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Society Act

Comparison between society and company

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 fewoffences and penalties have been prescribed Provisionsunder 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 A registered company is a legal entity.

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