Formation of Non Profit/Section 25 company |
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Section
25 Company or a Non-Profit organization (NPO) is a Company
established for promoting commerce, art, science, religion,
charity or any other useful object, provided the profits,
if any, or other income is applied for promoting only the
objects of the company and no dividend is paid to its members. An NPO/NGO can be formed for promotion of any useful object like sports, education, research activities etc. The term No Profit does not mean that the Company cannot generate profit or income, but it essentially means applying the income for further promotion of the object and not for distributing it to the promoters. It means that the Company can earn profits but the promoters cannot be benefited out of those profits. |
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| Key Benefits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| • Many privileges
and exemptions under Company Law. • Exemption from requirement of Minimum Paid-up capital. • Exemption of Stamp duty for registration. • Non-application of Companies Auditor’s Report Order (CARO) 2003. • Registered partnership firm can be a member in its own capacity. • Tax deductions to the donors of the Company u/s. 80G of the Income Tax Act. |
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| Key Conditions: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Key Requirements: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• Minimum 2 Shareholders
(for Private Limited Co.) and 7 Shareholders (for Public
Limited Co.) |
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| Steps involved in formation of Section 25 Company/ Non-Profit organization | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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