Formation of Section 25 Company

Companies are formed under Section 25 of Companies Act, 1956 for the for the purpose of promotion of commerce, art, science, religion, charity or any other useful object. Such Companies can apply the profits or income for promoting only the objects of the company and not for the paying dividend to its members.

PROCEDURAL STEPS:

1. NAME APPLICATION:

In the prescribed Form-1A, proposed names in order of preference is to be made. A maximum of six names can be given along with the relevance of the name. Further objects, for which the company is to be formed, proposed authorized capital, if limited by shares and details of Promoters and proposed Directors.

The name once approved by Registrar of Companies remains valid for 60 days.

2. APPLICATION FOR LICENCE

An application in the prescribed Form-24A is to be made. Following documents will be attached with the Form:

a)      Memorandum and Articles of Association with Subscriber Sheets;

b)      Declaration as per Annexure V of Companies Regulation Act, 1956;

c)       A statement showing in detail the assets (with estimated values) and liabilities of the association as on the date of application or within 7 days of that date;

d)      An estimate of future annual income and expenditure of the Company, specifying the sources;

e)      Declaration by an Advocate of Supreme Court or High Court, Attorney or Pleader entitled to appear before a High Court, or a Company Secretary or Chartered Accountant in whole time practice that the MoA and AoA have been drawn in conformity with provisions of the Act;

f)       Details of the Promoters and of the Proposed directors of the Company;

g)     A list of the names, addresses, descriptions and occupations of list of the names, addresses, descriptions and occupations of its directors and of its managers or secretary, if any, together with the names of companies, associations and other institutions, in which the directors of the applicant company are directors or hold responsible positions, if any, with the descriptions of the positions so held

h)      If association is already in existence, then last two years' accounts, balance sheet and report on working of the association as submitted to the members of the association

i)        Statement of brief description of the work, if already done by the association and the work proposed to be done

j)        Statement of the grounds on which application is made.

The Registrar of Companies may grant licence with such conditions as may be specified by him in this behalf.

3.  APPLICATION FOR INCORPORATION:

An application for Incorporation of Company is to be filed in Form-1 along with Form-18 and Form-32.

In Form-1, following documents need to be attached:

a)      Memorandum and Articles of Association as approved in Form-24A;

b)      Affidavit as per Circular No. 11/2013 dated 29/05/2013 to the effect that the company/ directors shall not accept deposits from the public under various applicable provisions of the Companies Act, SEBI and RBI etc.

In Form-18, following documents need to be attached:

a)   Proof of Registered Office Address like Electricity Bill, Water Bill, Lease Deed or other ownership proof;

b)      No Objection Certificate from Director, if registered office is owned by director;

c)       A proof that the Company is permitted to use the address as the registered office of the Company if the same is owned by any other entity/ Person (not taken on lease by company).

In Form-32, information with respect to Directors of the Company will be given and Consent Letters of the Directors need to be attached with the Form.

The Registrar of Companies after satisfying itself with the correctness of the documents and particulars stated therein will issue the Certificate of Registration to the Company under Section 25 of the Companies Act, 1956. The Company will come into existence from the date of Registration and may start its activities from that date.