A group of promoters propose to establish a company for charitable purposes without the addition of the word ‘Limited’ as part of its name

A group of promoters propose to establish a company for charitable purposes without the addition of the word ‘Limited’ as part of its name. Discuss briefly the procedure to be followed in addition to the normal procedure for incorporation of a

company. [C.A. (Final) May, 2001)

flLns. For establishing a company for charitable purpose and without the addition of the word ‘Limited” as part of its name, the promoters have to take the following steps

to obtain permission of the Central Government.

‘-- - --

I. An application has to be made to the Regional Director of the concerned !,egicm

along with the following documents:

(a) Three ce:; of draft memorandum and articles of association of the

proposed company.

(b) A declaration that all requirements pertaining to the formation of the

company have been duly complied with.

(c) Three copies of list of names of the promoters as well as the proposed

directors together with the narhes of companies in which they are inter

ested along with the relevant particulars.

(d) A statement showing the assets and liabilities of the association as on the

date of the application or within seven days of that date. J ‘,. I

(e) An eS’timate of the future annual income and expenditure of the proposed

company.

(j) A statement giving a brief description of the work proposed to be done

after formation which must be non-commercial.

(g) A declaration that profits, if any, shall not be distributed by way of

dividends but shall instead be used for furtherance of the cause for which

the company has been established.

(It) A statement specifying briefly the grounds on which the application is made. (i) A declaration by the applicants regarding their competence to make the

application.