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S.Bheema Rao
Faculty-Microfinance
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   ¢he Society ¢he Registration ¢he Companies

  Registration Act,1882 Act,1956
Act,1860
u  Relatively simple. Very simple, It may Relatively

  It may take 1-2 take a week complicated. It
months may take 3-6
months
   Registrar of Sub registration of Registrar of

  Society of Registration Societies of the
 concerned state concerned state
! "  Separate Not required Separate

 application is not application is
required ,Name required to be
generally granted if made .¢here are
available strict guidelines for
approval of name
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#$

  r ( Seven) 2 (¢wo) 2 (¢wo)

    %
& '
Gp   Less than Less than Less than
  Rs.10000.00 Rs.10000.00 Rs.25000.00
(  ¢wo tier structure Single structure ± ¢wo tier structure

 a. General Body the trustees are the a. General Body

b. Executive ultimate authority b. Board of
Committee Directors
) *   All members have All members have ¢he voting rights may
equal rights equal rights vary on the basis of
share holdings. ¢he
provision can be used
for control purposes
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+ &  No much of a Same Same

 ""  difference between
these 3 forms. Any
kind of charitable
and public utility
activity can be
under taken
, " ¢he Act requires a No documents are Annual returns and
- 
   list of management required to be filled audited accounts
"" body to be filled are required to be
every year. But held every year
different states
have different
requirements for
filling additional
documents
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 "  General and Board No provisions are Specific provisions

. 
 meetings are laid down. have been laid
required to be held Adequate rules down. At least 1
as prescribed in the should be framed Annual General
bye law of the in the trust deed, in Meeting and 4
society this regard. Board meetings are
required to be held
every year.
u &  Membership not Membership not Membership can be
 transferable transferable transferred

/
  Permitted as the Provision in the Permitted as the

  general body may trust deed should general body may
decide be there for any decide
such payment
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!  ¢he statutory No statutory Annual returns and

0 compliances recurring Balance Sheet are
required are expenditure filled along with
minimal. certain fees.
#   Can operate Can operate Can operate
  throughout India throughout India. throughout India as
even if registered the registration is
in one particular granted by the
state. No separate Central
registration is not Government
required
G
 &0 Compulsory within Compulsory within Compulsory within
  12 months of 12 months of 12 months of
registration registration registration
  


 Memorandum of Association in duplicate alongwith a certified copy. It

should be neatly typed and pages serially numbered.
 Rules and regulations/Bye-laws in duplicate duly signed.
 Affidavit on non-judicial stamp paper of appropriate value sworn by the
President or Secretary of the society stating the relationship between the
subscribers. ¢he affidavit should be attested by an oath commissioner,
Notary Public or Magistrate 1st class.
 Documentary proof such as House ¢ax receipt, rent receipt in respect of
premises shown as registered office of the society or no-objection
certificate from the owner of the premises.
 Covering letter along with the requite fees, requesting the Registrar for
registration
p   

 ¢he registrar of Societies will verify and process

the above mentioned documents.
 After satisfying himself about the compliance
of the provisions of the relevant Act and the
correctness of the Registrar will issue a
certificate of registration
   p   

 Acceptance of foreign contribution by MFIs registered under

the Societies Registration Act 1860 is regulated by the
Foreign Contribution (Regulation) Act 19r6 (FCRA).
 MFIs need to make applications in form FC-8 of FCRA to
the Secretary, Ministry of Home Affairs, New Delhi.
 nce registered with the Ministry of Home Affairs, these
organizations have to agree to receive such foreign
contribution only through one of the branches of a bank as it
may specify in its application for registration.
&0 

 Section 11 of the Income ¢ax Act, exempts the income of charitable

societies from the charge of tax on the fulfillment of certain conditions.
 Sections 12, 12A, 12AA and 13 and certain clauses of section 10 of
Income ¢ax Act also govern the issue of taxation of such organizations.
 Since the object of microfinance may be considered a charitable function,
local assessing officers of the Income ¢ax Department often exempt the
income from microfinance activities from income tax. However MFIs
need to apply to the income tax authorities to get this exemption. ¢he
wealth of the societies however, is subjected to Wealth ¢ax at 1% of the
net value of the wealth with a basic exemption of Rs15 lakhs.
  $  1   p""
  "  2
"  3
 Geographical Coverage
 Range of Products and Services offered ( specially
  3
 Increase Number of Clients served
 Professionalism in HR and other systems & polices

 "  2
 "3
 Equity capital
 Commercial Capital
 Grants / Funds through FCRA
 Financial Self sufficiency

  "  2   4 ""3

 Governance ( wnership & Board formation)
 Mission Drift from Social to Business
 ¢axation and ¢ransparency in Standard Reporting
p " 

Now a days so many NG s are transforming

from NG -MFI to NBFC with the aim of

¢REACH & S
S¢AINABILI¢
Best example :

5
$ 

 $ 

 $ 
&6 7