Companies

Society


Societies are a relatively modern form. These are formed when about seven persons come together for a common purpose in a general body. These may be Indians or foreigners. You can add more members. Each general body member has one vote. The general body then elects a governing board (usually 5-7 persons) from among the members. The governing board manages the organisation directly or through executive employees. Societies in many states are governed by the Societies Registration Act, 1860 in its original or amended form. However, a number of states have passed their own laws for regulating societies - these laws have replaced the original Societies Registration Act, 1860. A society formed in one state can usually operate in other states, if its Memorandum says so. However, in many states, the registrars may refuse to register such a society. Or they may impose additional conditions. For instance, you can register an all-India society in Delhi, only if you have members from several different states. Governance and public filing requirements vary from one state to another. In general, every society has to file a list of governing body members annually. Many states ask for filing of audited accounts as well. However, there are as many which do not. The main Societies Registration Act, 1860 itself does not have any provision for filing of audited accounts. In most states (except Tamil Nadu), members and office bearers can also be paid employees of the society.

Formation and governance of a society is more difficult than a trust, but easier than a company. However, finding and corralling seven members can sometimes be difficult. This form works best for people with state-level objectives, who want to focus on their activities, and cannot be bothered with too many formalities.

A society is somewhat like a bus full of pilgrims, driven by one of the passengers. Arguments may break out over who pays for the fuel and for repairs. There might be quarrels about where to go and how long to stop at each shrine. The driver may be impeached every now and then. To avoid this, most societies restrict membership to the minimum, and raise funds from outsiders.


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