SETTING UP OF
SECTION 25 COMPANY
 Vinay Gupta
Director
Company India Advisors Private Ltd
email: info@companyindia.co.in
Mobile: +91 9818092002
 http://companyindia.co.in
SETTING UP OF SECTION 25
COMPANY

Section 25 Companies are those
companies which are incorporated for
promoting art, commerce, science,
religion or any other charitable object.

Section 25 Company avails the same
benefit as of trust and society which are
established under different/ separate laws
in India.
What are Section 25
Companies?
Section 25 companies requires license
granted by the central government
recognizing them as such company.

These companies enjoys all advantages
that other limited company registered
under companies act requires.
Apart from that, they also enjoy some
other privileges too.

Basic Details of Section 25
Companies
Benefits of Section 25
Company

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1. No minimum Share Capital is required to register
section 25 Companies.
2. A general meeting can be called by giving a notice
of not less than 14 days in writing.
3. The period for preservation of books of account
and other papers in case of section 25 companies is 4
years immediately preceding the current year.
4. No need of Approval of Central Government for
increase in number of directors beyond 12.
5. Easy to regulate and operate as there are no
interference of RD in day to day affairs of the
company.
Obligations & Limitations on
Section 25 Company
1. A Section 25 Company has to ensure that its profits and
all other incomes are utilized only for the purpose of
promoting its objects and not for any other purpose.
2. It should also ensure that its profits are not distributed
as dividend its members.
3, Section 25 Company cannot alter its objects clause in its
Memorandum without seeking the written approval
of central government.
4, If an existing company obtains a license under section
25 it has to ensure that its objects are confined to those
mentioned in section 25 itself and if not make proper
alteration to its memorandum and articles.
Procedure:
(1)Make application in form 1A to ROC for name approval.
(2)Once the name is approved make an application to Regional
Director for
granting license under section 25.
(3 ) Application should be accompanied by
(a)
MOA and AOA
(b) Particulars about directors
(c) Declaration as per annexure V of the Companies
Regulation Act,
1956.Form 32
(d) The application for registration should be made to the
official
having jurisdiction over the region in
which the trust is sought to be
registered.
Time Duration
It takes around 10-12 working days to complete the total incorporation
process of Section 25 Company.
Dissolution
1. May be dissolve voluntarily….
2. No surplus can be distributed amongst
members post settling liabilities
3. Surplus can be transferred to another Sec
25 Company preferably one having similar
entity
Substitutes of Section 25
Company
(1).Charitable Trust:- The public charitable trust is a possible
form of not-for-profit. Typically, public charitable trusts can be
established for a number of purposes, including the relief of
poverty, education, medical relief, provision of facilities for
recreation, and any other object of general public
utility. Indian public trusts are generally irrevocable. No
national law governs public charitable trusts in India, although
many states (particularly Maharashtra, Gujarat, Rajasthan, and
Madhya Pradesh) have Public Trusts Acts.
(2).Societies:- Societies are membership organizations that
may be registered for charitable purposes. Societies are
usually managed by a governing council or a managing
committee. Societies are governed by the Societies
Registration Act 1860, which has been adapted by various
states. Unlike trusts, societies may be dissolved.
INDIAN COMPANIES LAW:
SECTION 25 COMPANY
Vinay Gupta
Director
Company India Advisors Private Ltd
email: info@companyindia.co.in
Mobile: +91 9818092002
http://companyindia.co.in/