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A
society is a non-commercial organization, form for the promotion
of the object like art, culture, science, religion etc.
Under
the provisions of Section 25 of the Companies Act, 1956, a company
can also be formed for non-profit objectives. These may not
be charitable. These companies are also allowed to drop the words
‘limited’ or ‘private limited’ from their names. The promoters while
deciding whether to register themselves as a society or as section
25 company may keep the following distinctive feature in mind:
Features
Society
under Societies Registration Act, 1860
Company
under Section 25 of the Companies Act, 1956
Objects
Charitable,
literary, scientific, etc,
Non-profit
activities
Formation
Procedure
is simple and easy
Procedure
is complicated
Name
Selection
of name is not difficult
Name
has to be got approved from the Registrar of the Companies
Management
Management
of society is easy and simple and not much restrictions imposed
under the Act
Provisions
of the Companies Act have to complied with and/or complex
and laborious, rigid and time consuming
Meetings
Annual
meeting of society has to be held as per provisions in the
Act. Meeting of governing body are held as prescribed in the
rules of the society
All
the meetings are to be held as per provisions of the Companies
Act, 1956
Penalties
Very
few offences and penalties have been prescribed
Provisions
under the Companies Act are more stringent and attract more
penalties.
Reputation
Registered
societies enjoy same reputation as companies
Companies
enjoy reputation of status
Legal
Entity
A
registered society is a legal entity with certain limitations
This web site is designed for general information
only. The information presented at this site should not be construed to be formal
legal advice nor the formation of a lawyer/client relationship. Persons accessing
this site are encouraged to seek independent counsel for advice regarding their
individual legal issues or consult one of the experts online.
