Societies Registration Act, 1860


Registration Act [XXI of 1860]

Section 20—

society can invest its unspent money for getting more money to be spent in
charity and when there is absolutely no bar under the Societies Registration
Act and when the Memorandum of Association of a society has authorised the same
to invest their money not immediately required the same may be invested.

BRAC and
others vs Professor Mozaffar Ahmed and others 54 DLR (AD) 36.


Societies Registration Act, 1860


Registration Act, 1860


and 10

society registered under the Societies Registration Act is to be guided by the
Act and its own memorandum of association. While registering the society, the
Registrar of Joint Stock Companies did not find anything wrong with the
memorandum of association or any of its articles to be against the Act. A
charitable society can invest unspent money for getting more money to be spent
in charity, as there is no bar in the Act and when its memorandum of
association has authorized the society to invest its money not immediately
required. (Per Mahmudul Amin Choudhury, CJ)

investment of BRAC of its money not immediately required in BRAC Bank Ltd. is
not an activity as envisaged in section 20. It is an investment under its
memorandum of association in order to augment its resources for more
efficiently achieving the objects for which it was incorporated. So, no
amendment of section 20 is necessary. (Per Mainur Reza Chowdhury. J)

has been registered under the Act with the object to engage itself in
charitable purposes and social welfare activities strictly on non-profit basis.
By its investment in BRAC Bank, BRAC has gone for purely commercial activities,
which is not permitted by its memorandum. In the event of bankruptcy of BRAC
Bank the charity money would be lost if not totally but substantially, and the
memorandum of BRAC does not contemplate investment of its assets or money where
the loss of such investment is probable. Unless an amendment is made to the
Act, it is not permissible for societies to go for commercial undertaking. (per
Md. Ruhul Amin, J, dissenting)

Professor Mozaffar Ahmed and others, 22 BLD (AD) 41.



Donation (Voluntary Activities) Ordinance, 1978


scrutiny of section 20 of the Act and section 2(d) of the Ordinance will
establish that the purposes for which a society is registered under the Act and
assistance is given to an organisation under the Ordinance, are basically
non-profit making and voluntary in nature. They can engage in activities with
service oriented zeal to the community without entering into purely commercial
venture. Allowing BRAC to purchase shares of BRAC Bank will cause a metamorphosis,
changing BRAC from a society to a company which is not legally allowed. Not
only that, there will also be probability of plethora of laws, like Bankruptcy
Act, Income Tax Act, etc. coming into conflict with the Societies Registration
Act, resulting in serious legal complications in future.

otherwise authorised, no new territory can be included in section 20 of the Act
and section 2(d) of the Ordinance which specifically provide for a society to
engage in the fields set out therein and they do not contemplate undertaking of
investment of money in purchasing shares in a corporate entity like a banking
company. BRAC is neither empowered by any legislation, nor allowed by its
Memorandum and Articles of Association, nor authorised by the Societies Registration
Act nor by the Foreign Donation (Voluntary Activities) Regulation Ordinance,
1978, to buy shares to own, promote or control a bank.

Muzaffer Ahmed Vs Bangladesh Bank & others, 20 BLD (HCD) 235.