12 May 2008
Suppose a society registered under the Societies Registration Act 1860 is making members for a fee and thereafter accpeting daily deposits and monthly deposits and the collections are then invested in various profitable ventures in all fields and fro those ventures the committments on daily deposits and monthly deposits maturity are being met. The profits arrived from these operations are used to meet all administrative expenses and remaining profit is either distributed amongst members or retained for ploughing back.
In the above case is the society required to have any compliance with the Reserve Bank of India ?
13 May 2008
IT IS WELL SETTLED FACT THAT AS LONG AS THE REGD. SOCIETY SPENDS THE ENTIRE EARNINGS FOR BENEFIT OF MEMBERS AND WELFARE OF MEMBERS AND IF THERE IS NO COMMERCIAL MOTIVES BEHIND ITS ACTIONS , THERE IS NO PROBLEM. WE NEED TO ENSURE THAT ACCEPING DEPOSITS FROM MEMBERS IS CONTAINED IN THE BYELAWS OF THE SOCIETY.OTHERWISE IT IS BEYOND THE SOCIETY'S FIELD OF ACTIVITIES AND IS NOT PERMITTED. RBI IS NOT IN THE PICTURE.ENSURE THE SOCIETY REGISTRATION ACT PROVISIONS IF APPLICABLE ARE NOT VIOLATED. R.V.RAO
CAclubindia
