Property Insurance for your Home, Shop and Business

The Society Registration Act was introduced in India during the British Raj. Currently, a modified version of it continues to be in effect as an Act of the Indian parliament. Initially set in motion during the 1860s, this legislation allows a group of individuals to establish a legally recognised formal organisation which is invested in literary, charitable, scientific or other socially beneficial activities.

[Source]

Let’s learn about the Act and about the legal requirements of forming a society in detail.

Some illustrative purposes of the Society Registration Act 1860 include:

• Encouraging individuals about important topics and subject matters, as mentioned above.
• Making sure a culture of knowledge exchange can thrive in India.
• Recognising group activities done for socioeconomic or cultural welfare.
• Allowing a registered society an improved judicial standing in a court of law.
• Enabling associations to file for tax exemption under specific terms and conditions.
• Ensuring that a registered organisation can acquire property under its own name without any legal hassle.

Read more about why Property Insurance is important?

The rules and regulations of the Society Registration Act 1860 state that in order to establish a formal organisation, it is legally required to produce the documents as mentioned below:

• PAN card of every individual who is supposed to be a member of this proposed society.
• Aadhaar card, bank statement, utility bills, passport, or driving licence of these aforementioned individuals as their proof of residency.
• Adequate cover letter.
• Self-declaration and affidavit.

Some other requirements are underlined below:

• The society will need to prepare a Memorandum of Association.
• There have to be adequate rules about how a society functions, including ways of becoming a member.
• At least seven or more individuals have to be part of this organisation in order to establish a formal society.
• Clear regulations regarding how this society in question can be dissolved, if needed.

[Source]

In order to establish a welfare society under the Societies Registration Act, its members will need to adhere to certain steps as mentioned below:

STEP 1

As the primary step, members will have to decide on a name for the society. However, it should be kept in mind that if the chosen name is precisely the same or significantly similar to that of a different registered society, then that denomination will not be allowed.

STEP 2

The prepared Memorandum of Association and documents about its rules and regulations has to be signed by the individuals mentioned here:

• Every established member of the enterprise.
• A gazetted officer.
• Chartered accountant.
• Notary public.
• An oath commissioner.
• Associated advocate.
• The magistrate.

STEP 3

The chartered accountant must also provide their official stamp to these documents, alongside the complete address.

STEP 4

Founding members of this society must prepare a letter of the formal request for the formation of an organisation, which all of them need to co-sign.

STEP 5

A No Objection Certificate (NOC) from the landowner of the property where the society’s registered office is located needs to be attached.

STEP 6

Members must submit all the necessary documents as mentioned above to the Registrar of Societies as authorised by the state where the society office is located. Notably, two copies of each of the documents have to be produced, along with submitting the adequate fee.

STEP 7

Once this application is received, a signed copy of it will be returned to the applicants with an authorised signature as a form of acknowledgement. However, a second copy of this paperwork will be kept for processing registration requests.

Subsequently, after a thorough verification is done, the registrar will certify an applicant organisation as a formal society and provide it with a registration number.

[Source]

Preparing a Memorandum of Association is one of the crucial documentation procedures for an organisation in order to become a society registered under the Act 1860. The MoA is a formal declaration by a potential community about its boundaries of activity.

In other words, this document clearly lays down specific objectives of the enterprise in question: an undertaking of focal points of its pursuits. This way, society is legally obligated not to indulge in any kind of ventures and manoeuvres that had not been declared beforehand in this memorandum.

In case of large scale societies, a memorandum of association may also detail working relationships between this registering organisation and its shareholders. As a result, investors will have a clear idea about prospects of the society in question before any underwriting. 

In general, a Memorandum of Association provides a crystal-clear idea about the rights and powers a society can legally possess. When drafting this document, society members will need to offer these basic details about the organisation as mentioned below:

• Name and object of the society
• Reasons why this society is being formed.
• The kinds of activities this society will be taking part in.
• Crucial personal information about all founding members of a society.
• Address of this organisation’s registered office.

[Source]

Societies Registration Act is an effective measure that allows like-minded individuals to establish a certified and documented institutional body aimed at comprehensive betterment of society. Additionally, as such a registered organisation is well within its limits of legal rights, it can function seamlessly without any judicial hassle.