COMPANY INDIA

 

Government of India has now allowed companies registered as non-profit entities under section 25 of the Companies Act to establish educational institutions.

Section 25 of the Companies Act allows formation of a company as a not-for-profit organisation to promote commerce, art, science, religion, charity or any other useful activity.

Companies registered under section 25 as education companies can make surplus from education activities but cannot divert it for any purpose other than expanding the same institution.

Companies  have been demanding this change as the present law forcing them to form trusts or societies to establish educational institutions is cumbersome. Now, they need not go through this circuitous route.

It is perceived that this change  one more step in the process of reforming the education sector and will now make it easier for many corporates to enter the education arena.