“A pastor running an unlawful society.”
That’s the charge heard in a recent court case. It turned out that the “unlawful society” was actually a church! A church that was registered as a society with the Registry of Societies (ROS) but that was subsequently deregistered. Since the church continued to operate in the same name and place, it was regarded as an unlawful society. Many Malaysian churches are registered with the ROS. The recent spate of deregistration has raised question marks over this whole issue of the relationship between churches and the ROS.
In this article, we attempt to clarify the major issues.
Does a church have to be registered as a society?
Article 11(1) of the Federal Constitution very clearly states, “every person has the right to profess and practise his religion and, subject to Clause (4), to propagate it”. The right to practise religion must include the right to congregate together in the carrying out of religious practice. Article 11(3)(a) says that “every religious group has the right to establish and maintain institutions for religious or charitable purposes”. The word “institutions” must necessarily include churches, temples and the like. The very expression “religious group” used here already assumes that religious practice is often a group experience.
No conditions are found in Article 11 or in the rest of the Constitution that require a religious group to form a legal association before they can be regarded as lawful.
On top of this, Article 11(3)(a) of the Federal Constitution states, “every religious group has the right to manage its own religious affairs”. This implies that these groups cannot be compelled to form legal associations as in doing so they subject themselves to many additional requirements. For example, by incorporating as a company or registering as a society, religious groups make themselves subject to all the requirements of the Companies Act 1965 and the Societies Act 1966, respectively.
They are also subject to the authority of the Registrar of Companies and the Registrar of Societies who may direct them to do certain acts or comply with certain conditions.
If it is felt that a conflict exists between the Societies Act 1966 and the Federal Constitution, this is resolved by Article 4(1) of the latter. It says, “This Constitution is the supreme law of the Federation and any law passed after Merdeka Day which is inconsistent with this Constitution shall, to the extent of the inconsistency, be void”.
NECF Malaysia’s stand is that churches do not need to be registered as societies.
"Registered churches should take extra care not to give grounds for complaints leading to deregistration."
Why do churches want to be registered as societies?
One reason is fear that if they don’t register, they may be breaking the law. As explained above, we hold that they are not breaking the law.
Churches may also wish to acquire legal personality to enter into commercial transactions and to exercise legal rights as a group. Registered societies may also find it easier to apply for various permits from government authorities, such as converting land designated for residential purposes into property for religious purposes, bringing in foreign missionaries or speakers, and others.
What are the risks of registering as a society?
A registered society runs the risk of deregistration. A single complaint from a disgruntled member on the ground of some technicalities is sometimes enough to bring about deregistration.
The Registrar of Societies may cancel the registration of a society for various reasons. Deregistration can happen, for example, if a society has willfully contravened any provision of the Societies Act 1966 or of any regulation made under it (such as Societies Regulations 1984) or of any of its own rules. (Section 13(1)(c)(iv)) This is very broad. A society can also be deregistered for failing to comply with additional orders of the Registrar or if it is unable to settle an internal dispute.
When a society is deregistered, it becomes an unlawful society. Every branch of that society also becomes unlawful.
Note that a society that is denied registration (upon application) for whatever reason(s) also becomes an unlawful society.
The property of the deregistered society will be vested in the Official Assignee for the purpose of winding up the affairs of the society, which includes providing for all debts and liabilities of the society and the costs of winding up before paying out the surplus.
Registered churches should take extra care not to give grounds for complaints leading to deregistration. In any case, NECF is arguing that a church that is deregistered can still operate as a church (under Article 11 of the Federal Constitution), though not as a society. It will revert to its initial or primary constitutional status. Again, there’s a battle to fight here.
"When a society is deregistered, it becomes an unlawful society. Every branch of that society also becomes unlawful."
What are the alternatives to registration?
Article 11(3)(c) of the Federal Constitution says that “every religious group has the right to acquire and own property and hold and administer it in accordance with law”.
By virtue of Section 43 of the National Land Code 1965, only four groups of persons or bodies are eligible to hold and deal in land (immovable property) in Malaysia, namely:
- Natural persons other than minors;
- Corporations having power under their constitutions to hold land;
- Sovereigns, governments, organi-sations and other persons authorised to hold land under the Diplomatic & Consular Privileges Ordinance 1957; and
- Bodies expressly empowered to hold land under any other written law.
Section 9(2)(d) of the Societies Act expressly allows societies to hold land in their name. Some churches also incorporate themselves as companies, usually private companies limited by guarantee. This comes under (b).
Setting up a trust is another possibility, which comes under (d). A trust is an arrangement under which property is given to one or more persons (called the trustee or trustees) to use or apply the property and the income from it, for other persons (the beneficiaries).
A trust can be easily created. Members of a church can appoint one or more trustees by resolution of a general meeting. A memorandum of this resolution should be drawn up and signed either at the meeting by the person presiding, or afterwards and witnessed by two people who were present at the meeting.
A trust deed can also be prepared by an experienced and competent legal practitioner at the request of the church members or a committee formed for the purpose of appointing a trustee. The deed should precisely state the purpose of such a trust, the subject matter or trust property, and the beneficiaries.
However, the church must ensure that the trustees appointed are capable as well as trustworthy because of the extensive power they hold. While church members can sue for breach of trust, the process can be lengthy and involves many complications.
The trustees can also apply for a certificate of registration as a corporate body and this may be granted under the Trustees (Incorporation) Act 1952 (applicable in Peninsular Malaysia only).
The trust will then enjoy the benefit of perpetual succession, a common seal, power to sue or be sued in its corporate name and transact other business in its corporate name. Incorporation, however, is not strictly necessary.
The issue with movable property is more easily resolved. For example, NECF Malaysia has an understanding with Public Bank whereby its banks allow churches to open accounts in their names with a support letter from NECF.
This aside, a non-registered church that is a member of a recognised organisation may get the necessary clearance with the support from the parent organisation. (If the church has set up a trust, all property can be held under the trust.)
This is also true when it comes to obtaining other approvals. NECF has helped many member churches with various kinds of applications.
Churches should intelligently and prayerfully consider the available options.