NGO Formation Under Companies Act

Formation of Section 8 Companies under Companies Act 2013

Under Indian law, 3 legal forms exist for Non-Profit organizations:

  1. Trusts
  2. Societies
  3. Section 8 companies

Read more: Formation of Section 8 Companies under Companies Act 2013

Formation of Section 25 Companies under Companies Act 1956

Under Indian law, 3 legal forms exist for Non-Profit organizations:

  1. Trusts
  2. Societies
  3. Section 25 companies

 Due to better laws, Section 25 companies have the most reliable strongest organizational structure. 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 licence by the central government recognizing them as such. Thus, there are three criteria for determining whether a particular company is section 25 company or not:

Read more: Formation of Section 25 Companies under Companies Act 1956

Section 25 in The Companies Act, 1956

25. Power to dispense with" Limited" in name of charitable or other company.
(1) Where it is proved to the satisfaction of the Central Government that an association-
(a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and
(b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Central Government may, by licence, direct that the association may be registered as a company with limited liability, without the addition to its name of the word" Limited" or the words" Private Limited".

 

Read more: Indian Companies Act, 1956, section 25

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