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section 25 company

DISADVANTAGES OF A SECTION 25 COMPANY

Posted By admin on December 25, 2013 No Comments

1.Restriction on profits earned

A Section 25 Company has to ensure that its profits and all other incomes are utilized only for the purpose of promoting its objects and not for any other purpose. It should also ensure that its profits are not distributed as dividend among its members.

2.Restriction on alteration of memorandum

Section 25 Company cannot alter its objects clause in its Memorandum without seeking the written approval of central government. If an existing company obtains a license under section 25 it has to ensure that its objects are confined to those mentioned in section 25 itself and if not make proper alteration to its memorandum and articles.

3.Compulsory compliances

If the Central Government has imposed some conditions and regulations upon the company for granting a license under section 25 then such a company is bind by such conditions and has to ensure adequate compliance with them.

4,Taxation

Section 25 Company is regarded as a ‘company’ within the meaning of the Income Tax Act, 1961 and as such its income is taxable according to the applicable rates similar to those applying to other companies.

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Five points regarding directorship of a section 25 company

Posted By admin on December 25, 2013 No Comments
  • Section 25 company if formed as a private limited company, requires atleast two directors and if formed as a public limited company, then requires atleast three directors.
    As per Section 275 of Companies Act,1956,a person can’t become director of more than 15 companies, this limit doesn’tinclude directorship of private limited companies and Section 25 companies.
  • Under section 259 a public company is not allowed to increase the number of it directors beyond the permissible limits under its articles without the approval of Central Government provided such increase results in total number of directors to go beyond twelve. But Section 25 Companies are exempted from this section and are thus free to increase the number of its directors without seeking approval of central government.
  • Filing of Consent for Directorship:A person seeking appointment as director for the first time of Section 25,company needn’t file his consent in advance for working as a director if appointed.
  • For Section 25 companies also, Section 274(1)(g) applies relating to disqualification of directors.

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WHAT ARE THE REQUIREMENT OF FORMING A SECTION 25 COMPANY

Posted By admin on December 25, 2013 No Comments

First Step in order to proceed further for Forming a Section 25 Company includes:-

Obtaining unique Director Identification No. called as Din No . We need Following Documents to proceed further

  1. Permanat Account No of the proposed Director
  2. Address Proof of the Proposed Director
  3. Photographs

Time to form Section 25 company is around 45-60 working days time

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Do you want to form a liasion office?

restriction of liasion office

Taxation procedure of liasion office

Do you want to form a project office?

Do you want to form a branch office?

Do you want to form a Sole Proprietorship?

Do you want to form a limited company?

Do you want to form a holding company?

Do you want to obtain from FNC-1?

Brief Process of Forming Section 25 Company

  1. Obtain Unique DIN No of all the Director
  2. Digital Signature of all the Director
  3. Approach MCA for the Name approval
  4. Prepare the project report etc for grant of Licence
  5. Approach the Government authority for the approval of Section 25 company
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