Hey Guys!,
I found some useful stuff with registering section 25 companies.. see if its of some use to u all...
NON - PROFIT COMPANY
A Non-Profit Company can be formed for any non-profit activity. It is identical to an ordinary company in all respects except that it is not established for profit and commercial gain. It is also called a Section 25 Company and is a voluntary association of people, registered under the Indian Companies Act, 1956. The accountability aspect of a non-profit company because of statutory disclosure requirements is a relevant advantage of a company's operational transparency and ability to invoke and maintain public faith.
Objectives of a Non-profit company: -
Objectives of a non-profit company can be including promotion of commerce, art, science, religion, charity or any other useful object. Profits are applied for promoting only the objects of the company and no dividend is paid to its members. (Section 25 (1) (a) and (b) of the Companies Act, 1956). A non-profit company may be Public or Private. If the non-profit company is a private company a minimum of only two members are required to form it. However, if the non-profit from is for a public purpose, then a minimum of seven are needed. A 'Section 25 company' and is eligible for certain exemption from provisions of law and concessional rate of fees etc.
Steps for establishing a section 25 Company
1. Application for a name
Applying for availability of name to the Registrar of Companies is the first step towards registration of the non-profit company. Four names are to be suggested to the Registrar in prescribed Form.
2. Memorandum and Articles
Memorandum and Articles of the non-profit company are required to be approved by the Regional Director and the ROC. The documents required for submission of application are:
i) Three printed copies of the memorandum and articles of association of the applicant company, signed by all the promoters with full name, address and occupation (No stamp duty is payable on the Memorandum and Articles of Association)
ii) 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 there under have been duly complied with, in respect of registration;
iii) List of the names, addresses and occupation of the promoters, members of board of directors, name of companies, associations and other institutions in which promoters of the applicant company are directors or hold positions, descripttion of the positions held by them (three copies)
iv) A statement of assets and liabilities
v) Source of income of the Applicant Company and estimate of annual expenditure;
vi) A statement giving a brief descripttion 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;
vii) A statement on grounds on which the application is made under section 25 of the Companies Act, 1956;
viii) A declaration by each of the persons making the application that he/she is of sound mind, not an undischarged solvent, not convicted by a court for any offence and does not stand disqualified under section 203 of the Companies Act, 1956 for appointment as director.
3. License under section 25
An application for the license under 25 for the company is to be submitted to the Regional Director (Department of Company Affairs). The license essentially permits the word 'Limited' or 'Private Limited' to be deleted from name of the company. It could take upto 12 weeks after application to receive the license under section 25 of the Companies Act 1956. Pursuant to application to the Regional Director (within seven days thereafter), the applicant company has to publish a notice in a newspaper where the registered office is situate and certified copy of the notice to filed with the Regional director.
4. Registration with ROC
Registration certificate is normally granted within one month after filing section 25 license;
Converting existing company to section 25 company
The Companies Act, 1956 also facilitates the conversion of an existing company to a non-profit company.
Foreign Director
There is no bar under Indian law for a foreigner to be a Director in a section 25 company, (relevant permissions prescribed under the Foreign Exchange Management Act.)
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