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When association of some individual jointly carry out certain charitable activities for the particular purpose then they can do so by forming society. The society is governed by society’ registration act-1860. The activities carried out under the society largely consist of charitable in nature and welfares of people. Society in the other sense may be made for maintenance of residential buildings. It is not necessary that societies made up for the purpose of charitable activities only, Societies can be made for commercial purposes also. Some of the commercial buildings/malls/complex or group of shops form society for their maintenance. This kind of society collects money in the name of society maintenance from shop owners and carry out the activities to maintain the building/complex in a proper manner.
Society can be formed for following purposes:
The Memorandum of Association is charter document of society which contains the name of the society, registered office address of the society, the area of its activities, and the objectives for which the society is established. The Memorandum of Association of the society must be signed by every establishing member, witness by Gazetted Officer, Notary Public with their official stamping and complete address. The MOA shall also consist the names, addresses, and occupations of the governors, council, directors, committee, or other governing body to whom, by the rules of the society, the management of its affairs is entrusted. A copy of the rules and regulations of the society, certified to be a correct copy by not less than three of the members of the governing body, shall be filed with the memorandum of association.
Generally, the society which carried out the 100% charitable activities do not required to pay income tax subject to certain terms ans conditions.
A Society can acquire 12A certificate from the Income Tax Department. Any society acquiring such a certificate is exempted to pay income tax for the entire lifetime on its surplus income. Also, it must obtain 80G certificate. This certificate allows donors, that is persons or organizations making donations to an 80G certified NGO, to avail deduction from their respective incomes. Thus, such a deduction is given to the donors under section 80G of the Income Tax Act. By availing this certificates, society can attract more doners because of income tax benefits to donors.
