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Tax India ›› Indian Law ›› Corporate Law ›› Society Act
Society Act
Effect Of Registration / Non-Registration Of A Society
The Societies Registration Act, 1860 lays down procedure for registration of societies for various bonafide purposes.
The registration gives the society a legal status and is essential
- for opening bank accounts,
- obtaining registration and approvals under Income Tax Act,
- lawful vesting properties of societies, and
- gives recognition to the society at all forums and before all authorities.
When the society is registered, it and its members become bound to the same extent, as if each member had signed the memorandum.
A society, registered under this Act, must confine its activities to the sphere embraced by its objects.
A tax imposed on a society is one imposed on the society and not on its members.
A society registered under the Act enjoys the status of a legal entity apart from the members constituting it. A society so registered is a legal person just as an individual but with no physical existence. As such it can acquire and hold property and can sue and be sued.
The society should be registered under the Act to acquire the status of juridical person.
In the absence of registration, all the trustees in charge of the fund have alone a legal status and the society has no legal status, and, therefore, it cannot sue and be sued. A non-registered society may exist in fact but not in law. It is immaterial under the Act whether the society is registered but where the benefit is claimed, the registration of society under the Act us required. An unregistered society cannot claim benefits under the Income-tax act.
Accounts And Audits
The societies are in possession of funds and properties provided to them by the members or by other persons (by way of donation etc.). The funds and properties are interested for the attainment of objects for which the society has been formed. The members of the governing body are the trustees who apply the funds. It becomes necessary, that the societies maintain regular account books and get them audited and present them to the members at the general meeting and file them with the Registrar for scrutiny. Every society should get its accounts audited once a year by duly qualified auditor and have balance sheet prepared by him. The auditor should submit the report showing the exact date of financial affairs of the society.
Litigation
As every society is a legal entity separate from its members it is capable of filing suits against any person or any member. Similarly, the suits can also be brought against the society.
The registered society can file a suit anywhere in India and in any state although it is not registered in that particular state.
Enforcement Of Judgement Against Society
The judgement of decree passed against any person or officer of the society, who represents the society in the legal proceeding, cannot be enforced against the personal property of such person. The property of the society shall only be liable to pay for the decree passed against a society. This protection has been given to the office bearers of the society under the principal Act.
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