check list on section 25 companies

Procedure for the incorporation of Non-profit Oriented Company

Introduction:

For incorporating a non – profit oriented company, the following three conditions must be satisfied as per Section 25 of the Companies Act, 1956:

i) The Company must be formed for promoting commerce, art, science, religion, charity or other useful object,

ii) The Company should apply its profits, if any, or other income in promoting the objects, and

iii) And should prohibit the payment of any dividend to its members.

The proposed Company, at the outset, have to obtain licence from the Central Government (now delegated to concerned Regional Director of the region) and then the Company may be incorporated with the Registrar of Companies.

The detailed procedure relating to same, is as follows:

Procedure:

1. Make an application in Form No. 1A, to the Registrar of Companies, for availability of the name.

2. Prepare a draft Memorandum and Articles of Association (and the Memorandum should be in the form specified in Annexure I to Company Regulations, 1956).

3. Make an application to the concerned Regional Director.

4. The application shall be accompanied by the following documents:

i) Three copies of the draft Memorandum and Articles of Association

ii) A declaration on non-judicial stamp paper by a Company Secretary in Practice to the effect that he has Memorandum and Articles have been drawn up in conformity with the provisions of the Act and that all requirements of the Act and rules have been duly complied with.

iii) 3 copies of a list of the names, descriptions, addresses and occupations of the promoters as well as members of the proposed Board of Directors.

iv) 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.

v) An estimate of future annual income and expenditure of the Company, specifying the sources and objects of expenditure.

vi) A statement showing brief description of the work already done, and of the work proposed to be done.

vii) A statement specifying grounds of application

viii) A declaration by each person making the application in the form set out in Annexure V.
ix) Demand Draft for Rs. 500/- in favour of ‘Pay and Accounts Officer, Department of Company Affairs’ payable at Chennai (or a Treasury Challan may be obtained from the specified branches of Punjab National Bank).

Note: If any document is not English or Hindi – translation thereof, in English or Hindi, certified by the Promoter or the Director.

5. The Application along with all the enclosures has to be furnished to the Registrar of Companies, in which the Registered office of the proposed Company is to be situated.

6. The applicants shall within a week from the date of making the application publish the notice of the application (in Annexure II of the Companies Regulations), in a newspaper in principal language and in an English newspaper circulating in the district, where the Registered office of the proposed Company is to be situated.

7. A certified copy of the notice shall be sent forthwith to the Regional Director.

8. i) The Registrar of Companies, on receipt of the application, gets them thoroughly scrutinised and list out modification in the Memorandum and Articles, and forward the same to the Regional Director, within 15 days of the receipt of the copies.

ii) The RoC, will also indicate in his report whether there are other with similar objects.

iii) The RoC, also might have some personal knowledge of the promoters and members of the Board, and he normally advices to R.D whether or not to grant a licence.

iv) In certain circumstances, the RoC may refer the case to the District Magistrate.

9. The R.D. after considering the objections received from the public, RoC and after consulting any authority, Department and Ministries – will take a decision whether or not to grant licence.

10. The licence granted shall, however, be revocable by R.D. with the company’s right of being heard.

11. After obtaining the licence, insert the conditions subject to which the licence is granted in Memorandum and Articles.

12. Prepare all other forms along with altered Memorandum & Articles, as suggested by the R.D., and file it with the RoC with necessary registration and filing fees.

Note: Memorandum and Articles need not be stamped.

13. The RoC, on scrutiny, will issue the certificate of incorporation.