IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBJECT : SOCIETIES REGISTRATION ACT
Date of Decision: 02.05.2012
W.P.(C) No.6965/2011
BRIJ MOHAN GUPTA ….. Petitioner
Through: Mr. Sandeep Gupta, Adv.
versus
THE REGISTRAR OF SOCIETIES ….. Respondent
Through: Mr.Rajiv Nanda, ASC with Mr.Brajesh Pandey, Mohd.
Aslum Khan, Adv. for R-1.
Mr. K.G. Sharma, Adv. for R-2 to 6.
CORAM:
HON’BLE MR. JUSTICE VIPIN SANGHI

The Companies Act, 1956 provided for registration of charitable organizations under section 25 of the Act but the same is now contained under Section 8 of the Companies Act 2013, if two basic requirements are fulfilled, namely:

• The main object of the company is promotion of commerce, art, science, religion, charity or any other useful object, and
• It intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members.

Section 25 Companies Act 1956: If Central Government thinks fit, it may grant a licence to an association to be formed under this section without the words “Limited” or “Private Limited”. Such companies, when registered as Section 25 companies, enjoy many privileges not available to other companies registered under the Act.

The main advantages available to these companies include:

1. Dispensed with use of words ‘Limited’ or ‘Private Limited’.
2. No need to comply with statutory requirement of minimum share capital.
3. Partnership firm is allowed to be member of such a Company.
4. Further, various procedural exemptions have been provided under various other provisions of Companies Act like Annual Return, Annual General Meeting, Board Meetings, Maintaining of Books of Accounts, etc.

The procedure for registration under this section begins with filing of Form 1A with the Registrar of Companies. After the name is approved, an application has to be made to Regional Director, Company Law Board for licence under this section, along with copies of Memorandum of Association and Articles of Association and related documents.

Once registration is granted under these provisions, the company can also apply for registration under Section 80G of the Income Tax Act, 1961, which will allow donating persons to get 50% deduction from his taxable income.

Section 8 of the Companies Act, 2013: Formation of companies with charitable objects, etc:

(1) Where it is proved to the satisfaction of the Central Government that a person or an association of persons proposed to be registered under this Act as a limited company–

(a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;

(b) intends to apply its profits, if any, or other income in promoting its objects; and

(c) intends to prohibit the payment of any dividend to its members, the Central Government may, by licence issued in such manner as may be prescribed, and on such conditions as it deems fit, allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited”, and thereupon the Registrar shall, on application, in the prescribed form, register such person or association of persons as a company under this section.

(2) The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.

(3) A firm may be a member of the company registered under this section.

(4) (i) A company registered under this section shall not alter the provisions of its memorandum or articles except with the previous approval of the Central Government.

(ii) A company registered under this section may convert itself into company of any other kind only after complying with such conditions as may be prescribed.

(5) Where it is proved to the satisfaction of the Central Government that a limited company registered under this Act or under any previous company law has been formed with any of the objects specified in clause (a) of sub-section (1) and with the restrictions and prohibitions as mentioned respectively in clauses (b) and (c) of that sub-section, it may, by licence, allow the company to be registered under this section subject to such conditions as the Central Government deems fit and to change its name by omitting the word “Limited”, or as the case may be, the words “Private Limited” from its name and thereupon the Registrar shall, on application, in the prescribed form, register such company under this section and all the provisions of this section shall apply to that company.

(6) The Central Government may, by order, revoke the licence granted to a company registered under this section if the company contravenes any of the requirements of this section or any of the conditions subject to which a licence is issued or the affairs of the company are conducted fraudulently or in a manner violative of the objects of the company or prejudicial to public interest, and without prejudice to any other action against the company under this Act, direct the company to convert its status and change its name to add the word “Limited” or the words “Private Limited”, as the case may be, to its name and thereupon the Registrar shall, without prejudice to any action that may be taken under sub-section (7), on application, in the prescribed form, register the company accordingly:

Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard:

Provided further that a copy of every such order shall be given to the Registrar.

(7) Where a licence is revoked under sub-section (6), the Central Government may, by order, if it is satisfied that it is essential in the public interest, direct that the company be wound up under this Act or amalgamated with another company registered under this section:

Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard.

(8) Where a licence is revoked under sub-section (6) and where the Central Government is satisfied that it is essential in the public interest that the company registered under this section should be amalgamated with another company registered under this section and having similar objects, then, notwithstanding anything to the contrary contained in this Act, the Central Government may, by order, provide for such amalgamation to form a single company with such constitution, properties, powers, rights, interest, authorities and privileges and with such liabilities, duties and obligations as may be specified in the order.

(9) If on the winding up or dissolution of a company registered under this section, there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred to another company registered under this section and having similar objects, subject to such conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to the Rehabilitation and Insolvency Fund formed under section 269.

(10) A company registered under this section shall amalgamate only with another company registered under this section and having similar objects.

(11) If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or with both:

Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.

Political Party Registration India – Political Party need to get registered with Election Commission of India, to avail provisions of Part-IV-A of the Representation of the People Act, 1951. The registered party gets benefit in terms of party symbol, which can be protected on National level in case of National Party registration. An application in the prescribed format for registration is to be submitted to the Secretary, Election Commission of India, Nirvachan Sadan, Ashoka Road, New Delhi-110001, within 30 days of formation of party.

S 2. The application must be accompanied by the following documents/information:-
(i) A demand draft for Rs. 10,000/- (Rupees Ten Thousand Only) on account of processing fee drawn in favour of Under Secretary, Election Commission of India, New Delhi. The processing fee is non-refundable.

(ii) A neatly typed/printed copy of the memorandum/rules and regulations/Constitution of the Party containing a specific provision as required under sub-section (5) of Section 29A of the Representation of the People Act, 1951 in the exact terms, which reads “—————(name of the party) shall bear true faith and allegiance to the constitution of India as by law established, and to the principles of socialism, secularism and democracy and would uphold the sovereignty, unity and integrity of India”. The above mandatory provision must be included in the text of party constitution/rules and regulations/memorandum itself as one of the Articles/clauses.

(iii) The copy of the party Constitution should be duly authenticated on each page by the General Secretary/President/Chairman of the Party and the seal of the signatory should be affixed thereon.

(iv) There should be a specific provision in the Constitution/rules and regulations/memorandum of the party regarding organizational elections at different levels and the periodicity of such elections and terms of office of the office-bearers of the party.

(v) The procedure to be adopted in the case of merger/dissolution should be specifically provided in the Constitution/rules and regulations/memorandum.

(vi) Certified extracts from the latest electoral rolls in respect of at least 100 members of the party (including all office-bearers/members of main decision-making organs like Executive Committee/Executive Council) to show that they are registered electors.

(vii) An affidavit duty signed by the President/General Secretary of the party and sworn before a First Class Magistrate/Oath Commissioner)/ Notary Public to the effect that no member of the party is a member of any other political party registered with the Commission.

(viii) Individual affidavits from at least 100 members of the party to the effect that the said member is a registered elector and that he is not a member of any other political party registered with the Commission duly sworn before a First Class Magistrate/Oath Commissioner)/Notary Public. These affidavits shall be in addition to the furnishing of certified extracts of electoral rolls in respect of the 100 members of the applicant party mentioned at (vi) above.

(ix)Particulars of Bank accounts and Permanent Account Number, if any, in the name of the party.

(x)Duly completed CHECK LIST alongwith requisite documents prescribed therein.

School Registration India – Schools are regulated by respective state’s Education Departments and different laws are prevalent in different states. Like state of Delhi has Delhi School Education Act, 1973.

According to the Delhi School Education Rules, 1973, every individual, association of individuals, society or trust, desiring to establish a new school in Delhi, not being a minority school, shall before establishing such school, give an intimation in writing to the Adminstrator of his or their intention to establish such school.

Similarly, unreocgnized schools cannot open a new class ther than the ones which have received an approval from appropriate authority, without the necessary approval. School includes a pre-primary, primary, middle and higher secondary school.

Further, every school seeking recognition would be required to fulfil some conditions like school should be run by a society registered under Societies Registation Act, 1860 or a publis trust established under Indian Trusts Act, 1882. Further,

1. It should have proper funds to ensure financial stability and payment of salaries,
2. It should get management schme duly approved,
3. It has suitable or adequate accomodation and sanitary facilities,
4. It should provide for approved courses of study and efficienct instructions,
5. Teachers should possess prescribed qualifications,
6. Lastly, should have prescribed facilities for physical education, library service, laboratory work, workshop practice or co-curricular activities.

Trust Registration India – A “trust” is an obligation annexed to the ownership of property, and arising out of a confidence reposed in an accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. A public charitable trust is usually floated when there is property involved, especially in terms of land and building. Like Schools, Hospitals, etc are mostly formed as trust mostly. Even the ‘Being Human: The Salman Khan Foundation’ is registered as a charitable trust.

Trusts in India are regulated under Indian Trusts Act, 1882 and provide as follows:
The person who reposes or declares the confidence is called the “author of the trust”; the person who accepts thee confidence is called the “trustee”; the person for whose benefit the confidence is accepted is called the “beneficiary”; the person for whose benefit the confidence is accepted is called the “beneficiary”; the subject-matter of the trust is called “trust-property” or “trust-money”; the “beneficial interest” or “interest” of the beneficiary is his right against the trustee as owner of the trust-property; and the instrument, if any, by which the trust is declared is called the “instrument of trust”. A breach of any duty imposed on a trustee, as such, by any law for the time being in force, is called a “breach of trust”.

It is well settled that no formal document is necesary for formation of a Trust, but in many cases, to satisfy basic legal requirements of various statutes, it may be necessary to have a Trust Deed in writing. For any public charitable trust, trust deed is the most important document, which includes the main aim and objectives, powers and other issues as to the management of the company.

Society Registration India – Societies Registration Act, 1860 was brough into effect in 1860, with a view to promote social welfare activities by a group of unrelated individuals, who work with a common purpose with own/donated funds. Section 20 of Societies Registration Act, 1860 provides for the following societies that may be registered under this Act:-

1. Charitable societies;
2. Military orphans funds or societies;
3. Societies established for the promotion of science, literature, or the fine arts;
4. Societies established for instruction and diffusion of useful knowledge, diffusion of political education;
5. Societies established for maintenance of libraries or reading rooms for general; public;
6. Societies established for Public museums and galleries for paintings or other works of art, collections of natural history, mechanical and philosophical inventions, instruments or designs.

For example, society can be formed for the purpose of promotion of common interests of residents of a society/apartments like resident welfare associations or the ones to protect the interests of senior citizens like society for senior citizens, etc.

A society can be formed by minimum of seven members coming together for a common purpose/objective as provided under section 20 above. But it is important to note that all the seven members should not have any blood relations between any of them. Further, if the society has to be formed at National level, then all the seven members should be from different states.

These members by subscribing to the memorandum of association / rules and regulations can form a society by completing required formalities with Registrar of Society for the state. Our team would assist you in preparation of necessary documents, please let us know of your requirements.