Our Services: Charitable Societies

Appointment for Registration of a Society

Kindly contact us:
M/s Anbalagan & Muthukumarasamy
Chartered Accountants
Phone : +91 86085 50000 / +91 93614 41414 [Call between 10.30 am and 5.30 pm]
email: audit@auditorsindia.me

A charitable organisation may be registered under various legal identities:

(i) Society registered under Societies Registration Act.

(ii) Trust registered under the Indian Trust Act.

(iii) Limited company incorporated under section 8 of the Companies Act, 2013

Procedures for Registration:

The first step is to seek an appointment with us by phone or email and to have a consultation with our Senior Partner of the firm.

We provide the following services:
Advising Statutory obligations & pre-requisites for Societies.
1.Drafting the MOA & AOA
2.Registering the Society
3.Getting PAN & TAN Allotment
4.Bank A/c Opening Support
5.FCR Registration
6.Guidance for the maintenance of 7.vouchers & books of accounts.
8.Guidance for maintenance of minute books.
9.12AA/ 80-G Registration under the Income tax Act.
10.Statutory Audit
11.Filing Income Tax returns


What is a Society?

A society is an entity that consists of a group of individuals that unite for a common purpose such as:


Promotion of Science.
Promotion of Literature.
Promotion of Fine Arts.
Diffusion of Useful Knowledge.
Grant of Charitable Assistance.
Creation of Military Orphan Funds.
Foundation or Maintenance of Libraries or Reading Rooms.
Foundation or Maintenance of Public Museum or Galleries.
Social Welfare
Social Development
Other required social and charitable Objectives.
Societies are generally formed for the promotion of charitable causes, such as education, art and culture without financial gain (it is one of the three main types of NGOs in India). The registration of a society in India is governed by the Societies Registration Act, 1860 that aims at legalizing and bringing uniformity to the way such societies are governed. The Act has been adopted by all Indian states, many of which have made amended the original Act.

What is MOA?

The Memorandum must contain the name, area of operation, address of the registered office, name of members of governing body, objects and the names of promoters.

What is AOA?

A document containing rules of the society will also be required so that the reader gets an idea about the legal regulations to which the society would strictly adhere to like termination of a member, meetings, forums etc. The rules and regulations should address concerns like the procedure to obtain society’s membership and subscription; rules and regulations governing the society and its members; organizing meetings and determining their frequency, call for the meeting etc.; formation of the committee or governing body; appointment of auditors; settlement of legal matters and the reasons for dissolution etc.

What documents are needed for forming a Society?

Documents like cover letter, memorandum of association, rules and regulations, affidavit of the president or the concerned member, proof of registered office etc. are required at many steps during the entire process.

Members Required and Eligibility to become Members in Society:

Minimum seven people are required to be associated with the organization for any literary, scientific, or charitable purpose. Their names must be subscribed to the memorandum of association, and the same shall be filed with the Registrar of Joint-stock Companies to form a society under the Societies Registration Act, 1860. Charitable societies; the military orphans; societies established for the promotion of science, literature, or the fine arts for instruction; the diffusion of useful knowledge etc. are some of the examples of societies which can be registered under the Societies Registration Act, 1860.

There are certain advantages and limitation of forming a society with which you must be acquainted completely before taking a decision to proceed any further.

Advantages in Society:

There are several advantages of forming a society:


A society becomes a separate legal entity once incorporated.
An incorporated society has the right to lease, rent, buy and sell property, borrow money and enter contracts in its own name. No member of the society has personal right or interest in any of the assets of the society.
An incorporated society continues to be a separate entity even if its membership changes.
Members are not personally liable for the debts, contracts or other obligations of the society unless:
The debts or obligations are incurred from activities undertaken to obtain money for pecuniary gain (profit); in such case every member involved is personally liable for these debts or obligations; or
The debts and obligations are incurred through unlawful activities; in such case every member involved is personally liable for these debts or obligations.
The rules governing the incorporated society must meet the minimum requirements set out in the Incorporated Societies Act 1908. Thus, members can be assured of the certainty in the way the society is run.
An incorporated society may be entitled to an income tax exemption.

Taxation:


Section 11 of the Income Tax Act, exempts the income of Charitable Societies / Trusts from the charge of tax on the fulfilment of certain conditions.

Apart from this, sections 12, 12A, 12AA and 13 and certain clauses of Section 10 of Income Tax Act also govern the issue of taxation of such organisations. However NGOs need to apply to the income tax authorities to get this exemption.

For availing exemption under Section 11, the Society / Trust is required to fulfil the following conditions:

a. Registration: For registration under Section 12AA with the Commissioner of Income Tax, the Society or Trust or institutions should apply within one year from the date of creation of Society or establishment of institution, in Form No 10A (in duplicate) along with the memorandum of association or bye-laws of the society in original or the document evidencing creation of the Trust, together with a copy thereof and two copies of the accounts of the society relating to three previous years (or for the year during which the Society or Trust was in existence, in case of a new Society). The Commissioner shall call for documents or information and hold enquiries regarding the genuineness of the Society/ institution. After being satisfied about the charitable or religious nature of its objects and genuineness of its activities, he will pass an order granting registration, and if he is not satisfied, he will pass an order refusing registration, subject to the condition that an opportunity of being heard shall be provided to the applicant before an order of refusal to grant registration is passed and the reasons for refusal of registration shall be mentioned in such order. The order granting or refusing registration has to be passed within six months from the end of the month in which the application for registration is received and a copy of such order shall be sent to the applicant society/institution. If the Commissioner of Income Tax is satisfied that the activities of any institution are not genuine or are not being carried out in accordance with the objects of the institutions, he shall, after giving reasonable opportunity of being heard to the concerned institution, pass an order in writing cancelling the registration granted under Section 12AA.

b. Maintenance of Accounts: The Society / Trust should maintain regular books of account, supported by receipts and vouchers. The accounts shall be made on a cash basis. The Society / Trust should prepare an ‘Income and Expense Account’. Any voluntary contribution received by the Society / Trust shall be deemed to be income derived from the property held under trust. Where contribution have been made with a specific direction that they shall form part of the corpus it should be so specified on the receipt issued as the same shall be exempt under section 11 (1)(d).

c. Compulsory Audit: Where the total income of the Society / Trust /institution exceeds Rs 2,50,000 in any previous year, the accounts of such Society / Trust are required to be audited and the audit report which shall be in Form No 10B is required to be furnished along with the return.

d. Income not to be spent for the benefit of certain persons: No part of the income or property of a Charitable Society / Trust claiming exemption under Section 11 should be used or applied for benefit of any person specified under Section 13/3, subject to certain exceptions.


In the event of refusal to tax exemption, Societies / Trusts need to pay tax on their income, as per the terms laid down in the Income Tax act. Societies / Trusts involved in for-profit activities also pay tax as per the terms in the Income Tax act. These tax paying Societies / Trusts can also make investments in the for-profit ventures or bodies, based on their risk appetite.

Applicable Registrar of Society Office area and Authority:

You have to apply for the registration of Society in the area where you are providing the registered office address. The registered office can be residential or commercial place. The jurisdiction of the Registrar of Society shall be applicable according to the registered office of the Society chosen/selected and provided by the founders. State level societies can be registered mostly from the district head quarters and national level society can be registered from Union Territory Delhi area.

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