FORM OF NGO- SOCIETY (Series-3)

Society can be described as an association of persons united together by mutual consent to act jointly for some common purpose.

The provisions of the Societies Registration Act, 1860 aims at improving legal conditions of societies established for promotion of literature, science or fine arts or for diffusion of useful knowledge or for charitable purposes.

Who can Form a Society ?

Society can be formed by minimum seven or more persons, eligible to enter into a contract including the following:

i. foreigners, even if all the subscribers are foreigners
ii. partnership firms
iii. a limited company
iv. a registered society

Why Registration of Society is Recommended ?

The registration gives the society a legal status and is essential for:

i. opening bank accounts,

ii. obtaining registration and approvals under Income-Tax Act,

iii. lawful vesting of properties of societies, and

iv. recognition to the society at all forums and before all authorities.

v. A suit can be filed by or against a registered society:

a) in the name of certain office bearers or trustees, as provided by the rules and regulation of the society, or

b) in the name of such persons as may be appointed by the governing body of the society.

In the absence of registration the society has no legal status and, therefore, it cannot sue or be sued.

Governing Body of the Society

The activities of the society are managed, executed and supervised by the governing body. The principal Act defines the governing body to be the governors, Councils, Directors, Committee, Trustees or other body to whom by the rules and regulations of the society the management of its affairs is entrusted.There should be at least two members of any governing body. The members of the governing body are either elected or nominated as per the rules and regulations of the society.The term of office of members of governing body is generally provided in the rules of the society. 

Dissolution of Trust

Unlike trusts, societies may be dissolved.  Dissolution must be approved by at least three-fifths of the society's members. Upon dissolution, and after settlement of all debts and liabilities, the funds and property of the society may not be distributed among the members of the society.  Rather, the remaining funds and property must be given or transferred to some other society, preferably one with similar objects as the dissolved entity.

CA Shivani Agarwal

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