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Society - Dissolution & Winding Up
There can be three ways, by which Society can be dissolved:
Voluntary Dissolution
As per provisions of section 13 of Societies Registration Act, 1860, a society can close its operations and affairs with the consent of not less than three-fifths of the members delivered in person, or by proxy, at a general meeting convened for the purpose. After the approval of the members for the dissolution of the society all necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities according to the rules of the said society applicable thereto, if any, and if not, then as the governing body shall find expedient.
The resolution passed by the members may provide for the dissolution forthwith or upon a agreed time and no dissolution shall be effected without the consent of the Government of the State, where such Government is a member of, or a contributor to, or otherwise interested in any society registered under this Act
Any dispute arising among the said governing body or the members of the society, the adjustment of its affairs shall be referred to the principal Court of original civil jurisdiction of the district in which the chief building of the society is situated; and the Court shall make such order in the matter as it shall deem requisite
If upon the dissolution of the society registered under this Act, there shall remain, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the said society or any of them, but shall be given to some other society, to be determined by the votes of not less than three-fifths of the members present personally or by proxy at the time of the dissolution, or, in default thereof, by such court as aforesaid.
Dissolution by Registrar
The Societies Registration Act, 1860 doesn’t provides for dissolution of Societies by the Registrar, however various state law provides for dissolution of Societies by the Registrar under the following conditions:
- Where the office of the society has ceased to be in the state of registration, or
- Where the activities of the society are considered subversive, or
- Where it is carrying any unlawful activity, or
- Where it has allowed any unlawful activity to be carried within the premises under its control, or
- Where the registered society has contravened any provisions of the respective Societies Act, or
- Where the registered society is insolvent or must necessarily become so, or
- Where the business of such registered society is conducted fraudulently or in accordance with the bye laws or objects of the Society, or
- Where the number of members of the Society is reduced below 7, or
- Where the Society is unable to pay its debt or meet its liability, or.
- Where the society has ceased to be in function for more than 3 years, or
The Registrar normally inquires or investigates into the activities of the Society and call upon the Society to show cause why it shall not be dissolved. The registrar than move to the court for making an order for dissolution of the Society, if the show cause notice by the Society is not satisfactory
Dissolution by Court
The Societies Registration Act, 1860 doesn’t provides for dissolution of Societies by the Court, however various state law provides that The Court may order for dissolution of Society on application of 10% of its members or by the Registrar in some states. The Court may order dissolution if it is satisfied that nay of the following circumstances exist
- Where the registered society has contravened any provisions of the respective Societies Act, or
- Where the number of members of the Society is reduced below 7, or
- Where the Society is unable to pay its debt or meet its liability, or.
- Where the society has ceased to be in function for more than 3 years, or
- It is proper that the Society must be dissolved
- If the registration of Society has been cancelled on the ground that’s its activities or proposed activities have been or will be opposed to the public policy.
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