CHARITABLE ORGANISATIONS UNDER SECTION 25 OF THE COMPANIES ACT, 1956:-ADVANTAGES AND DISADVANTAGES
Section 25 of the Companies Act, 1956, provides for formation of companies for the purpose of promoting Commerce, Art, Religion, Science, Charity and other useful objects. Many people form charitable organisations in the form of companies also. In the case of companies, the statutory compliance is much more than compared to trust or a society. Hence the chances of mismanagement are less. Normally chambers of commerce and trade bodies are registered under this section. This is not a very popular form of charitable organization for common people.
Section 25 company is more stable than a society but less rigid than a trust Amendments to the objects can be made by invoking the provisions of the Companies Act, 1956.