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Section 25 Company

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Section 25 company is one of the popular forms of Non- Profit Organisation in India. Section 25 companies, under the Companies Act 1956, are companies formed for promoting commerce, art, science, religion, charity or any other useful object. The profits accrued or any other income obtained is used in promotion of its objectives and it prohibits payment of any dividend to its members. It may be registered as a Company with limited liability without the addition of words “limited” or “private limited” in its name. As per the Companies Act 1956, the minimum share capital required by a public company is Rs Five lakh and by a private company is Rs One lakh. However a Section 25 company is not required to have any minimum paid up capital. Further this category of company is required to maintain book of accounts relating to a period of four years only instead of eight years stipulated for other companies under the Companies Act 1956. The list of Section 25 companies may be viewed at the following link;

As per the new Companies Bill 2012, Section 25 has now become Section 8. The new bill provides for provision of person or an association of persons to be registered under this Act as a Limited Company whereas the Companies Act 1956mentionedonly an ‘association’ to be registered as a Company. Further section 8 of the new bill includes in its ambit companies formed for promotion of sports, education, research, social welfare and protection of environment. It also provides that a company shall amalgamate only with another company registered under this section and having similar objects. The new bill has stringent provisions for non-compliance. If a company makes a default in complying with any of the requirements laid in this section, the company will be have pay a fine of not less than ten lakh rupees extendable upto one crore rupees. Further every Director and every officer of the company who is in default shall be punishable with imprisonment for upto 3 years or a fine of not less than twenty five thousand rupees extendable to twenty five lakh rupees or both.


  1. Companies Act 1956

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