The Ministry of Corporate Affairs has issued a comprehensive Standard Operating Procedure (SOP) for voluntary dissolution of societies, marking a significant reform in non-profit governance. The 15-page framework mandates triple-layer verification – including member consent audits, asset valuation reports, and clearance certificates from tax authorities – to prevent fraudulent wind-ups. This comes after investigations revealed ₹420 crore was misappropriated through abrupt society dissolutions in Maharashtra alone last year.

Key changes include a mandatory 90-day cooling period for creditor claims and digitized tracking of dissolution proceedings through the newly launched Societies Compliance Portal. Registrars now require video-recorded general body meetings when approving dissolutions. “These protocols will curb the rampant practice of vanishing societies after misusing government grants,” explained Delhi Registrar Meena Kapoor. The SOP particularly targets FCRA-registered societies, requiring additional NOC from the Home Ministry.

While legal experts welcome the structured approach, smaller societies have raised concerns about increased compliance costs. The Indian Federation of Societies has requested simplified procedures for organizations with assets under ₹10 lakh. The government has announced state-level workshops to train registrars on implementing the new system, with special attention to high-risk districts identified by the Financial Intelligence Unit.