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Sec 25 Company - Meaning
Companies which are formed for the following purpose are known as Section 25 Companies or Association not for Profit
- For the purposes of promoting commerce, art, science, religion, charity to any other useful object
- With intention to apply its profits or other income for promoting its objects, and • Which prohibits payment of any dividend to its members,
Section 25 Company is a voluntary association of person formed for promotional activities. Besides establishing a Trust and Society, the other alternative to establish a Non – Profit organization is Section 25 Company.
Section 25 Companies are formed as Public or Private Company having a limited liability under the Companies Act 1956. These companies can be formed with or without share capital, in case they are formed without capital, the necessary funds for carrying the business are brought in form of donations , subscriptions from members and general public.
Section 25 Companies can be formed only after obtaining the necessary licence from the Central Government, which imposes certain terms and conditions while granting the approval. In case the company fails to comply with the terms and condition at any point of time, the licence can be cancelled.
Section 25 Companies are not required to add the suffix Limited or Private Limited at the end of their name.
Due to their nature of business, the Government of India has relaxed the application of various provisions of the Companies Act on such companies,
 To check the same.
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