Advantages and Disadvantages of Society Registration

A society is a group of people who live together, an organisation or a club that mainly deals with philanthropic activities. Its members are mainly involved in philanthropic activities. Education, sports, music, art, culture, literature, religion, and other related activities are among the activities covered by the societies. 

The Society Registration Act, 1860 regulates the activities of these associations. The Act also spells out the requirements for getting a society registered. Several amendments have been made to the Act by the state governments.

India’s Society Registration Process

A society must have a minimum of seven members in order to be registered under the Society Registration Act, 1860. Indian citizens are not the only ones covered by the Act; it extends to corporate entities, foreigners, as well as other registered societies. In addition, Societies do not have to be registered, just like partnership firms. Societies can be registered or unregistered, just like partnership firms. 

Even so, Societies do receive some solid benefits when they are registered. For instance, a registered Society is granted legal recognition, and can therefore be recognized as a separate entity from the rest of the world. In addition to purchasing, holding, and selling properties, these societies have the legal capacity to sue or be sued.

In order to register Societies, the respective State governments must take care of the process. Therefore, an application must be submitted to the authority empowered by the State in which the registered office is located. Before the Society can be formed, its members must agree on its name, which must be unique and not be similar to the names of existing societies. After drafting the Memorandum of Association and the Rules and Regulations of the Society, the members should proceed with the registration process.

Benefits of registering your society

Society registration is not mandatory, but it is strongly recommended to register these forums in order to reap the following benefits:

  • Society gets legal recognition and is considered to be a separate legal entity
  • When a society is registered, it is able to sell, hold, acquire, lease, and rent properties. Compliance requirements are simpler when a society holds properties in its own name. Furthermore, when there is a transfer of ownership in the property, there are no legal hiccups.
  • Legal proceedings can be imposed by a registered Society if necessary
  • If the Society obtains the 80G certificate from the Income Tax authorities upon registration, it becomes eligible for tax exemptions
  • Regardless of membership changes, the Society remains a separate legal entity once registered
  • In the event of deliberate fraud committed on the members’ behalf, they will be liable for the debts and liabilities of the Society.
  • Society accounts can be opened in an authorized bank in the name of the organization
  • External funds can be collected and accumulated by registered societies.

Hence, unregistered Societies do not have the privilege of enjoying the advantages listed above since they do not have the status of a separate legal entity. Whenever a society is managed by foreigners and operated in India, it would be considered an Indian society and subject to Indian law.  

Society Registration Procedures

  •   As part of the registration procedure, members must choose the state where the Society will be registered and complete the registration procedures according to the laws of that state.
  •   A suitable name should be selected and then the Society’s objectives should be drafted
  •   To draft a Society’s Memorandum of Association (MoA), they can seek the help of a legal practitioner
  •   Applicants must submit a formal registration request in the form of a covering letter
  •   The members must provide an affidavit delineating their relationship
  •   A Notary Public must witness the signatures of the Society members in the Memorandum of Association
  •   A minimum of three members of the governing board must sign the Society’s Rules and Regulations
  •   Registrar of Societies or any other official authorized by the state must receive the MoA, the Rules and Regulations, and other mandatory documents
  •   In the event that more information is needed, the Registrar can request additional information after verifying the documents
  •   As initial evidence of registration, the certified copies of the said documents are used
  •   Upon receiving records that are accurate, the local bodies grant registration.

Unregistered societies have several disadvantages

  •   There is no legal separation between a society that is not registered under the Societies Registration Act, 1860 and its members
  •   Legal proceedings for settling legal disputes cannot be enforced in court by an unregistered Society
  •   Unregistered societies are not eligible for tax exemptions under the Income Tax Act, 1961
  •   Often, unregistered societies are perceived as immaterial entities by the public and do not receive much credibility
  •   In the case of unregistered societies, transferring ownership and property becomes challenging.

Although, registration of Societies is a little cumbersome and involves strenuous paperwork, it is certainly worth it. If you want to register your company and avoid going through the paperwork and paperwork, you need to outsource the work and let the professionals take care of it for you. 



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