Recreational club is an association of people united by a common interest or goal for their mind refreshments. These clubs are special interest activities that focus more on the institutional aspects and recreational play of sports or recreational nature of the club activities they are associated with. These clubs can be formed either under the Societies Registration Act, 1860 or under the Companies Act 2013. The objects of such clubs should be in lawful purpose in consonance with the said Acts.
The Non-Profit Recreational Club is composed of by a group of individuals who each contribute to the club's funds, which are used to pay the expenses of conducting the society. This type of clubs can be registered either under the respective state law of Societies Registration Act or sec.8 of the Companies Act 2013. The profit of such clubs whenever derived shall be applied solely towards the benefits of the club or otherwise in the promotion of the objects of the club as set forth in the Memorandum and Articles of Association and no portion thereof shall be paid by way of dividend or bonus to the members of the club.
A proprietary club is one whose proprietor owns the property and funds and conducts the club to attempt to make a profit. The members are entitled to use the premises and property in exchange for the payment of entrance fees and subscriptions to the proprietor as well as any additional rights and privileges provided in their contractual agreement. This type of proprietary clubs is to be registered under the Companies Act 2013 like other profit oriented companies and the profits derived thereof shall be paid by way of dividend or bonus to the members of the company/club.
Documents required for registration under Society Registration Act:
- A requisition letter in Form No.I requesting registration of the organization.
- A Memorandum of Association specifying:-
(a) The name of the society.
(b) The objects of the society and
(c) The names, addresses and occupation of the members of the committee
- Authorization letter of the club authorising any one of the member to submit the application for registration to registrar of society
- The bye-laws of the society, which must reflects the head office address, a clear listing of membership details of the society including eligibility, admission and withdrawal of membership, the general body details, financial details along with funds to be raised and appointment of auditors and liability of members, all internal matters of settlement and dissolution also need to be listed in the bye-laws.
Maintenance of Accounts and Registers:
Every society/organization registered under the said Act should maintain the following documents and registers for the transparency of its administration.
- Cash book.
- Receipt book.
- Vouchers file.
- Ledger.
- Monthly register of receipts & expenditure.
- Annual General Body Meeting minute book.
- Governing committee meeting minute book.
- Register of members.
The books of every registered society shall at all reasonable hours be open to inspection by the Registrar or by any person authorized by him on this behalf.
Filing of Annual Returns after registration:
- Every registered club shall file its annual returns within 6 months after the date of Annual General Body Meeting.
- Details of annual returns are:-
• An authenticated copy of receipt and expenditure Account, Balance sheet and report.
• A list of names, addresses and occupation of members at the expiry of financial year in for VI.
• A declaration to the effect that the society has been carrying on its business during the financial year.
Details of documents to be filed other than annual returns:
- Change in membership.
- Election of Executive committee / change in committee members.
- Special resolution.
- Particulars of mortgage or change created by a society (Form VIII)
Any registered society which makes default in complying with any of the requirements of this Act shall be punishable under this Act. A registered society shall spend out its funds on purposes authorized by this Act or its by-laws after getting due approval from it General Body. The name of the society, which has not filed its annual returns may get struck off from the register by publishing a notice in the Tamil Nadu Government Gazette. If there is a delay in filing certain document, the same may be condoned by registrar of society by remitting fine amount. The Amount of fine and filing fees shall be payable through Demand Draft or online payment.
Clubs under Companies Act:
The non-proprietary clubs can be formed under section 8 of the Companies Act, 2013, allows a mechanism through which a Company can be registered with a limited liability if such company is formed for promoting the said objectives of clubs provided it intends to apply the income and profits in promoting the said objects. Also that the members cannot be paid any dividends from the profits. The registration of such a charitable company is similar to registering of other private limited companies in exception of an additional licences requirement stipulated in the same section.
The proprietary clubs can be formed under section 7 of the companies Act 2013 provided it intends to derive profits for the services rendered and the members are paid dividends and bonus from the profits on basis of share equity. The aim of such clubs is to earn profits like the other private limited companies.
Advantage of registration of club:
- By virtue of being a registered body, it can get legal entity and legal status and can acquire and hold property in its own name.
- It can initiate and contest a suit in its name against the third party and vice-versa.
- If it is a social service oriented and charitable purpose organization, it can claim benefits ie., tax exemption under sec.12A and 80G of Income Tax Act from the government.
- It can generate funds from philanthropist in abroad by registering the club under Foreign Contribution Regulation Act (FCRA).
- It can secure liquor bar licence from the state government.
In case the recreational clubs wants to give a bar facilities to its members then such clubs must holds a valid licence under the state laws and in Tamil Nadu such license is to be obtained in Form F.L.2 to run a bar in terms of the Tamil Nadu Liquor (Licence and Permit) Rules, 1981.
Registration Boss is owned by highly experienced advocates expertise in the field of forming and guiding registration of recreational clubs and post registration compliances like filings of annual returns, amendments, resolutions, adding members etc. We also providing our clients a complete guide to form and register for such recreational clubs and proprietary clubs and further follow up for active running in order to get license for liquor bar, public building license for club building, license for playing games(rummy card) and entertainments and obtain exemption under Income Tax Act and Foreign Contribution Regulation Act. We are successfully helping our clients to register and further follow up for filing of annual returns on all purpose of clubs/organizations. We have satisfied clients pertains to registration and administration of recreational clubs in Kanyakumari District and around Tamil Nadu. For any assistance required to prepare and register a Memorandum and Articles of Association for recreational clubs under Society and Companies Act, you may contact to our Registration Boss…
