The Ministry of Law and Justice has released a draft bill proposing legal recognition for partnership-based societies, marking a significant development in India’s nonprofit and cooperative legal framework. The proposed legislation—The Societies (Regulation and Recognition) Bill, 2025—seeks to modernize the existing Societies Registration Act, 1860, and accommodate emerging forms of social enterprises and grassroots collaborations.

For the first time, the draft bill explicitly provides for the registration of societies formed as partnerships, allowing such entities to combine the flexibility of the partnership model with the nonprofit objectives of traditional societies. This inclusion is aimed at enabling more collaborative models for delivering education, healthcare, community development, and environmental programs, particularly in rural and semi-urban regions.

Under the draft provisions, a partnership-based society must register with a written deed, declare a not-for-profit objective, and comply with transparency norms similar to other registered societies. It must also disclose partner roles, financial contributions, decision-making protocols, and asset ownership structures to qualify for recognition.

“The bill is designed to support evolving community-based models of development, many of which operate informally as joint ventures or partnerships,” said a senior official in the legislative department. “This legal framework will give such groups formal identity, regulatory access, and safeguards for internal accountability.”

Legal experts believe the move will benefit self-help groups, youth collectives, art cooperatives, and social ventures that operate through informal partnership arrangements but lack legal status to receive grants, own property, or enter contracts. The draft bill also proposes tax recognition, eligibility for government schemes, and dispute resolution mechanisms for these entities.

The government has invited public comments on the draft bill until June 30, 2025. If passed, the new law could bridge the regulatory gap between informal partnerships and traditional nonprofit structures, offering a modernized pathway for socially driven collaborations in India.