SECTION 25 COMPANY REGISTRATION 

Section 25 companies which are incorporated for promoting art, science, commerce, charity to any other useful object. Section 25 companies can organize Public or Private company, having a limited liability under the Companies Act 1956. It to pay a license by the Central government recognized for such purpose. It should also ensure that its benefits are not set as dividend its members. Section 25 Company profits the same benefit as of trust and society which are founded under different laws in India. The main instrument is Memorandum and Articles of association for a Section-25 company. Section 25 has an organization of a member of the company under the act of 1956.

Section 25 Companies have a strong organizational structure:

• Indian Trusts have no central law.
• Indian societies have various legal frameworks from state to state.
• Section 25 Companies have one uniform law across the country Companies Act 1956.

Three criteria of Section 25 Company:

1. Its purpose should be only to promote commerce, art, science, religion, charity or any other useful object.
2. It should mean to apply its profits or other incomes only in make its objects.
3. Central government should have present a license to such a company recognizing them as such.

The Objective of section 25 Company:

• Indian Companies Act, 1956 and it is a registering company.
• Memorandum of Articles of association and regulations is the main document of section 25 company registration.

Advantage of Section 25 Company:

• Name of the edition is not essential.
• Not necessary to stamp their Memorandum & Articles of Association.
• Notice for AGM to be given for a short period of 14 days only.
• Section 25 Company has been released from this arrangement provided the time place and date of the AGM has been decided beforehand by the Board of Directors having the judgment to the direction given by the company in a General Meeting. They are free to determine the date, place and time of its AGM according to their benefit and feasibility
• A Section 25 Company is permission to send the required documents at least fourteen days before the date of the meeting instead of 21 days [vide Notification No. GSR 73 dated 30-12-1965].
• Every 6 months, board meetings to be held but should have held 4 meetings in a year. Free to condition & hold the place, time & date of Annual General Meeting.
• Very low fees are required to be paid in comparison to other Companies for registration. At present Rs. 50 is necessary to be paid.

The Disadvantage of Section 25 Company:

• Its objects cannot change stream in the Memorandum without taking before written approval of central Government.
• A Section 25 Company has to ensure that its profits and all other incomes are applied only for promoting the objects and not for any other objective.
• Section 25 company should also confirm that its profits are not distributed as a dividend to its members.
• Section 25 company compare to other business forms, it is expensive to incorporate and run a Company.
• Section 25 Company is regarded as a 'company' within the meaning of the Income Tax Act, 1961 and as such its income is taxable according to the correct rates like to those applying to other companies.

Procedure for Registration of Section 25 Company

• The first step is to get Director Identification Numbers for all the proposed directors of the company. Three minimum directors are required for the company.
• After DIN Nos has been earned, the next step is to apply for name approval of the company.
• When the company name is approval then an application has to be made to the ROC in form 24A along with connecting with documents for getting the license for covering of work private limited and the registration of the company as section 25 company.
• After license is obtained from the registrar of Companies, then file Memorandum of Articles of Associate and necessary forms and requires to be filed ROC and Certificate of Incorporation obtained.

Documents Required for Section 25 Company

• List of the names, addresses and occupations of the promoters, members of the board of directors. (three copies)
• List of the name of companies, organization and, other institutions in which promoters of the applicant company are directors or hold positions, description of the positions held by them (three copies)
• Two copy passport size photograph and photo identification proof (Pan card, voter card) of directors.
• Address proof of the director
• Memorandum and Articles of Association.
• Three copies of accounts, balance sheet, and reports on working of association for the last two financial years.
• Sources of income of the company and, calculation of annual income and expenditure.
• A certified copy of the notice to be published in newspapers
• Director Identification No (DIN) for all directors.
• A statement of assets, liabilities and responsibilities.
• Declaration by each of the promoters making the application.
• Declaration signed by an Advocate / Chartered Accountant / Company Secretary on non-judicial stamp paper of applicable value.
• A statement which the application is made under section 25 of the Companies Act, 1956;

Application Fee for Section 25 Company

Section 25 company application fee should be accompanied by a draft for Rs. 500/- drawn in favour of “pay Accounts Officer, Department of Company Affairs”. To get more information, contact our expert team.