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Society - Management & Accounts

	Management of Society
	Accounts & Audit

Management of the Society

Governing Body

The Society upon registration is a legal entity and cannot act by itself. It acts through the members of the governing body. The governing body of the society shall be the governors, council, directors, committee, trustees or other body to whom by the rules and regulations of the society the management of its affairs is entrusted. The Governing Body is the mind of the Society. The main responsibility of the governing body shall be to:

• Manages the affairs for achievement of objects states in the Memorandum of Association,
• Checks whether the Action taken are within the framework of rules and bye laws of society
• Complies with statutory provisions of Act

The term governing body has not been defined in the Act. Usually, the governing body comprises of members, chosen from amongst the members of the Society. But, at times, Government may appoint its nominee, in the governing body, in the public interest.

There should be at least two members of any governing body and the term of office of members of governing body is generally provided in the rules of the Society.

The members of the governing body are the trustees of the properties of society and they have to look after and manage it and in case , they are not willing to do so, they shall appoint the necessary trustees in accordance with the rules of the Society.

The Governing Body is responsible for managing the affairs of the Society and all the decision related thereto are taken in their meeting, which is held in accordance with the rules . All the matters are decided by general majority except for matter for which specific majority has been prescribed in the rules or the Act.

Statutory duties of the Governing Body

The duties of Governing Body are subject to the rules of the Society but some general duties are outlined below

• Holding of General Meeting & Special Meeting,
• Alterations in managing body and bye laws of society,
• Investments and applications of funds.
• Borrowing of funds
• Maintenance of necessary accounts & its audit.

Members

Members do not interfere in the day to day activities of the Society. Though the principal Act does not prescribe for the same, the relevant state Act prescribed that the Governing Body is required to submit the audited Balance Sheet & Income and Expenditure statement to the members every year. The Balance Sheet & Income and Expenditure statement is required to be audited by the statutory auditor, appointed by the governing body.

Every year, a meeting of shareholders is held i.e. Annual General Meeting, where they approve the audited Balance Sheet & Income and Expenditure statement and discusses the performance of the Society during the last financial year. The Governing Body is under an obligation to answer all the queries of the shareholders related to the annual financial statement and performance of the Company.

Decisions like change in name, change in objects , alteration of Memorandum of Association, rules and regulations , dissolution etc requires the permission of the members .

All the decisions at the meeting of the shareholders are taken by way of voting and each member hold one vote . Some decision requires majority voting and some 3/5th voting.

Rights of Members

1. Right to attend the Annual & Special General Meeting
2. Right to vote
3. Right to receive and inspect copies of Memorandum of Association and rules & regulations.
4. To receive the audited balance sheet & income and expenditure statement.
5. To alter the Memorandum of Association and rules & regulations.

Accounts & Audit

The Societies Registration Act does not prescribe for maintenance of books of accounts or carrying of any audit but the state laws governing societies provides for the same.

Maintenance of Accounts

Every society should keep at its registered office proper books of accounts:

1. All sums of money received and the sources thereof
2. All sums of money spent by the society and the objects or purposes
3. All sales and purchase of goods by the Society
4. Assets and liabilities of the societies giving fair view of state of affairs

Method of accounting:

Every entry in the books of account should be made as and when the particular event occurs. Preferably, accounts, returns and registers of the society should be verified by the member of the committee or governing body and with each such account, return and registers declarations should be endorsed.

Societies are not required to follow any accounting standards and there are no disclosure requirement in respect of financial statements

Financial Statements

Societies are required to prepare annual financial statements which would consist of the following:

1. A Balance Sheet – to give a true and fair view of the state of affairs of the company as at the end of the financial year; and
2. A Income and Expenditure Statement – to give a true and fair view of the profits or losses of the company for the financial year.

Auditing of Accounts:

Societies are required to get their accounts audited by a practicing Chartered Accountant once in a year. Auditors are required to prepare and sign the report of their observations after auditing the account books.

If the Society fails to get the accounts audited, the Registrar may cause the accounts audited by itself and may charge the cost from the Society.

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