INDIA Law and Practice Contributed by: Rishabh Shroff, Kunal Savani and Chirag Shah, Cyril Amarchand Mangaldas
changed by way of special resolutions and provides for democratic participation from a larger number of people. However, there may be a lack of stability in a large organised charity in the form of a society as it is not possible to have office-bearers for life, and there are greater chances of interference from state authorities on compliance in societies. Section 8 Companies Section 8 of the Companies Act, 2013 provides for the formation of a company with the objective to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environ - ment or any such other objects. Any kind of profit or income of a Section 8 company must be applied only for the promotion of the objects of the company. Consequently, the members of the company are not entitled to receive any dividend and require a special licence by the Central Government.
A company is more stable than a society but less rigid than a trust. It is possible to amend the objects as well as powers relating to the management of the company by amending the charter documents of the company according to the procedure provided in the Companies Act, 2013. However, a charitable organisation in the form of a company must comply with all the formalities under company law for its registration, management and so on.
262 CHAMBERS.COM
Powered by FlippingBook