Industrial & Provident Society Registration

What is industrial & Provident society’s registration?

Industrial & provident society is an organisation incorporated to carry out trade for the benefit or welfare of the community. Like companies, IPS is a corporate body which is not registered under the company’s act and regulated by financial services authority (FSA). IPS is governed byco-operative and community benefit societies and credit unions act, 1965 (formerly known as industrial & provident societies act, 1965). It is run for the benefit of its members and the surplus profits are not distributed but retained for the welfare of its members. The main objective of a cooperative society is to work for the welfare of the community rather than earning profits. Businesses also need to provide a reason that why they want to register as an IPS rather than a company.

Which type of companies can be incorporated as IPS’s?

The companies which can be incorporated as IPS’s are as follows –

• Consumer agricultural & housing co-operatives
• Women institutes
• Allotment societies
• Markets
• Working men’s clubs
• Mutual investment companies
• Housing associations
• Friendly societies

Types of industrial & provident societies

There are two types of industrial & provident societies –

1. Bona fide co-operatives societies, now known as co-operative societies.
2. Community societies for the benefit of the community known as community benefit societies.

1) Co-operative societies – In case of co-operative societies, business is owned and self-governed by its employees. A co-operative society should have at least 2 members. It is based on 7 basic principles out of which the most important one is fulfilling the welfare of the community. However, profit earning is mandatory for every co-operative society to become successful.

2) Community benefit society– Community benefit society is incorporated for the benefit of the community. You need to ensure that you are benefitting the community at a wider scale rather than only its members. You also need to mention the reason of registering as an IPS rather than a company.