3 Similarities and Differences Between a Society/Apartment Association and a Commercial Company

by Vishnu

Manpower is the building block for running a commercial corporation or for the takeover of a society or apartment Association. No traditional corporation or apartment management system can function without resources. It is the connecting thread between the two that streamlines business operations like a cakewalk. The supervisory management board stands top in the hierarchy chain, ensuring smooth operations rundown of both employees and housing society residents respectively. However, pointing out the similarities alongside differences in the matter of affairs that separates society RWAs from corporation stakeholders is a rundown of this article.


What puts an apartment Association into the shoes of a commercial Company goes to the extent of these three similarities between both foundations below –

  1. Companies are formed of shareholders who contribute funds for the sustenance and growth of the entire corporation. Similarly, the entirety of society/apartment associations comprises members who hold shares of the property, as residents of the apartment and contribute funds for the maintenance and betterment of the property.

  2. The governance of a Company is supervised by a board consisting of majority shareholders. It shares a distinct matter of governance to that of a society or apartment association which is also supervised by a Board (or Management Council/Executive Council etc.), formed via nomination or election within the community.

  3. A Company is administered by local laws of the country and state. It pays relevant taxes, submits its audited financials to the Regulatory Body, changes in shareholding, etc. It has governing documents in the form of Certificate of Incorporation, Articles, and Memorandum of Incorporation. Similarly, any society/apartment association is also governed by the local laws and pays relevant taxes. It also submits its audited financials to the governing body, changes in ownership, etc. The Homeowners Association (HOA) also has governing documents in the form of By-Law Documents, Articles of Incorporation, Declaration of Covenants, Conditions, and Restrictions. Like companies, these documents vary by country in which the Property Owners Association is located.


Although the similarities are eye-catching between both foundations, check out these 3 differences that set a company apart from an apartment association below –

  1. A Company is typically aimed at For-Profit, and its services are aimed at entities different from its Shareholders – i.e., Customers. This is true for Non-Profit companies as well where the services are provided to Entities different from the Shareholders. On the other hand, a Homeowners Association is almost always Not-For-Profit, as its services are aimed mainly at its own members who are the owners of the property, i.e., residents.

  2. The major income of any Company is from the revenue it generates due to the sale of services or products to its customers. But the society/apartment association generates its major portion of income and revenue from the regular contribution of funds from its members, in return for the Association’s service of immediate conveniences such as security and cleaning of common area, long-term services for infrastructural upkeep, common amenities, and betterment initiatives, etc.

  3. A Company is a growth-driven profit center where the operational focus is greater on revenue and relatively lesser on cost management. On the flip side, a full-fledged society/apartment Association is a sustainability-driven cost center with greater accounting focus on budgeting, timely collection of member contributions, and transparent expense management. This is due to the fact that the apartment/society association has predictable though limited fund inflow. 

The Final Take

At the basic level, handling society management operations cannot be lined against that of commercial companies in terms of physical or financial assets as resource management takes a higher seat in the latter. But what glues them together is the central management board owing to certain differences and similarities as discussed above. So, if you are a homeowner or an integral elected member of a society or apartment association who drives on core management resources, your job becomes almost equivalent to that of a corporate stakeholder.

At ADDA, we take complete responsibility for managing community Associations with the best society management system. Reach out to our experts at sales@adda.io or 022-48905764 for a complimentary demo.

About ADDA

ADDA is the only community management SaaS built in India, uplifting thousands of living communities, property managers, developers, and billions of homeowners across 6 countries worldwide.

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