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Registration of Company U S 25
Section 25 companies are those companies which are formed for the sole purpose of promoting commerce, art, science, religion, charity or any other useful object and have been granted a license by the central government recognizing them as such. Such companies should intend to apply its profits, if any or other income only in promoting its objects and must also prohibits payment of dividend to its members.
Thus there are three criteria for determining whether a particular company is section 25 company or not:
- Its objects should be only to promote commerce, art, science, religion, charity or any other useful object.
- It should intend to apply its profits or other incomes only in promoting its objects; and
- Central government should have granted a license to such a company recognizing them as such
An application in form 1A is to be made to the Registrar of Companies along with a fee of Rs. 500/- Desired names for the organization in the order of preference are to be mentioned in the application form. Normally, the Registrar inform about the availability of the name within 7 days.
Following documents are required
- Draft of the Memorandum and Articles of Association. (in triplicate).
- Details such as name, address, occupation of the promoters. (in triplicate).
- List of companies, associations in which the promoters are directors or hold responsible position with the description of the position held.
- List of the proposed members of the Board of Directors.
- Declaration signed by an Advocate / Chartered Accountant / Company Secretary on non-judicial stamp paper of appropriate value.
- The proposed sources of income and the expenditures thereof.
- A note on the proposed activities and also the past activities, if any.
- A statement of the grounds for making an application under section 25. In this statement a reference to the relevant clause in the Memorandum of Association regarding the Vision and Mission of the proposed company should be made.
- Declaration signed by all the promoters on non-judicial Stamp Paper of appropriate value.
- In case of an existing society applying for conversion into a section 25 company, audited statement of accounts and annual report of the society for the past two years (in triplicate) should be submitted.
- A certified copy of the notice to be published in newspapers.
- Within one week of making an application to the Regional Director a notice is required to be published in one English newspaper and one vernacular newspaper of the local area in which the Registered Office is situated.
Grant of License and Certificate of incorporation
The Regional Director scrutinizes the application received by him. The Registrar of Companies, to whom a copy is sent, also forwards his recommendations to the Regional Director.
The Government by issue of license allow an association be registered as a company with limited liability for the members, without the addition to its name of the word "Limited" or the words "Private Limited".
After receiving the license / approval an application is to be made to the Registrar of Companies (ROC) along with following documents:
- Printed copy of the Memorandum and Articles of Association.
- The license granted by the Regional Director.
- One copy of Form 1
- One copy of Form 18
- Two copies of Form 32
- The requisite amount of fees payable which is Rs. 50 plus Rs. 10 per document; i.e., Form1, Form 18, Form 32.
- The Registrar of Companies after scrutinizing the requisite documents shall issue a Certificate of Incorporation.
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