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What is Society Registration?

When group of individuals unite to accomplish common purpose, it is referred as Society. Society Registration Act, 1860 governs the Registration of Society. When a Society registers, it becomes legal entity. Additionally, it brings uniformity in the way of working of Societies which helps in better governance too. It is mostly formed to carry out activities like scientific/charitable or literary works. The purpose of Society Registration can be underlined as it enables to give boost to legal conditions of Society. It also helps Society to get a legal status in India. In other words, it becomes a legal entity.

Significance of Society Registration

It is said that Society Registration helps in improving civic life of the people of the country. The imperative aspect for Society Registration is that minimum seven members or more can create Society. Memorandum of a Society can be subscribed by Company/ people or Registered Society but it happens only in case Company/ people or Registered Society does not belong to India. It becomes applicable only when Company/ people or Registered Society who stays in foreign location expresses interest.

Advantages enjoyed by Society after its formation

  • Society gains a status of a legal entity.
  • Sell, buy, rent as well as Right to lease are the facilities that can be availed by a Society.
  • A membership of a Society may change but it will continue to be a separate entity.
  • Income Tax exemption can be availed by a Society if a Society is incorporated.
  • In case of unlawful activities, the members are held to pay the debts as well as obligations.
  • In case of profit, if debts and obligations are incurred by members for the purpose of obtaining money, the members are liable to pay else members can’t be held liable.
  • Incorporated Society is required to meet minimum requirements which are set by Incorporated Society Act 1908 which gives an assurance to members of the Society.
  • The bank accounts can be opened by Society.
  • Society gains recognition in front of Forums as well as Authorities.

 Society also needs to bear certain limitations which are as follows

  • Only Public Trusts can enjoy Tax exemptions provided they are considered to be engaged. in charitable activities according to Income tax department.
  • The possibility of Equity Investment as well as ownership is ruled out in case of Societies as they can’t go for it. Thus, it keeps commercial investors at bay who want to indulge in Microfinance.
  • It lacks in professionalism.
  • The managerial practices are not followed mostly.
  • The commercial investors consider it as a risky investment which deters them to invest in bulk.

Which are the documents required for Society Registration?

The following documents are required for Society Registration-

  • Society’s name
  • Office’s address proof
  • Driving License/ Aadhaar/ Voter ID/ Passport of the nine members of Society as an identity proof
  • Memorandum of Association (two copies)
  • Society Bye-laws (two copies)

How does Company formed basis Section 25 of Company Act, 1956 differ from Society which is established in accordance with Society Registration  Act, 1860

Attributes

Company formed basis Section 25 of Company Act, 1956

Society established in accordance with Society Registration  Act, 1860

Status of Legal Entity

It attains a status of legal entity

Certain limitations apply although it becomes a legal entity

Goodwill

A Goodwill is enjoyed by Company

Society is at par in terms of goodwill as Company

Levy of penalty

More penalty is imposed on Company as Company Act lays stringent norms

The penalties are less compared to Company

Provision of meeting

Company Act, 1956 lays provisions for meetings

Society Registration  Act, 1860 lays provisions for meetings

Compliance & Management

The compliance as well as management is complex in addition to being time consuming

The compliance and management of Society is relatively easy

Selection of Name

Registrar of Company approves the name of Company

The name selection of Society is not difficult

Motive

Activities of non- profit nature are undertaken

The literary as well charitable activities are undertaken mostly

Creation & formation

There is a complex process for creation of  Company

It is easy as well as simple

Step by Step procedure for online Society Registration

online Society Registration process

Society can be formed with a minimum 7 or more persons. Besides that, even foreigners and Companies can register for the Memorandum of Society. Authorities of State Government administer the Registration process of a Society. To undertake the online procedure, one needs to visit the official portal of MCA:

  • Select Unique Name – The applicant must conduct comprehensive research to file a unique name for the proposed Society. One needs to ensure that the name is not deceptively similar or identical to another incorporated Society/Corporate body. In case you choose an existing name of a Society, then the party must provide written consent to the Registrar.
  • Draft the Memorandum of Association – Now each establishing member of the Society must sign the Memorandum with Rules and Regulations of the Society. It should be witnessed by Notary Public, Chartered Accountant, Oath Commissioner, Gazetted Officer, First Class Magistrate or Advocate with their official stamp and complete address. 

The Memorandum must contain the clauses given below:

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

Rules and Regulations of the proposed Society should be certified by the President, Vice President and Chairman of the Society. It must specify the aspects mentioned below:

  • Constitution of the Society
  • Terms of Member’s Termination
  • Details of the Office Bearer
  • Audit Compliance
  • Provision of the Meetings
  • Provisions of Legal Disputes
  • Income Source of the Society
  • Membership & Subscription
  • Election Norms
  • Society’s Dissolution
  • Prepare other necessary documents -Documentation plays a vital in the Society Registration criteria. Hence, affix the documents of Cover Letter, Minutes of the Meeting, Declaration, ID Proof, as prescribed by Society Registration Act, 1860.
  • File documents with the concerned Registrar – Once you have prepared all the documents, submit it to the concerned Registrar of your State with the fee. If the Registrar feels that your provided information is valid, then he will declare your Society as registered. You can check Society Registration status on the official website of Municipal of Corporate Affairs. Generally, it takes around one month to register the Society.

What are the precautions while keeping a name of Society?

The precautions that one should keep in mind in finalizing the name of Society are as follows-

  • The name of Society should be as per the rules laid out by Society Act, 1860 which states if identical name is selected, the Authority will reject it.
  • The name should not be against State Government/ Government of India.
  • The name should abide by Emblem and Names Act, 1950.
  • No word or phrase must be included which goes against Government/Community.

What all should be included in Memorandum of Association?

Memorandum of Association includes list of things which are mentioned below-

  • Society’s name
  • Society’s Registered Office
  • Society’s operational area
  • Society’s aims as well as objects
  • Directors and other Council details
  • Governing body
  • Desirous persons

Importance of Society Registration 

Section 20 of Societies Registration Act, 1860 defines the fundamental purposes to incorporate a Society: 

  • To grant charitable assistance;
  • Create Military Orphan funds;
  • Promote Science, Literature & Fine Arts;
  • Diffuse or promote Political Education and useful knowledge; 
  • Foundation and maintenance of Reading Rooms or Libraries, Galleries or Public Museum;

Who can apply for Society Registration?

Society Registration Act, 1860 has set a list of candidates who are eligible for Society Registration. Minimum 7 or more members are required to create a Society.

Following are the members who can enrol for the Memorandum of a Society: 

  • Foreigners or a non-resident of India
  • Partnership Firm
  • Limited Company
  • Registered Societies
  • A minor (below the age of 18 years) is not eligible
  • Foreign & Indian Companies

What all attributes should Rules and Regulations include?

The attributes that should be included in Rules and Regulations are as follows-

  • Society’s Constitution
  • Membership as well as Subscription
  • Members Termination
  • Office Bearer details
  • Society’s source of income
  • Election Norms
  • Audit Compliance
  • Provision of Meetings
  • Society’s Dissolution
  • Legal Disputes provisions

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In case of any questions or you wish to apply for Society Registration

Frequently Asked Questions on Public Limited Company Registration

When group of individuals unite to accomplish common purpose, it is referred as Society. Society Registration Act, 1860 governs the Registration of Society. When a Society registers, it becomes legal entity. Additionally, it brings uniformity in the way of working of Societies which helps in better governance too.

The purpose of Society Registration can be underlines as it enables to give boost to legal conditions of Society. It also helps Society to get a legal status in India. In other words, it becomes a legal entity.

Society Registration helps in improving civic life of the people of the country. The imperative aspect for Society Registration is that minimum seven members or more can create Society. Memorandum of a Society can be subscribed by Company/ people or Registered Society but it happens only in case Company/ people or Registered Society does not belong to India. It becomes applicable only when Company/ people or Registered Society who stays in foreign location expresses interest.

A membership of a Society may change but it will continue to be a separate entity

Income Tax exemption can be availed by a Society if a Society is incorporated

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