Benefits of Society Registration

The activities of Societies are regulated by the Society Registration Act 1860. The Act also lays out the procedure and the prerequisites for getting a Society registered. The state governments have adopted the Act, by making a few necessary amendments. Some state like Haryana has enacted a separate act like Haryana Registration and Regulation of Societies Act, 2012  to deal with registration of societies.

Benefits/Advantages of Society Registration

A registered society is viewed as an independent juridical ‘person’. It is different from the people who form it. The registered society can

  1. Registered society can purchase the property.
  2. It can  File cases.
  3. Any property held can pass from one generation to another without having to pay any transfer fees or taxes and without any cumbersome documentation.
  4. The properties of a an incorporated body can be easily protected from rival claimants and resulting litigants.
  5. A registered Society has the right to impose legal proceedings in court when the need arises
  6.  On registration, the Society becomes eligible for tax exemptions, provided it has the 80G certificate from the Income Tax authorities
  7. Regardless of the change in the membership, the Society, once registered, always remains a separate legal entity
  8.  Members are not liable for the debts and liabilities of the Society. But in case of deliberate fraudulent actions on behalf of the members, they will be held responsible for the same
  9.  A registered Society can hold an account in an authorized bank in its own name
  10.  A registered Society has the privilege to collect and accumulate funds from external sources.

Property which is vested in the members of an unregistered society becomes “ property belonging to the society” after registration and , and there is no transfer of ownership.

Disadvantages/Drawbacks of an Unregistered Society 

  • Society cannot act as a separate legal entity until and unless it gets registered under the Societies Registration Act, 1860.
  • In the absence of registration, the Society cannot hold the right to enforce any legal proceeding in the court for the settlement of legal disputes.
  • Unregistered societies cannot avail tax exemptions mentioned under Income Tax Act.
  • Society working outside the canopy of the law is viewed as an immaterial entity.
  • The shifting of properties in the name of the Society is an unrealistic proposition for unregistered Society.

A society registered in India and having all of its members as foreigners is still an ‘Indian’ society and governed by Indian Laws. Conversely when registered outside and all members are Indian then society is a foreign society.

An unregistered society is not recognised as an independent juridical person under law. Therefore, it does not enjoy the benefits mentioned above. Failure to register the institution gives it no legal face and only the trustees in charge of the fund have a legal status. A promissory note executed in favour of the institution in this event is void and no suit can be instituted to enforce it on behalf of the institution.

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