Sign-in to your account
Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.
This article contains brief description of formation of a Society in India under the ‘Societies Registration Act, 1960’. In this article, I have tried to highlight the procedural formalities, important provisions of the act and various difficulties faced by a professional, while forming a society.
This act is a very important piece of law, as it regulates the formation of Society and its governance. A society can perform very significant rules in the wellbeing of civic life. Also this is a significant area of practice of cross section of professionals viz., CS, Advocates, etc .
Societies Registration Act, 1960 was enacted on 1960 and came into force on 6-6-1961, by replacing the earlier act. The purposes of the act is to improve the legal conditions of societies established for the promotion of literature, science, or the fine arts and to give them a legal status. Therefore, it is a fine piece of act which helps greater social development, harmony and public convenience without direct involvement of Government.
Societies Registration Act, 1960 was enacted before evolving the method of bifurcation of power between Central and States (Entry 32 of List II of Seventh Schedule) to the Constitution. After enactment of Entry 32 of List II of Seventh Schedule, which provides that unincorporated literary, scientific, religious and other societies and association is a state subject, normally their should be a state laws to regulate the activities of promotion of literature, science, or the fine arts. If in any state, no such law is enacted, then the Central act should be applicable. The Act has been specifically repealed in many States and those States have their own Acts.
Any seven or more persons associated for any scientific, literary or charitable purposes can apply for Registration of a society. No limit of maximum number of members is prescribed in the act. For registering a society, following documents needs to be prepared and submitted to the Registrar:
a. Memorandum of Association(MOA): Major Contents are Name of the Society, Working Area, Address of Registered Office, Aims and Object of the Society, Name address, occupation of the Governing body members, desirous persons
b. Rules & Regulation: Major contents are Name of the Association, Admissions of members, Subscription, Cessation of Membership, Rights and privilege of members, Powers and functions of General Body members, Meetings, Election, Power and duties of Office bearers, Quorum of meeting etc.
These documents needs to be certified by at least three members of the governing body and should be filled along with the MOA.
a. Proof of Identity & Address of Governing Body Members;
b. Address of the registered office and Consent;
c. NOC of the owner of the address of Registered Office Premises;
d. A fee of Rupees fifty is required to be paid.
Name of the Society should not be identical with any existing society, registered under the Societies Registration Act, 1960. The name of the Society also should not be undesirable.
In relation to a Society registered under Societies Registration Act, a member is a person who is admitted according to the rules and regulations of society and who pays subscription, or signed the roll or list of members, and who has not resigned from membership. A member can be sued as stranger for arrear in subscription or if he destroys the property of society. Member guilty of offence of stealing, embezzlement or willful destruction of society property can be punished as stranger, i.e. not a member.
Annual list of managing body to be filed
Once in every year, on or before the fourteenth day succeeding the day on which, according to the rules of the society, the annual general meeting of the societies is held, or, if it rules do not provide for an annual general meeting, then in the months of January, list, containing the names, addresses and occupations of the governors, council, committee, or other governing body then entrusted with the management of the affairs of the society shall be filed with the Registrar of Joint Stock Companies.
SOCIETY IS NOT A BODY CORPORATE
A society incorporated under the Act is not a body corporate. Following provisions of the act reflect the same:
i) As per the act, the assets of a registered society vests on the governing body of the society.
ii) Section 6 of the Act provides that suits by or against the society should be made in the name of the President, Chairman, Principle Secretary or the Governing body, as determined by the rules and regulations of the society, and in the absence of any clause in this regards in the Rules and Regulations in the name of such person as shall be appointed by the Governing Body.
iii) But, Section of 8 of the act makes it amply clear the though suit against society is to be instituted in the name of some persons, they are not personally liable, but the property of the society will be liable.
AMALGAMATION OF SOCIETY
Whenever it appears to the governing body of a Society registered under the Act, which has been established for any particular purposes, that it is advisable to amalgamate such Society, either wholly or partially, such governing body should submit the proposition to the members of the society in a written or printed form, and may convene a special meeting for consideration thereof according to the regulations of the Society.
The proposition should be forwarded to the members of the society before specified time period, as spelt of the act of the state, of the special meeting, convened for consideration of the propositions.
For carrying out the activities the consent of at least three-fifth of the members by person or by proxy, and the proposition must reconfirm by members with at least three-fifth of the members give their consent in favor of the propositions.
The act provides the dissolution of the society also. In this regards, consent of specified numbers of members in special meeting needs to be obtained.
Though the Societies Registration Act motadis-motandis provides all required formalities, still keeping in view the seriousness of the act, some immediate steps needs to be taken.
To avoid delay in incorporating a Society, introduction of system of e-filing is an immediate requirement. It can prevent delay to incorporate a society and will bring transparency in governance of a Society. In fact, this matter has also been acknowledged by the Government. In the press release dated 8th September 2011, the then Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh informed the Lok Sabha that an Expert Group under the Chairmanship of Shri.K.N.Chaturvedi has been constituted to study the legislative and regulatory architecture of the Society Registration Act, 1860.The minister was replying to a written question whether the Government proposes to review the Societies Registration Act to make the functioning of Non-Governmental Organizations (NGOs) more transparent and whether the Government proposes to make it mandatory for the societies to go for e-filing of their statement.
The system of checking of name availability needs to be more systematic and transparent. Also, a regular review of the functioning of the relevant officials of the department is also required.
Author: CS Siddhartha Banik.
Email id: firstname.lastname@example.org / Pj_law_solution@yahoo.in