Home       Top Rated       Submit Article     Advanced Search     FAQ       Contact Us     RSS Feeds     

Register your Copyright Online
We offer copyright registration right from your desktop
click here
for details....

 Latest Articles - Articles 2012 - Articles 2011 - Articles 2010 - Articles 2009 - Articles 2008 - Articles 2007 - Articles 2006 - Articles 2000-05

 Search On:Laws in IndiaLawyers Search

Mutual Consent Divorce in Delhi
We provide fast, cost effective & Hassle free solution...
Contact us at Ph no: 9650499965 (Adv. Tapan Choudhury)

   E-mail login                   Password
        

Free Email Sign Up

Main Categories
 Banking and Finance laws
 Case Laws
 Civil Laws
 Company Law
 Constitutional Law
 Consumer laws
 Contracts laws
 Criminal law
 Dubai laws
 Environmental Law
 family law
 Human Rights laws
 Immigration laws
 Insurance / Accident Claim
 Intellectual Property
 International Law
 Juvenile Laws
 Law - lawyers & legal Profession
 Legal outsourcing
 Media laws
 Medico legal
 Miscellaneous
 Real estate laws
 Tax Laws
 Torts Law
 Woman Issues
 Workplace Equality & Non-Discrimination
 Yet Another Category

More Options
 Most read articles
 Most rated articles

Subscription
Subscribe now and receive free articles and updates instantly.

Name
Email



Copyright Registration

To Copyright Your Books, Videos, Songs, Scripts etc
Call us at: 9891244487 / or email at: admin@legalserviceindia.com

 
Top Law Colleges Click here

Law Updates:
# Income-Tax
# Family law
# Company Law
# Constitutional Law
# Partnership firms
# Immigration Law
# Cyber Law
# Lok Adalat, legal Aid & PIL
# Forms:
# Trademarks
# Woman issues
# Medico Legal
# Consumer laws
# Criminal laws
# Supreme Court Judgments


Published : March 25, 2012 | Author : SharmaSaumya
Category : Company Law | Total Views : 3841 | Unrated

  
SharmaSaumya
Saumya Sharma [B.A., LL.B.(Hons.) from National Law Institute University]
 

Section 25 Companies

Under the Companies Act (“Act”), 1956, Section 25 company can be defined as a limited company formed for the sole object of “promoting commerce, art, science, religion, charity, or any other useful object, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members.” So, Section 25 companies are meant, formed and intended for achieving charitable purposes and per se incorporated not with a profit motive and for profit making, but to further certain philanthropic purposes; and on satisfaction {of the Central Government (powers now delegated to Registrar of Companies)} of the stipulation mentioned under sub-section 1 of Section 25, such company may be registered as a company with limited liability upon direction of Central Government. So, Section 25 companies are also termed as ‘non- profit companies.’ The section “provides for the incorporation of associations which are not formed for the purpose of making any profit in the sense in which it is commercially understood.” It may be a public company or a private company, or a company limited by guarantee or share capital or both. Also, vide sub- section 6 of Section 3, Section 25 companies are exempted from maintaining minimum paid –up capital required to be maintained by other companies.

B. License:
Further, on such directions of the Central Government, essentially issuance of license by such authority, such an association is dispensed from adding either “Limited” or “Private Limited” in its name, though such an association upon registration enjoys all privileges of a private company. “The registration process for a Section 25 company is lengthy, complex and time consuming because it involves two procedures, namely granting of license and registration of the company.”

Further, such a company or association shall be bound by the conditions and regulations subject to which the license has been granted; and the non profit company shall be required to enter the same in its memorandum of association or articles of association, or partly in one and partly in another, as directed by the Central Government.

A body or company to which such license is granted, would require prior approval from the Central Government in case such company intends to make alterations in its objects as mentioned in the memorandum of association; and the Central Government is empowered to revoke the license so granted upon any alterations in the Objects clause without prior approval from the Central Government. Further, when prior approval is sought from the Central Government, it may be granted subject to certain conditions, which would be mandatory on the Company pursuant to Section 25 (8) (c) read with Section 25 (5).

C. Firm as a member:
Pursuant to Sub-section 4 of the Section 25, a partnership firm is enabled to become member of a non- profit company but membership of such a firm lapses upon dissolution of such firm. But trade unions cannot get license under Section 25 of the Act.

D. Revocation of License
The Central Government is empowered under the Act to revoke the license at any time. But the provision incorporates the requirement of principles of natural justice, because the Central Government as the Central Government is required to give a notice in writing of such intention of revoking the license so granted and an opportunity of being heard in opposition before such revocation. The consequences of such a revocation remains that such a body (non-profit company) would not enjoy the exemption under this Section and upon revocation, the Registrar would be required to enter “Limited” or ” Private Limited” to the name of such company upon the register of such body. Further, vide sub-section 9 of Section 25, such body has to remove the words “Chamber of Commerce” if contained in its name within three months from date of revocation or “such longer period as the Central Government may think fit to allow.” Further, in case of default as to herein mentioned conditions, body shall be “punishable with fine which may extend to five thousand rupees for every day during which the default continues.”

E. Conclusion
Section 25 companies are ‘non- profit’ companies are granted license and registered as any other company and may be a public or private company. Though the purposes for which such a company is formed is clearly laid down in Sub section 1 of Section 25 and are majorly charitable purposes. Further, Section 25 companies also enjoy certain exemptions and privileges under the Act and possess limited liability.
******************
# M. Gomathinarayagam Pillai v Sri Manthramurthi High School, AIR 1963 Mad 387: (1963) 1 MLJ 56, http://indiankanoon.org/doc/1757001/
# “A Review of Charities Administration in India”, http://planningcommission.nic.in/reports/sereport/ser/stdy_cai.pdf (last visited on March 23, 2012)
# D S R KRISHNAMURTI, COMPANY LAW (Taxmann Allied Services (P.) Ltd.) (109).

Authors contact info - articles The  author can be reached at: SharmaSaumya@legalserviceindia.com




1 2 3 4 5
Rate this article!     Poor
Excellent    

Cambridge University Faculty of Law:
Law has been studied and taught in Cambridge since the thirteenth century, when the core subjects of legal study in all European universities were Civil law (the law of ancient Rome) and the Canon law of the Church. Early graduates of the Cambridge Faculty of Canon Law held the highest judicial positions in Europe
Law colleges Click here to see a list of Top law colleges in the world


Most viewed articles in Company Law category
Globalization & its impact on Indian Economy: Developments and Challenges
ADR Mechanism in India
Remuneration of Directors
Merging a company
Demerger under Company Law
Articles of Association & Alteration of Articles
Directors & Their Liabilities
Retrenchment under Industrial Dispute Act, 1947
Corporate Personality
Winding Up of a Company
Dissolution of partnership firm
Which employees do not fall under the ambit of Industrial Dispute Act, 1947
Prevention of oppression & mismanagement
Clause 49 of the Listing Agreement
Corporate Social Responsibility
The Employees Deposit-linked Insurance Fund Scheme
Most recent articles in Company Law category
Corporate Social Responsibility
Duel Listing of Companies
VTB Capital PLC V. Nutritek International Corp & Ors
How Mediation Can Benefit The Business Community
Can mere fine compensate the wrongs done under the name of Corporations
Mergers and Acquisitions
IT Sectors Corporate Social Responsibility towards Public Infrastructre in India
Manufacturers Liability, Case Developments in UK, USA and India
Minority Rights on Oppression and Mismanagement Under Companies Act, 1956 And Companies Bill, 2011
IPO Scam: With Special Referance To NSDL V. SEBI Case
Squeeze out of minority shareholders
Appointment, Disqualification And Liabilities Of Directors of A Company: A Legal Perspective
changes in the national and international corporate environment
FDI in Retail Sector
Companies Act 1956 and Company Bill 2011
Implementation of Corporate E-Governance: Implementation of MCA 21 Model

Article Comments

Posted by Dilip Patel on April 28, 2012
Dear sir

I want to register one company for doing business of renewable energy products ( Sales and service ) in surat (GJ- India). Please give me the details for doing the same and also mention time period and cost to register company

Dilip Patel
08087058818
Pune (MH)

Post Your Comments
Name

Email

Your comments

Note : Your email address is only visible to admin, other members / users cannot see it.

You can use following FXCodes


BOLD : [b]
Italic : [i]

[b] Legal Services India [/b] is a [i]nice website[/i].
[url= http://www.legalservicesindia.com/article/ ]click here to visit.[/url]

Legal Services India is a nice website.
Click here to visit

 

Note : Currently, user comments are moderated and will be posted only after approval.



Welcome!
Please login or register a new free account.

Random Pick
its about laws which are related to rent control & rent control act.

Statistics
» Total Articles
898
» Total Authors
2312
» Total Views
4885608
» Total categories
29

Law Books




Legal Articles

Lawyers in India - Click on a link below for legal Services

lawyers in Mumbai
lawyers in Bangalore
lawyers in Pune
lawyers in Pondicherry
lawyers in Jaipur

lawyers in Chennai
lawyers in Ahmedabad
lawyers in Jodhpur
lawyers in Cochin
lawyers in Lucknow

For Mutual consent Divorce in Delhi
Click Here

Ph no: 9650499965
For online Copyright Registration
click here

Ph no: 9891244487
Law Articles

lawyers in Delhi - New Delhi
lawyers in Chandigarh
lawyers in Surat
lawyers in Nashik

lawyers in Janjgir
lawyers in Indore
lawyers in Allahabad
lawyers in Agra

lawyers in Kolkata
lawyers in Hyderabad
lawyers in Rajkot
lawyers in Nagpur

TOP

legal Services India.com is Copyrighted under the Registrar of Copyright Act ( Govt of India) 2000-2013

India's Most Trusted legal information center