COSIA is a non-profit company registered under section 25 of the Companies Act, 1956.
A company incorporated under Section 25 of the Companies Act 1956 is:
1. a voluntary association of people for promoting commerce, arts, science, religion, charity, etc.
2. wherein no profits or other income is distributed to its members by way of dividend, etc.
3. such a company is not required to suffix the term “limited” or “Private limited” to its name.
Under Indian law, 3 legal forms exist for Non-Profit organizations:
3. Section 25 Companies
Due to a better laws, Section 25 companies have the most reliable and strongest organisational structure:
1. Indian Trusts have no central law.
2. Indian Societies have different legal and institutional frameworks from state to state.
3. Indian Companies (incl. Sec 25 companies), have one uniform law across the country - Companies Act 1956.
It is this robust Act that regulates the formation, management and accountability of a Section 25 company, thus making it more closely regulated and monitored than trusts and societies, and recognised all over the world.
|SECTION 25 COMPANY||SOCIETY||TRUST|
|Non-profit activities||Charitable, Literary, Scientific, etc||Charitable, Socially beneficial|
|Indian Companies Act 1956||Societies Registration Act 1860||Bombay Public Trusts Act 1950|
|Complex legal procedure||Simple procedure||Normally only Settlor can modify|
|Complex procedure, 3-6 mths.||Simple and easy||Simple and easy|
|Formalities of Company law have to be observed.||Few restrictions imposed under the Act||Very few restrictions imposed under the Act|
|To be held as per provisions of law which are quite extensive.||Annual meeting as per law and Rules of the society||No provisions laid down|
|Various offences and lapses attract severe penalties.||Few offences and penalties have been prescribed||Very negligible|
|Full legal status||Legal status with certain limitations||Legal status with limitations|
|Exhaustive but mature||Very limited||Nominal|
|Not possible without consent||Possible without consent||Not applicable|