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The Tax Publishers Procedure for Incorporation of Company as 'Section 25 Company'A. INTRODUCTORY NOTE 1. Section 25 company is a company for charitable or other public utility purposes. 2. It may be a public or a private limited company with limited liability for promoting commerce, art, science, religion, charity or any other useful objects; and 3. It intends to apply its profits, if any, or other income in promoting its objects; and 4. It prohibits the payment of any dividend to its members. 5. As per the newly inserted section 3(6), a company registered under section 25 before or after the commencement of Companies (Amendment) Act, 2000 shall not be required to have minimum paid-up capital specified in this section. 6. The Central Government may, by licence, direct that an association may be registered as a company with limited liability, without the addition to its name the word 'Limited' or the words 'Private Limited' in case the following things are proved to its satisfaction -- (i) The association is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object; and [Section 25(1)(a)] (ii) The association 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. [Section 25(1)(b)] Thus, an association about to be formed as a limited liability company may straightway be registered as a 'section 25 company'. 7. Unless the articles of such a company otherwise provide, such body shall, if the Central Government, by general or special order so directs and to the extent specified in the directions, be exempt from such of the provisions of the Companies Act, 1956 as may be specified therein. 8. Before incorporation of the company under section 25, a licence must be obtained from the Regional Director. B. DIN, DIGITAL SIGNATURE AND IDENTITY ADDRESS PROOF 1. Ensure that all the proposed directors have obtained a Director Identification Number (DIN) and at least one of them hold a valid Digital Signature Certificate to submit e-forms. 2. Where a professional is engaged to file application for incorporation of company and the statutory declaration in e-Form 1, under section 33(2), he should have a valid Digital Signature Certificate (DSC). 3. Further, the professional engaged to certify e-Form 18 and 32 should also have valid DSC. C. APPLY FOR AVAILABILITY OF NAME OF COMPANY 1. Select names (minimum one and maximum six) in descending order of preference. 2. Consider following guidelines for name availability : (i) Image of the logo associated with a Trade Mark (if any) and the No Objection Certificate from the Statutory Authorities (wherever applicable) should be attached to e-Form 1A. (ii) Consider provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950.--Vide Letter No. 10(1)-RS/65, dt. 27-11-1965, issued by Department of Company Affairs, before selecting a name. (iii) Consider section 20 regarding prevention on use of undesirable names and Circular No. 10(1)-/RS/60, dated 1-4-1960 containing instances of undesirable names. (iv) Follow guiding instructions for deciding availability of names for registration under the Companies Act, 1956 as contained in Circular No. 10(19)/RS/61, dated 5-5-1962 and Circular No. 2/90 (No. 1/1/90-CL-V-27/1/89-CL-III, dt. 5-1-1990. (v) Follow guidelines regarding use of key words as enshrined in Letter F. No. 27/1/87, dated 13-3-1989. (vi) Ensure that the proposed name is not identical with or too nearly resembles the name by which a company in existence has been previously registered or a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999. (vii) Take care that selected names should have a smack of company's main objects. (viii) Register of names of companies registered in India is maintained at the offices of the Registrar of Companies. (ix) It may be noted that generic names, without proper noun like the word 'Y2K' (i.e., year 2000) are not allowed as a name for any company as a 'stand alone' name vide Circular No. 5/35/98-CL-V, of Ministry of Law, Justice Company Affairs General Circular No. 6/99, dt. 13-5-1999. (x) The Department's Circular No. 3/96, dated 12-4-1996 requires avoiding of names with the words 'stock exchange' as a part of the name without obtaining 'no objection' from SEBI. (xi) Name starting with small alphabets can be used provided the same does not have phonetic or visual resemblance to the name of existing company.--Vide Circular No. 6/99, dated 13-5-1999. (xii) Unless the proposed company is going to be incorporated as a mutual fund company, it shall avoid the words 'mutual funds' as part of the name.--Vide PIB Press Release, New Delhi, dated 14-2-2000. 3. Make an application duly signed digitally, by the authorised signatory and send it through MCA portal to the Registrar of Companies of the State or Union Territory where registered office of the company will be situated in e-Form 1A [vide rule 4A of the Companies (Central Government's) General Rules and Forms, 1956] along with a fee of Rs. 500 to ascertain availability of name. 4. On submission of e-Form 1A, the system generates Service Request Number (SRN/Challan No.) which shall be used in making payment of fee of Rs. 500 to the RoC and for tracking the status of application. 5. The Registrar, shall then confirm the availability of one of the name. 6. When the RoC approves the name, the same shall be available for incorporation of proposed company within a period of 60 days. The availability of the name approved can be extended for further period of 30 days, by the Registrar, on request. If company is not incorporated within 60 days or 90 days, as the case may be from the date of approval of name by RoC, the approval shall stand lapsed. 7. Where name is not available, select fresh name and apply again to RoC with requisite application fees. D. PREPARATION OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION 1. Make carefully the drafts of the Memorandum of Association and Articles of Association. 2. The Memorandum of association of the company shall be in accordance with the form specified in the Companies Regulations, 1956 or in a form as near thereto as circumstances admit. 3. In case of existing public limited company the minimum paid-up share capital of Rs. 5 lakhs or such higher amount as may be prescribed for such company is not required. [Section 3(6)] 4. In case of private limited company under section 25, the minimum paid-up share capital of Rs. 1 lakh or such higher amount as may be prescribed for such company is not required. [Section 3(6)] 5. It should be ensured that all the proposed directors have obtained Director Identification Number (DIN) and at least one of them Valid Digital Signature (VDS) required to e-Forms. Where a professional is engaged to file application is engaged to file application for licence and/or incorporation of company, the professional should have valid Digital Signature Certificate (DSC). Further, the professional certifying e-Form 18 and 32 should also have a valid DSC. The documents evidencing address and identity of proposed directors should be collected. 6. Let Memorandum and Articles of Association be scrutinised by an advocate of the Supreme Court or High Court or an attorney, or pleader entitled to appear before a High Court or a Chartered Accountant practising in India or a Company Secretary in whole time practice. The declaration by the concerned advocate/attorney on pleader should also be attached with the form. 7. It is advisable, in order to avoid more and more time consumption and corrections, to take proper guidance from RoC before finally printing the Memorandum and Articles of Association. Hence get the same vetted by the RoC. [Regulation 6 of Companies Regulation, 1956] 8. One of the promoters should be retained as the subscriber to the Memorandum and Articles of Association. [Circular No. 1/95 vide File No. 14/6/1994 CL-V, dt. 16-2-1995] 9. Other relevant matters in respect of MoA and AoA-- (i) Subscription to MoA and AoA The Memorandum of Association should be signed by not less than 2 person (if section 25 company is private company) and 7 (if the company is public company). Each subscriber to take at least one share and shall write number of shares, he takes against his name. There is no need to have minimum paid-up capital. (ii) Change of Subscribers Tally the name of subscriber with the list of promoters/first directors mentioned in e-Form 1. If any change is intended, a fresh e-Form 1 is to be filed and permission of the RoC is required, which is accorded by him on submission of proposal of change in name(s) of subscriber(s) to the MoA. This facility is available only after six months (previously 3 months) from the date on which the change in name was allowed to the original promoters (refer to Circular No. 1 of 1990, dt. 5-1-1990 issued by Ministry of Company Affairs). (iii) Signing of MoA and AoA Each subscriber has to digitally sign the Memorandum of Association and Articles of Association by putting his name, address, description and occupation (if any) in the presence of at least one witness who shall likewise add his address, description and occupation, if any. The date of MoA should be subsequent to date of stamping. (iv) Power of Attorney An agent on behalf of the subscriber to the MoA and AoA can sign both the documents provide the agent has been duly authorised by the subscriber to sign on his behalf on the documents or any amendment thereon.--Vide Circular No. 128/HCC/64, dt. 27-7-1964. (v) When the subscriber is illiterate An illiterate subscriber should affix his thumb impression or mark to be described as such by the person who has written for him.--Vide Letter No. 8/15/58/PR, dt. 13-9-1958. (vi) Corporate Subscriber In case the subscriber is a company, the Memorandum and Articles should be signed by an agent duly authorised by the company. (vii) Declaration as per Annexure V to the Companies Regulation, 1956 A declaration as per Annexure V attached to the Companies Regulation, 1956 has to be prepared on a stamped paper of the appropriate value applicable to the State in which the Registered Office of the company is situated. All the promoters, without any exception have to sign the declaration. E. PROCEDURE FOR SUBMISSION OF APPLICATION TO REGIONAL DIRECTOR IN e-FORM 24 1. The company proposed to be incorporated as a section 25 company shall apply in writing to Regional director for issue of license under section 25 for incorporating a company without the addition of the word 'limited' or words 'private limited' in its name. 2. The company proposed to be incorporated as a section 25 company shall apply in writing to Regional director at Bombay/Kanpur/Kolkata/Chennai. [Regulation 3] F. WHO CAN FILE The e-Form 24 can be filed by a person named in the Articles of Association as managing director, director or manager or secretary of the company or a person duly authorised by the promoters. G. DOCUMENTS TO BE FILED ALONGWITH e-FORM 24 The following documents shall be sent alongwith the application to the Regional director : (i) Three copies or type written copies of the draft memorandum and Articles of Association of the proposed company. [Regulation 4(i)] (ii) A declaration by an advocate of the Supreme Court or of a High Court; an attorney or a pleader entitled to appear before a High Court or a Chartered Accountant or a Company Secretary practising in India; that the memorandum and Articles of Association have been drawn up in conformity with the provisions or when the company has functioned only for one financial year, complied with in respect of registration and matters incidental or supplemental thereto; [Regulation 4(ii)] (iii) Three copies of the list of the names, descriptions, addresses and occupations of -- (a) the promoters in the case of proposed company; (b) where a firm is the promoter, each partner of the firm; (c) all members of the proposed Board of directors; and (d) manager or secretary, if any. [Regulation 4(iii)] (iv) List in triplicate of names of companies, associations and other institutions in which such promoters and members of the proposed board of directors are directors or hold responsible positions, if any, with descriptions of the positions held. [Regulation 4 (iii)] (v) If the association is one which is already in existence, three copies of the following documents are to be submitted by the management to its members for each of the two complete financial years immediately preceding the date of application or where the association has functioned only for one such financial year, for such year-- (a) the accounts; (b) the balance sheets; and (c) the reports on the working of the association. [Regulation 4(iv)] (vi) A statement showing in detail the assets (with the estimated values thereof) and the liabilities of the association as on the date of the application or within 7 days of that date. [Regulation 4(v)] (vii) An estimate of the future annual income and expenditure of the proposed company, specifying the source of the income and objects of the expenditure. [Regulation 4(vi)] (viii) A statement specifying briefly the grounds on which the application is made. [Regulation 4(viii)] (ix) A statement giving briefly description of work done or proposed to be done. [Regulation 4(vii)] (x) A declaration by each of the persons making application in the form set out in Annexure V to the Companies Regulations, 1956 or in a form as near thereto as circumstances admit. [Regulation 4(ix)] H. MODE OF PAYMENT OF REGISTRATION AND FILING FEE 1. Registration and filing fee should be paid through one of the specified modes, viz., remittance in authorised banks, credit card or through internet banking. In case of online payment, filing process shall be complete immediately. 2. In case of remittance through authorised bank, a pre-filled challan containing the SRN, date of challan, expiry date, name and designation of user by whom challan is tendered, name and address of the company, particular of remittance, total amount and head of account shall be generated by the system. The challan should be used for making payment before the date of expiry mentioned an the challan and transaction shall be completed by the concerned banks before that date. 3. If the payment is not made by pay by date mentioned in the challan, submission of form shall be regarded as incomplete and e-mail will be sent to the applicant that the form cannot be regarded as filed due to non-payment. The status of payment can be verified through MCA portal. 4. A letter of authority given by the applicant(s) favouring any other person for making necessary corrections as may be required by the Regional director. 5. The fee payable for application to the Regional director is Rs. 500; and the same should be sent through MCA portal through prescribed mode, viz., by online or offline. I. EFFECT OF NON-PAYMENT BEFORE DUE DATE Note, if payment is not made by the date mentioned on the challan, the submission of form shall be treated as incomplete and message through e-mail will be received that form cannot be regarded as filed due to non-payment. Status of application and payment can be verified through MCA portal. J. PHYSICAL SUBMISSION OF STAMPED DOCUMENTS Subsequent to the filing of e-Forms, send immediately the original documents to the Registrar of Companies-- (i) Original and duly stamped and signed declaration; (ii) Original and duly stamped and Signed Memorandum and Articles of Association. Unless the above documents are submitted to the Regional Director in physical form to the Registrar of Companies quoting Service Request Number, filing shall be treated as incomplete and legal action shall be taken. K. COPY OF APPLICATION TO BE FILED WITH RoC The company shall file a copy of the application alongwith all the above cited enclosures with the appropriate RoC. [Regulation 10G] L. SCRUTINY OF DOCUMENTS BY RoC 1. The concerned RoC will scrutinise all the documents so filed. 2. The RoC will scrutinise the memorandum and articles submitted with the copy of application, so as to ensure that the various provisions of the Companies Act, 1956 are complied with. M. REPORT TO REGIONAL DIRECTOR BY RoC 1. The RoC will submit his report to the Regional director. He will forward the memorandum and articles to the Regional director with his report within 15 days of the receipt of the copy after listing the modification required in the same documents. 2. The RoC may advise to the Regional director whether or not the licence be granted to the proposed company, considering the personal information with respect to the promoters and the proposed members of the said proposed company. 3. The report submitted by the RoC may also provide about the necessity of location of new proposed company. 4. The report may also ask for the views of the District Magistrate of the concerned State within whose jurisdiction the registered office of the proposed company is to be situated. 5. In the aforesaid situation, a copy of the letter in reply by District Magistrate to the RoC will also be sent to the Regional director. 6. The Regional director makes a reference to the State Government in some serious matters. 7. The Regional directors, on receipt of the report will scrutinise the Memorandum and Articles carefully. 8. The Regional director may ask to the applicant to make necessary modifications in the memorandum and articles in accordance of scrutiny made to the RoC and the Departmental Officer. 9. The Regional director will also determine the objections, if any, received from the public in respect of licence to be granted. 10. The Regional director will also consult the concerned Ministries of the Central Government, if required. 11. The Regional Director will decide whether or not the licence be granted, considering the views of the State Government, the Central Government and the Ministries, if necessary, and also the objection of public in this behalf. N. PUBLICATION OF NOTICE 1. A notice of the application made to the Regional director shall be published within a week from the date of making the application in the form set out in the Companies Regulations, 1956 or in a form as near thereto as circumstances admit. It shall be published at least once in a newspaper in principal language of the district in which the registered office of the proposed company is to be situated and circulating in that district and at least once in an English newspaper circulating in that district. [Regulations 11(a) and 11(b)] 2. A certified copy of the aforesaid notice as published shall be sent forthwith to the Regional director. [Regulations 11(a) and 11(b)] O. MANNER OF PUBLICATION The notice should be published in a newspaper in a principal language of the district in which the registered office of the company is situated and at least once in an English newspaper circulating in that district. P. COPY OF NOTICE TO THE REGION DIRECTOR After the notice is published, a certified copy of the notice should be forwarded to the Regional Director. Q. ACTION BY REGIONAL DIRECTOR It might be that subsequent to publishing of notice by the company, some objections are received within time as stipulated in the public notice, the Regional Director may, in consultation with authority, Department or Ministry at his discretion, decide and determine whether a licence should be issued or not. R. ISSUE OF LICENCE The Regional Director, after being satisfied that all objections have been removed and there remains no objection against the registration of the company under section 25, shall issue a licence as set out in Annexure IV of the Companies Regulations, 1956 or in a form as near thereto as circumstances allow. S. CERTIFICATE OF INCORPORATION AND CORPORATE IDENTIFICATION NUMBER On receiving the licence from the Regional Director, the company shall apply to the RoC to issue certificate of incorporation. On receipt of fresh certificate of incorporation, the company shall dispense with the words 'Limited' or 'Private Limited' as part of its name. However, company must pass a special resolution for change of name dropping the words 'Limited' or 'Private Limited' before it approaches RoC requesting for grant of certificate of incorporation. T. SAFE CUSTODY Original Certificate of Incorporation after receipt from the Registrar of Companies should be kept under safe custody. U. PUBLICATION OF NAME On incorporation of the company, publish the name of the company in the following manner : (i) paint or affix its name and the address of its registered office and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible; and if the characters employed therefor are not those of the language, or one of the languages, in general use in that locality, also in the characters of that language or of one of those languages; (ii) have its name engraven in legible characters on its seal; (iii) have its name and the address of its registered office mentioned in legible characters in all its business letters, billheads and letter papers and in all its notices and other official publications; and also have its name so mentioned in all bill of exchange, hundies, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and in all bill of parcels, invoices, receipts and letters of credit of the company. (iv) the company shall comply with the provisions of section 147 of the Act regarding publication of its name after incorporation. V. PROHIBITION TO ALTER OBJECT CLAUSE After obtaining licence under section 25 the company cannot change its object clause, in the Memorandum of Association except with the approval of the Regional Director. W. POWER TO REVOKE LICENCE The Regional Director shall revoke the licence granted by it to a company under section 25, if the company happens to : (i) alter any of the clauses pertaining to the object of the company suo moto without the approval of Regional Director. (ii) Contravenes any of the provisions of the Companies Act and rules framed under the Act. X. EFFECT ON REVOCATION OF LICENCE On such revocation, the company shall be compelled to enter the words 'Limited' or the words 'Private Limited' as the case may be, at the end of its name and it would cease to enjoy the exemptions which the Act has conferred on its incorporation as company registered under section 25. Where the company was registered as a body whose name contained the words 'Chamber of Commerce', that body on revocation of licence by the Regional Director within a period of three months from the date of revocation of licence, shall change its name, which does not contain the words. However, the period of three months may, on request of the company be extended by the Regional Director. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers Procedure for Incorporation of Company as 'Section 25 Company'A. INTRODUCTORY NOTE

1. Section 25 company is a company for charitable or other public utility purposes.

2. It may be a public or a private limited company with limited liability for promoting commerce, art, science, religion, charity or any other useful objects; and

3. It intends to apply its profits, if any, or other income in promoting its objects; and

4. It prohibits the payment of any dividend to its members.

5. As per the newly inserted section 3(6), a company registered under section 25 before or after the commencement of Companies (Amendment) Act, 2000 shall not be required to have minimum paid-up capital specified in this section.

6. The Central Government may, by licence, direct that an association may be registered as a company with limited liability, without the addition to its name the word 'Limited' or the words 'Private Limited' in case the following things are proved to its satisfaction --

(i) The association is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object; and [Section 25(1)(a)]

(ii) The association 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. [Section 25(1)(b)]

Thus, an association about to be formed as a limited liability company may straightway be registered as a 'section 25 company'.

7. Unless the articles of such a company otherwise provide, such body shall, if the Central Government, by general or special order so directs and to the extent specified in the directions, be exempt from such of the provisions of the Companies Act, 1956 as may be specified therein.

8. Before incorporation of the company under section 25, a licence must be obtained from the Regional Director.

B. DIN, DIGITAL SIGNATURE AND IDENTITY ADDRESS PROOF

1. Ensure that all the proposed directors have obtained a Director Identification Number (DIN) and at least one of them hold a valid Digital Signature Certificate to submit e-forms.

2. Where a professional is engaged to file application for incorporation of company and the statutory declaration in e-Form 1, under section 33(2), he should have a valid Digital Signature Certificate (DSC).

3. Further, the professional engaged to certify e-Form 18 and 32 should also have valid DSC.

C. APPLY FOR AVAILABILITY OF NAME OF COMPANY

1. Select names (minimum one and maximum six) in descending order of preference.

2. Consider following guidelines for name availability :

(i) Image of the logo associated with a Trade Mark (if any) and the No Objection Certificate from the Statutory Authorities (wherever applicable) should be attached to e-Form 1A.

(ii) Consider provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950.--Vide Letter No. 10(1)-RS/65, dt. 27-11-1965, issued by Department of Company Affairs, before selecting a name.

(iii) Consider section 20 regarding prevention on use of undesirable names and Circular No. 10(1)-/RS/60, dated 1-4-1960 containing instances of undesirable names.

(iv) Follow guiding instructions for deciding availability of names for registration under the Companies Act, 1956 as contained in Circular No. 10(19)/RS/61, dated 5-5-1962 and Circular No. 2/90 (No. 1/1/90-CL-V-27/1/89-CL-III, dt. 5-1-1990.

(v) Follow guidelines regarding use of key words as enshrined in Letter F. No. 27/1/87, dated 13-3-1989.

(vi) Ensure that the proposed name is not identical with or too nearly resembles the name by which a company in existence has been previously registered or a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999.

(vii) Take care that selected names should have a smack of company's main objects.

(viii) Register of names of companies registered in India is maintained at the offices of the Registrar of Companies.

(ix) It may be noted that generic names, without proper noun like the word 'Y2K' (i.e., year 2000) are not allowed as a name for any company as a 'stand alone' name vide Circular No. 5/35/98-CL-V, of Ministry of Law, Justice Company Affairs General Circular No. 6/99, dt. 13-5-1999.

(x) The Department's Circular No. 3/96, dated 12-4-1996 requires avoiding of names with the words 'stock exchange' as a part of the name without obtaining 'no objection' from SEBI.

(xi) Name starting with small alphabets can be used provided the same does not have phonetic or visual resemblance to the name of existing company.--Vide Circular No. 6/99, dated 13-5-1999.

(xii) Unless the proposed company is going to be incorporated as a mutual fund company, it shall avoid the words 'mutual funds' as part of the name.--Vide PIB Press Release, New Delhi, dated 14-2-2000.

3. Make an application duly signed digitally, by the authorised signatory and send it through MCA portal to the Registrar of Companies of the State or Union Territory where registered office of the company will be situated in e-Form 1A [vide rule 4A of the Companies (Central Government's) General Rules and Forms, 1956] along with a fee of Rs. 500 to ascertain availability of name.

4. On submission of e-Form 1A, the system generates Service Request Number (SRN/Challan No.) which shall be used in making payment of fee of Rs. 500 to the RoC and for tracking the status of application.

5. The Registrar, shall then confirm the availability of one of the name.

6. When the RoC approves the name, the same shall be available for incorporation of proposed company within a period of 60 days. The availability of the name approved can be extended for further period of 30 days, by the Registrar, on request. If company is not incorporated within 60 days or 90 days, as the case may be from the date of approval of name by RoC, the approval shall stand lapsed.

7. Where name is not available, select fresh name and apply again to RoC with requisite application fees.

D. PREPARATION OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION

1. Make carefully the drafts of the Memorandum of Association and Articles of Association.

2. The Memorandum of association of the company shall be in accordance with the form specified in the Companies Regulations, 1956 or in a form as near thereto as circumstances admit.

3. In case of existing public limited company the minimum paid-up share capital of Rs. 5 lakhs or such higher amount as may be prescribed for such company is not required. [Section 3(6)]

4. In case of private limited company under section 25, the minimum paid-up share capital of Rs. 1 lakh or such higher amount as may be prescribed for such company is not required. [Section 3(6)]

5. It should be ensured that all the proposed directors have obtained Director Identification Number (DIN) and at least one of them Valid Digital Signature (VDS) required to e-Forms. Where a professional is engaged to file application is engaged to file application for licence and/or incorporation of company, the professional should have valid Digital Signature Certificate (DSC). Further, the professional certifying e-Form 18 and 32 should also have a valid DSC. The documents evidencing address and identity of proposed directors should be collected.

6. Let Memorandum and Articles of Association be scrutinised by an advocate of the Supreme Court or High Court or an attorney, or pleader entitled to appear before a High Court or a Chartered Accountant practising in India or a Company Secretary in whole time practice. The declaration by the concerned advocate/attorney on pleader should also be attached with the form.

7. It is advisable, in order to avoid more and more time consumption and corrections, to take proper guidance from RoC before finally printing the Memorandum and Articles of Association. Hence get the same vetted by the RoC. [Regulation 6 of Companies Regulation, 1956]

8. One of the promoters should be retained as the subscriber to the Memorandum and Articles of Association. [Circular No. 1/95 vide File No. 14/6/1994 CL-V, dt. 16-2-1995]

9. Other relevant matters in respect of MoA and AoA--

(i) Subscription to MoA and AoA

The Memorandum of Association should be signed by not less than 2 person (if section 25 company is private company) and 7 (if the company is public company). Each subscriber to take at least one share and shall write number of shares, he takes against his name. There is no need to have minimum paid-up capital.

(ii) Change of Subscribers

Tally the name of subscriber with the list of promoters/first directors mentioned in e-Form 1. If any change is intended, a fresh e-Form 1 is to be filed and permission of the RoC is required, which is accorded by him on submission of proposal of change in name(s) of subscriber(s) to the MoA. This facility is available only after six months (previously 3 months) from the date on which the change in name was allowed to the original promoters (refer to Circular No. 1 of 1990, dt. 5-1-1990 issued by Ministry of Company Affairs).

(iii) Signing of MoA and AoA

Each subscriber has to digitally sign the Memorandum of Association and Articles of Association by putting his name, address, description and occupation (if any) in the presence of at least one witness who shall likewise add his address, description and occupation, if any. The date of MoA should be subsequent to date of stamping.

(iv) Power of Attorney

An agent on behalf of the subscriber to the MoA and AoA can sign both the documents provide the agent has been duly authorised by the subscriber to sign on his behalf on the documents or any amendment thereon.--Vide Circular No. 128/HCC/64, dt. 27-7-1964.

(v) When the subscriber is illiterate

An illiterate subscriber should affix his thumb impression or mark to be described as such by the person who has written for him.--Vide Letter No. 8/15/58/PR, dt. 13-9-1958.

(vi) Corporate Subscriber

In case the subscriber is a company, the Memorandum and Articles should be signed by an agent duly authorised by the company.

(vii) Declaration as per Annexure V to the Companies Regulation, 1956

A declaration as per Annexure V attached to the Companies Regulation, 1956 has to be prepared on a stamped paper of the appropriate value applicable to the State in which the Registered Office of the company is situated. All the promoters, without any exception have to sign the declaration.

E. PROCEDURE FOR SUBMISSION OF APPLICATION TO
REGIONAL DIRECTOR IN e-FORM 24

1. The company proposed to be incorporated as a section 25 company shall apply in writing to Regional director for issue of license under section 25 for incorporating a company without the addition of the word 'limited' or words 'private limited' in its name.

2. The company proposed to be incorporated as a section 25 company shall apply in writing to Regional director at Bombay/Kanpur/Kolkata/Chennai. [Regulation 3]

F. WHO CAN FILE

The e-Form 24 can be filed by a person named in the Articles of Association as managing director, director or manager or secretary of the company or a person duly authorised by the promoters.

G. DOCUMENTS TO BE FILED ALONGWITH e-FORM 24

The following documents shall be sent alongwith the application to the Regional director :

(i) Three copies or type written copies of the draft memorandum and Articles of Association of the proposed company. [Regulation 4(i)]

(ii) A declaration by an advocate of the Supreme Court or of a High Court; an attorney or a pleader entitled to appear before a High Court or a Chartered Accountant or a Company Secretary practising in India; that the memorandum and Articles of Association have been drawn up in conformity with the provisions or when the company has functioned only for one financial year, complied with in respect of registration and matters incidental or supplemental thereto; [Regulation 4(ii)]

(iii) Three copies of the list of the names, descriptions, addresses and occupations of --

(a) the promoters in the case of proposed company;

(b) where a firm is the promoter, each partner of the firm;

(d) manager or secretary, if any. [Regulation 4(iii)]

(iv) List in triplicate of names of companies, associations and other institutions in which such promoters and members of the proposed board of directors are directors or hold responsible positions, if any, with descriptions of the positions held. [Regulation 4 (iii)]

(v) If the association is one which is already in existence, three copies of the following documents are to be submitted by the management to its members for each of the two complete financial years immediately preceding the date of application or where the association has functioned only for one such financial year, for such year--

(a) the accounts;

(b) the balance sheets; and

(vi) A statement showing in detail the assets (with the estimated values thereof) and the liabilities of the association as on the date of the application or within 7 days of that date. [Regulation 4(v)]

(vii) An estimate of the future annual income and expenditure of the proposed company, specifying the source of the income and objects of the expenditure. [Regulation 4(vi)]

(viii) A statement specifying briefly the grounds on which the application is made. [Regulation 4(viii)]

(ix) A statement giving briefly description of work done or proposed to be done. [Regulation 4(vii)]

(x) A declaration by each of the persons making application in the form set out in Annexure V to the Companies Regulations, 1956 or in a form as near thereto as circumstances admit. [Regulation 4(ix)]

H. MODE OF PAYMENT OF REGISTRATION AND FILING FEE

1. Registration and filing fee should be paid through one of the specified modes, viz., remittance in authorised banks, credit card or through internet banking. In case of online payment, filing process shall be complete immediately.

2. In case of remittance through authorised bank, a pre-filled challan containing the SRN, date of challan, expiry date, name and designation of user by whom challan is tendered, name and address of the company, particular of remittance, total amount and head of account shall be generated by the system. The challan should be used for making payment before the date of expiry mentioned an the challan and transaction shall be completed by the concerned banks before that date.

3. If the payment is not made by pay by date mentioned in the challan, submission of form shall be regarded as incomplete and e-mail will be sent to the applicant that the form cannot be regarded as filed due to non-payment. The status of payment can be verified through MCA portal.

4. A letter of authority given by the applicant(s) favouring any other person for making necessary corrections as may be required by the Regional director.

5. The fee payable for application to the Regional director is Rs. 500; and the same should be sent through MCA portal through prescribed mode, viz., by online or offline.

I. EFFECT OF NON-PAYMENT BEFORE DUE DATE

Note, if payment is not made by the date mentioned on the challan, the submission of form shall be treated as incomplete and message through e-mail will be received that form cannot be regarded as filed due to non-payment. Status of application and payment can be verified through MCA portal.

J. PHYSICAL SUBMISSION OF STAMPED DOCUMENTS

Subsequent to the filing of e-Forms, send immediately the original documents to the Registrar of Companies--

(i) Original and duly stamped and signed declaration;

(ii) Original and duly stamped and Signed Memorandum and Articles of Association.

Unless the above documents are submitted to the Regional Director in physical form to the Registrar of Companies quoting Service Request Number, filing shall be treated as incomplete and legal action shall be taken.

K. COPY OF APPLICATION TO BE FILED WITH RoC

The company shall file a copy of the application alongwith all the above cited enclosures with the appropriate RoC. [Regulation 10G]

L. SCRUTINY OF DOCUMENTS BY RoC

1. The concerned RoC will scrutinise all the documents so filed.

2. The RoC will scrutinise the memorandum and articles submitted with the copy of application, so as to ensure that the various provisions of the Companies Act, 1956 are complied with.

M. REPORT TO REGIONAL DIRECTOR BY RoC

1. The RoC will submit his report to the Regional director. He will forward the memorandum and articles to the Regional director with his report within 15 days of the receipt of the copy after listing the modification required in the same documents.

2. The RoC may advise to the Regional director whether or not the licence be granted to the proposed company, considering the personal information with respect to the promoters and the proposed members of the said proposed company.

3. The report submitted by the RoC may also provide about the necessity of location of new proposed company.

4. The report may also ask for the views of the District Magistrate of the concerned State within whose jurisdiction the registered office of the proposed company is to be situated.

5. In the aforesaid situation, a copy of the letter in reply by District Magistrate to the RoC will also be sent to the Regional director.

6. The Regional director makes a reference to the State Government in some serious matters.

7. The Regional directors, on receipt of the report will scrutinise the Memorandum and Articles carefully.

8. The Regional director may ask to the applicant to make necessary modifications in the memorandum and articles in accordance of scrutiny made to the RoC and the Departmental Officer.

9. The Regional director will also determine the objections, if any, received from the public in respect of licence to be granted.

10. The Regional director will also consult the concerned Ministries of the Central Government, if required.

11. The Regional Director will decide whether or not the licence be granted, considering the views of the State Government, the Central Government and the Ministries, if necessary, and also the objection of public in this behalf.

N. PUBLICATION OF NOTICE

1. A notice of the application made to the Regional director shall be published within a week from the date of making the application in the form set out in the Companies Regulations, 1956 or in a form as near thereto as circumstances admit. It shall be published at least once in a newspaper in principal language of the district in which the registered office of the proposed company is to be situated and circulating in that district and at least once in an English newspaper circulating in that district. [Regulations 11(a) and 11(b)]

2. A certified copy of the aforesaid notice as published shall be sent forthwith to the Regional director. [Regulations 11(a) and 11(b)]

O. MANNER OF PUBLICATION

The notice should be published in a newspaper in a principal language of the district in which the registered office of the company is situated and at least once in an English newspaper circulating in that district.

P. COPY OF NOTICE TO THE REGION DIRECTOR

After the notice is published, a certified copy of the notice should be forwarded to the Regional Director.

Q. ACTION BY REGIONAL DIRECTOR

It might be that subsequent to publishing of notice by the company, some objections are received within time as stipulated in the public notice, the Regional Director may, in consultation with authority, Department or Ministry at his discretion, decide and determine whether a licence should be issued or not.

R. ISSUE OF LICENCE

The Regional Director, after being satisfied that all objections have been removed and there remains no objection against the registration of the company under section 25, shall issue a licence as set out in Annexure IV of the Companies Regulations, 1956 or in a form as near thereto as circumstances allow.

S. CERTIFICATE OF INCORPORATION AND CORPORATE IDENTIFICATION NUMBER

On receiving the licence from the Regional Director, the company shall apply to the RoC to issue certificate of incorporation. On receipt of fresh certificate of incorporation, the company shall dispense with the words 'Limited' or 'Private Limited' as part of its name. However, company must pass a special resolution for change of name dropping the words 'Limited' or 'Private Limited' before it approaches RoC requesting for grant of certificate of incorporation.

T. SAFE CUSTODY

Original Certificate of Incorporation after receipt from the Registrar of Companies should be kept under safe custody.

U. PUBLICATION OF NAME

On incorporation of the company, publish the name of the company in the following manner :

(i) paint or affix its name and the address of its registered office and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible; and if the characters employed therefor are not those of the language, or one of the languages, in general use in that locality, also in the characters of that language or of one of those languages;

(ii) have its name engraven in legible characters on its seal;

(iii) have its name and the address of its registered office mentioned in legible characters in all its business letters, billheads and letter papers and in all its notices and other official publications; and also have its name so mentioned in all bill of exchange, hundies, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and in all bill of parcels, invoices, receipts and letters of credit of the company.

(iv) the company shall comply with the provisions of section 147 of the Act regarding publication of its name after incorporation.

V. PROHIBITION TO ALTER OBJECT CLAUSE

After obtaining licence under section 25 the company cannot change its object clause, in the Memorandum of Association except with the approval of the Regional Director.

W. POWER TO REVOKE LICENCE

The Regional Director shall revoke the licence granted by it to a company under section 25, if the company happens to :

(i) alter any of the clauses pertaining to the object of the company suo moto without the approval of Regional Director.

(ii) Contravenes any of the provisions of the Companies Act and rules framed under the Act.

X. EFFECT ON REVOCATION OF LICENCE

On such revocation, the company shall be compelled to enter the words 'Limited' or the words 'Private Limited' as the case may be, at the end of its name and it would cease to enjoy the exemptions which the Act has conferred on its incorporation as company registered under section 25.

Where the company was registered as a body whose name contained the words 'Chamber of Commerce', that body on revocation of licence by the Regional Director within a period of three months from the date of revocation of licence, shall change its name, which does not contain the words. However, the period of three months may, on request of the company be extended by the Regional Director.