Section 25 Company

Section-25 Company
According to section 25(1)(a) and (b) of the Indian Companies Act, 1956, a section-25 company can be established ‘for promoting commerce, art, science, religion, charity or any other useful object’, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members. 

Legislation : Section-25 companies are registered under section-25 of the Indian Companies Act. 1956.

Main Instrument : For a section-25 company, the main instrument is a Memorandum and articles of association (no stamp paper required) 

Trustees : A section-25 Company needs a minimum of three trustees; there is no upper limit to the number of trustees. The Board of Management is in the form of a Board of directors or managing committee. 

Regional Director Approval ( 20 days time)
Once name availability is onfirmed, an application should be made in writing to the regional director of the company law board. The application should be accompanied by the following documents: 
Three printed or typewritten copies of the memorandum and articles of association of the proposed company, duly signed by all the promoters with full name, address and occupation. 

A declaration by an advocate or a chartered accountant that the memorandum and articles of association have been drawn up in conformity with the provisions of the Act and that all the requirements of the Act and the rules made thereunder have been duly complied with, in respect of registration or matters incidental or supplementary thereto.

Three copies of a list of the names, addresses and occupations of the promoters (and where a firm is a promoter, of each partner in the firm), as well as of the members of the proposed board of directors, together with the names of companies, associations and other institutions in which such promoters, partners and members of the proposed board of directors are directors or hold responsible positions, if any, with description of the positions so held. 

A statement showing in detail the assets (with the estimated values thereof) and the liabilities of the association, as on the date of the application or within seven days of that date. 
An estimate of the future annual income and expenditure of the proposed company, specifying the sources of the income and the objects of the expenditure. 

A statement giving a brief description of the work, if any, already done by the association and of the work proposed to be done by it after registration, in pursuance of section-25. 

A statement specifying briefly the grounds on which the application is made. 

A declaration by each of the persons making the application that he/she is of sound mind, not an undischarged insolvent, not convicted by a court for any offence and does not stand disqualified under section 203 of the Companies Act 1956, for appointment as a director.
3.The applicants must also furnish to the registrar of companies (of the state in which the registered office of the proposed company is to be, or is situate) a copy of the application and each of the other documents that had been filed before the regional director of the company law board. 

4.The applicants should also, within a week from the date of making the application to the regional director of the company law board, publish a notice in the prescribed manner at least once in a newspaper in a principal language of the district in which the registered office of the proposed company is to be situated or is situated and circulating in that district, and at least once in an English newspaper circulating in that district. 

5.The regional director may, after considering the objections, if any, received within 30 days from the date of publication of the notice in the newspapers, and after consulting any authority, department or ministry, as he may, in his discretion, decide, determine whether the licence should or should not be granted. 

6.The regional director may also direct the company to insert in its memorandum, or in its articles, or in both, such conditions of the licence as may be specified by him in this behalf.

ARTICLES OF ASSOCIATION: 5 days time

The Articles of Association (AA) contain the rules and regulations of the company for the management of its internal affairs. The Articles lay down the rules, conditions and regulations for achieving the objectives and purposes as prescribed by the Memorandum of Association. The AA is nothing but a contract between the company and its members and also between the members themselves that they shall abide by the rules and regulations of internal management of the company specified in the AA. It specifies the rights and duties of the members and directors.

DIRECTOR IDENTIFICATION NUMBER: 7 days time

We need to apply for Director Identification number which takes around one week time without which we can not apply for name availability. Director Identification number we need on special approval from Ministry of corporate affairs.

DIGITALS SIGNATURE: 7 days time

We need to apply for Digital signatures which take around one week time without which we can not sign on any Registrar of companies form and apply for name availability. Digital signature we need to register with Ministry of corporate affairs.

FEES CLAUSE:Complete incorporation takes 20 days time after regional director approval

The ROC will give the certificate of incorporation after the required documents are presented along with the requisite registration fee, which is scaled according to the share capital of the company, as stated in its Memorandum.
The schedule for the same is as follows:

·        For registration of a company whose nominal share capital does not exceed Rs.100, 000: Rs.4,000.

·        For registration of a company whose nominal share capital exceeds Rs.100,000, the above fee of Rs.4,000 with the following additional fees regulated according to the amount of nominal capital:
     

·        Rs. 300 for every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.1,00,000 up to Rs.5,00,000;

·        Rs. 200 for every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.5,00,000 up to Rs.50,00,000;

·        Rs. 100 for every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.50,00,000 up to Rs.1 crore;

Rs. 50 for every Rs.10, 000 of nominal share capital or part of Rs.10,000 after the first Rs.1 crore.