for registering a Society in India:

1. PAN Cards: The PAN card of all members of the Society must be submitted along with the application.

2. Residence Proof: Proof of residence for all the members of the Society must be provided. This can include a bank statement, utility bill, passport, Aadhaar card, or passport copy.

3. Memorandum of Association (MoA): The MoA must include:

   • The objectives and purpose for which the Society is being established.
   • The registered office address of the Society.
   • Information about all the founding members of the Society.

4. Rules & Regulations of the Society: The Society’s rules and regulations must be prepared and should include:

   • Guidelines for the governance and daily operations of the Society.
   • Information about the appointed auditors.
   • Procedures for dissolution of the Society.
   • Membership rules and procedures.
   • Dispute resolution mechanisms (arbitration) among members.
   • Details about the frequency and nature of Society meetings.

5. Address Proof: Proof of the registered office address of the Society must be provided, along with a No Objection Certificate (NOC) from the landlord, if applicable.

6. Covering Letter: A covering letter stating the objectives for which the Society is being formed must be attached. This letter must be signed by all founding members.

7. List of Governing Body Members: A detailed list of all governing body members, including their signatures, must be submitted.

8. President’s Declaration: The President of the Society must provide a declaration confirming their willingness and capability to hold the position.

Procedure for Society Registration

Step 1: Choose a Unique Name
The first step is to select a distinct name for the proposed Society. Ensure that the name is not similar or identical to any existing registered Society or corporate entity. If you wish to use the name of an already existing Society, you must obtain written consent from the relevant party and submit it to the Registrar.

Step 2: Draft the Memorandum of Association (MoA)
Each founding member of the Society must sign the Memorandum of Association, which should include the Society's Rules and Regulations. This document must be witnessed by a legal authority such as a Notary Public, Chartered Accountant, Oath Commissioner, Gazetted Officer, First Class Magistrate, or Advocate, who must provide their official stamp and address.

The Memorandum must include the following clauses:

• Name Clause
• Objectives Clause
• Registered Office Clause
• Details of the Executive/Governing Body, including names, occupations, and addresses

The Rules and Regulations should be endorsed by the President, Vice President, and Chairman of the Society and must cover:

• Structure of the Society
• Member termination terms
• Details of office bearers
• Audit and compliance requirements
• Meeting provisions
• Legal dispute resolution procedures
• Sources of income for the Society
• Membership and subscription details
• Election rules
• Dissolution procedures

Step 3: Prepare Other Required Documents
In addition to the Memorandum, you will need to prepare several supporting documents, such as:

• Cover letter
• Minutes of the founding meeting
• Declaration of compliance
• Identification proof of members as per the Society Registration Act, 1860

Step 4: Submit Documents to the Registrar
Once all necessary documents are in order, submit them to the concerned Registrar in your state, along with the applicable registration fee. If the Registrar finds the information to be valid, they will register the Society. You can track the status of your registration on the official website of the Ministry of Corporate Affairs. The registration process typically takes about one month to complete.

Post-Registration Compliances for Societies

Once your Society is registered, the following compliance steps must be fulfilled:

1. Annual Income Tax Filing: The Society must file income tax returns annually.
2. GST Registration (if applicable): If the Society's activities are subject to Goods and Services Tax (GST), it must complete the registration process.
3. Obtain PAN Card: The Society must secure a PAN card for tax-related purposes.
4. Bookkeeping and Accounts: Regular bookkeeping and accounting practices must be maintained.
5. Open a Bank Account: A dedicated bank account must be opened in the Society's name.
6. Professional Tax Registration (if applicable): If applicable, the Society should register for professional tax.
7. Compliance with RoF (Registrar of Firms): The Society must file annual resolutions, disclose accounts, and submit an updated list of members to the Registrar of Firms (RoF).

Tax Exemption for Societies

Similar to other legal entities, a Society is liable for taxes. However, it can avail of tax exemptions by obtaining 80G Certification from the Income Tax authorities. This certification allows the Society to offer tax exemptions on donations received, provided the Society is engaged in charitable activities.

Limitations of Society Registration

While registering as a Society offers many benefits, there are also certain limitations:

1. Tax Exemptions for Public Trusts Only: Only Public Trusts can enjoy full tax exemptions, provided they are recognized as being engaged in charitable activities by the Income Tax department.
2. Equity Investment and Ownership Restrictions: Societies cannot raise equity investment or ownership, limiting the ability to attract commercial investors interested in ventures like microfinance.
3. Lack of Professionalism: Societies often lack formal professional structures, which can hinder growth and management efficiency.
4. Limited Investment Appeal: Due to the lack of professionalism and managerial practices, Societies are often seen as risky by commercial investors, deterring bulk investments.