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 | A registered company is a legal entity. |
