Property of Societies

Property of societies, as governed under the Societies Registration Act, 1860, and various state amendments, is a crucial aspect of how these entities function and manage their resources. The Act and subsequent legal frameworks outline the mechanisms through which societies can acquire, hold, and dispose of property, ensuring that such transactions are in alignment with their stated objectives and legal obligations.

Acquisition of Property

Societies, once registered, have the legal capacity to acquire and hold property, both movable and immovable, in their name. The property can be acquired through purchase, donation, grants from the government, bequests, and legacies. The manner in which a society acquires property must align with its objectives as stated in its memorandum of association.

Holding Property

• The property held by a society is deemed to be vested in the name of the society itself or in the name of trustees or the members of the governing body of the society, as determined by the rules and regulations of the society or as stipulated in the deed or document transferring the property to the society.
• The society, through its governing body, is responsible for managing the property, which includes its maintenance, leasing, licensing, or any other form of utilization that benefits the society and its objectives.

Disposal and Transfer of Property

• Societies can sell, lease, mortgage, or otherwise dispose of their property, subject to the conditions laid down in their governing documents (rules and regulations) and the provisions of the Societies Registration Act, 1860, or any relevant state laws.
• Any such transaction typically requires the approval of the governing body of the society and, in some cases, may also require the approval of the general body of members, especially for significant transactions.
• The proceeds from the disposal of property must be used in furtherance of the objectives of the society and not for the personal benefit of any of its members.

Restrictions and Compliance

• Societies are often subject to specific restrictions regarding property transactions, which can be imposed by the terms of the donation, grant, or bequest through which the property was acquired, or by statutory provisions.
• Societies must ensure compliance with local laws and regulations concerning property ownership, including zoning laws, taxation, and building codes.
• Financial records and transactions involving the property must be transparent and duly audited, with reports submitted to the relevant authorities as required.

Dissolution and Distribution of Property

Upon dissolution of a society, after clearing all debts and obligations, the remaining property must be dealt with as per the rules of the society. If the rules do not specify, then the members of the society or the governing body may decide, subject to the condition that it is transferred to another society with similar objectives or as per the direction of the relevant authority or court.