COMPANY INDIA

Section 25 companies are those companies which are formed for the sole purpose of promoting commerce, art, science, religion, charity or any other useful object and have been granted a certificate  by the central government recognizing them as such. Main three feature of Section 25 Companies are as under

1) Its objects should be only to promote commerce, art, science, religion, charity or any other useful object.

2) It should intend to apply its profits or other incomes only in promoting its objects; and

3) Central government should have granted a licence to such a company recognizing them as such, these types of companies can be either public company or private company having a limited liability.

Section 13 of Companies Act 1956 stipulates that  All companies having limited liability are required to use the term ‘limited’ or ‘private limited’ in the name of the Companies

Company Act provides exception to section 25 companies  and the companies under Section 25 are allowed to dispense with the use of term ‘limited’ or ‘private limited’ from their names [sub-sec. (6)].

This helps the company to enjoy limited liability without disclosing to the public the nature of liability of its members.

A unregistered Partnership Firm is not recognised as Legal Entity as per Indian  Law.But a special exception is provided in Indian Company Act 1956.

Sub Section 4 of Section 25 Companies provides that A firm can also be the member in Section 25 Company

When this firm dissolves or closes, the firm will cease to be the member in Section 25 Companies

Section 25 Company provides that Director of the Company can be increased beyond the limit specified under section 25 of Companies Act, 1956.

A special notification to this effect issued by Ministry of Company affair that No Central Goverment Approval required for Forming Section 25 Companies

As per section 285 of the Company Act 1956, Every Company requires that  the meeting of Board of Directors should be held at least once in every three months and four meetings should be held in a year.

Bur As per  section 25 of the Company act requires that Companies registered under Section 25 are required to hold meetings of Board of Directors only once in every six months [vide Notification No. SO 1578 dated 1-7-1968].

However Section 25 companies are allowed to hold Board meetings only once in six months but should have held four meetings of Board of Director in a year.