Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Sec 25 Companies

s.vaidyanathan (CA ) (119 Points)

11 February 2011

Are Section 25 companies are exempted from filing of annual returns Pls clarify on this issue

Reply
Follow
Share

5 Replies

SANTOSH SHAH (Company Secretary) (754 Points)
Replied 11 February 2011

Originally posted by : s.vaidyanathan
	Are Section 25 companies are exempted from filing of annual returns Pls clarify on this issue

Hello Mr Vaidyanathan

In my opinion i dont think so.

Section 25 companies are companies formed with the purpose of promoting its objects like Science, commerce,arts, , religion, charity etc.

Company with Share capital to file annual return like any normal filing of companies. ( Form 20B) & Annual return form .

Company without Share capital to file annual return in Form 21A.

Other views welcome.

regards

Santosh Shah

Upgrade to CAclubindia Pro. Subscribe Now!

s.vaidyanathan (CA ) (119 Points)
Replied 11 February 2011

@ santhosh Thanks for ur reply. I too agree with ur view but i somewhere read an article which said that sec 25 companies are exempted from filing of annual returns. The said article read as follows:

Section not applicable to Section 25 Companies:

Provision of Act

Title of Provision and summary of Section / sub - section.

Extent of exemption

160(1)(aa)

Annual return to be made by company not having a share capital :

(1) Every company not having a share capital shall, within[sixty] days from the day on which each of the annual general meeting referred to in section 166 is held, prepare and file with the Registrar a return stating the following particulars as they stood on that day:-

(aa) the names of members and the respective date on which they became members and the names of persons who ceased to be members since that date of the annual general meeting of the immediately preceding year, and the dates on which they so ceased

The Whole

SANTOSH SHAH (Company Secretary) (754 Points)
Replied 11 February 2011

Originally posted by : s.vaidyanathan
	@ santhosh Thanks for ur reply. I too agree with ur view but i somewhere read an article which said that sec 25 companies are exempted from filing of annual returns. The said article read as follows: Section not applicable to Section 25 Companies: Provision of Act Title of Provision and summary of Section / sub - section. Extent of exemption 160(1)(aa) Annual return to be made by company not having a share capital : (1) Every company not having a share capital shall, within[sixty] days from the day on which each of the annual general meeting referred to in section 166 is held, prepare and file with the Registrar a return stating the following particulars as they stood on that day:- (aa) the names of members and the respective date on which they became members and the names of persons who ceased to be members since that date of the annual general meeting of the immediately preceding year, and the dates on which they so ceased The Whole

I didnot find anywhere such exemption given. There are so many changes happening in various sections from time to time so always only refer the law where details of amendement with date are mentioned.

Kindly refer the bare acts which might be helpful to you.

https://www.vakilno1.com/bareacts/companiesact/s160.htm

Also take Expert opinion in this regard.

regards

Santosh Shah

s.vaidyanathan (CA ) (119 Points)
Replied 11 February 2011

Thanks a lot for ur timely efforts santhosh

cs ashwini kumar (Company Secretary in Practice) (173 Points)
Replied 11 February 2011

Hi Everyone !

for the benefit of the members of the forum, I am reproducing the relevant portion on exemption available to Section 25 Companies(extracted from the books on Company Law by Chandratre and Ghosh):

Obligations, exemptions and privileges

On a licence being granted, the company will be entitled to the special privileges and exemptions notified by the Central Government under sub-section (6) of this section. At the same time, it will be subject to all the obligations of limited companies.[27] The companies licensed under section 25 are generally companies limited by guarantee, with or without share capital. Such a company may be either a private company or a public company.

According to sub-section (6), the Central Government may exempt the companies to which licence has been granted under the present section from the provisions of the Act if the Central Government by general or special order so directs and to the extent specified in such order. In exercise of this power, the Central Government has issued the following notifications granting the exemptions specified therein:

"1.

In exercise of the powers conferred by sub-section (6) of section 25 of the Companies Act, 1956 (1 of 1956), the Central Government hereby directs that a body to which a licence is granted under section 25 aforesaid shall be exempt from the provisions of the said Act specified in column 1 of the Table below to the extent specified in the corresponding entries in column 2 of the said Table:

Table

Provisions of Act	Extent of Exemption
Section 147	The whole.
Section 160(1)(aa)	The whole.
Section 166(2)	The whole: provided that the time, date and place of each annual general meeting are decided upon before hand by the Board of Directors having regard to the directions, if any, given in this regard by the company in general meeting.
Section 171(1)	A general meeting may be called by giving a notice in writing of not less than 14 days.
Section 209(4A)	Books of accounts relating to a period of not less than four years immediately preceding the current year shall be preserved.
Section 219	Shall be exempt to the extent that documents mentioned in sub-section (1) may be sent not less than 14 days before the date of general meeting.
Section 257	Shall not apply to companies whose articles provide for election of directors by ballot.
Section 264(1)	The whole.
*Section 280	The whole.
*Section 282	The whole.
Section 285	Shall apply only to the extent that the Board of Directors' Executive Committee or Governing Committee of such companies shall hold at least one meeting within every six calendar months.
Section 287	Shall apply only to the extent that the quorum for the Board meeting shall be either eight members or 1/4th of its total strength whichever is less provided the quorum shall not be less than two members in any case.
Section 299	Shall apply only to cases to which sub-sections (1) and (3) of section 297 apply.
Section 301	A register shall be maintained only of contracts to which sub-sections (1) and (3) of section 297 apply.
Section 303(2)	The whole.

(*) Omitted by Act 31 of 1965.[28]

"2.

In exercise of the powers conferred by sub-section (6) of section 25 of the Companies Act, 1956 (1 of 1956), read with Notification of the Government of India in the Ministry of Finance (Department of Revenue) GSR No. 178, dated the 1st February, 1964, the Company Law Board hereby directs that a body to which a licence is granted under section 25 aforesaid shall be exempt from the provisions of the said Act specified in column 1 of the Table below to the extent specified in the corresponding entries in column 2 of the said Table.

Table

Provisions of the Act	Extent of Exemption
Section 193	Minutes may be recorded within 30 days of the conclusion of every meeting in case of companies where the articles of association provide for confirmation of minutes by circulation.
Section 259	The whole.
Section 292	Matters referred to in clauses (c), (d) and (e) of sub-section (1) may be decided by the Board by circulation instead of at a meeting.[29]

3.	"In exercise of the powers conferred by sub-section (6) of section 25 of the Companies Act, 1956 (1 of 1956), read with Notification of the Government of India in the Ministry of Finance (Department of Revenue) GSR No. 178, dated the 1st February, 1964 the Company Law Board hereby directs that a body to which a licence is granted under section 25 of the said Act, shall be exempt from the provisions of section 219 of the said Act to the extent that the documents mentioned in sub-section (1) of the said section 219 may be sent not less than fourteen days before the date of the general meeting."[30]
4.	"In exercise of the powers conferred by sub-section (6) of section 25 of the Companies Act, 1956 (1 of 1956), the Central Government hereby directs that a body to which a licence is granted under section 25 aforesaid shall be exempt from the provisions of clause (45) of section 2 of the said Act in so far as they require the appointment of the individual to perform the duties which may be performed by a Secretary under the said Act and any other ministerial or administrative duties only if he possesses the prescribed qualifications.[31]
5.	"In exercise of the powers conferred by sub-sections (1) and (2) of section 613 of the Companies Act, 1956 (1 of 1956), the Central Government hereby orders that the fees payable under section 611 of the said Act read with Schedule X thereto, for the registration, as a company with limited liability, of an association not for profit which is licensed under section 25 of the said Act shall
(i)	where the association has a share capital; or
(ii)	where the association has no share capital and the number of members is stated in its articles of association to exceed twenty or to be unlimited,

be fifty rupees.

2. The Order of the Government of India in the Ministry of Finance (Department of Company Law Administration) No. SRO 771, dated the 1st April, 1956 is hereby cancelled."

Best Regards

CS Ashwini Kumar