Compliance Corporate Filings

Formation of Section 8 Company : A person or an association of persons can make an application to the Registrar of Companies using requisite forms to form a company with charitable objectives under Section 8 of Companies Act. ... It is important to note that such companies can only be limited companies

 

The term “person” is not defined under the Companies Act, 2013. of individuals, whether incorporated or not. Therefore such a person can be natural or a legal person. It is also relevant to note that by virtue of provisions of section 8(3), even a partnership firm can be a member of Section 8 Company

Section 8 Company is registered under the Central Government's Ministry of Corporate Affairs. Trusts and Societies are registered under State Government regulations. A section 8 company has various advantages when compared to Trust or Society like improved recognition and better legal standing

Formation of companies with charitable objects, etc

(1) Where it is proved to the satisfaction of the Central Government that a person or

an association of persons proposed to be registered under this Act as a limited company—

(a) has in its objects the promotion of commerce, art, science, sports, education,

research, social welfare, religion, charity, protection of environment or any such other

object;

(b) intends to apply its profits, if any, or other income in promoting its objects;

and

(c) intends to prohibit the payment of any dividend to its members,

the Central Government may, by licence issued in such manner as may be prescribed, and on

such conditions as it deems fit, allow that person or association of persons to be registered

as a limited company under this section without the addition to its name of the word “Limited”,

or as the case may be, the words “Private Limited” , and thereupon the Registrar shall, on

application, in the prescribed form, register such person or association of persons as a

company under this section.

(2) The company registered under this section shall enjoy all the privileges and be

subject to all the obligations of limited companies.

(3) A firm may be a member of the company registered under this section.

(4)           (i) A company registered under this section shall not alter the provisions of its

memorandum or articles except with the previous approval of the Central Government.

(ii) A company registered under this section may convert itself into company of any

other kind only after complying with such conditions as may be prescribed.

(5) Where it is proved to the satisfaction of the Central Government that a limited

company registered under this Act or under any previous company law has been formed

with any of the objects specified in clause (a) of sub-section (1) and with the restrictions and

prohibitions as mentioned respectively in clauses (b) and (c) of that sub-section, it may, by

licence, allow the company to be registered under this section subject to such conditions as

the Central Government deems fit and to change its name by omitting the word “Limited”, or

as the case may be, the words “Private Limited” from its name and thereupon the Registrar

shall, on application, in the prescribed form, register such company under this section and all

the provisions of this section shall apply to that company.

(6) The Central Government may, by order, revoke the licence granted to a company

registered under this section if the company contravenes any of the requirements of this

section or any of the conditions subject to which a licence is issued or the affairs of the

company are conducted fraudulently or in a manner violative of the objects of the company

or prejudicial to public interest, and without prejudice to any other action against the company

under this Act, direct the company to convert its status and change its name to add the word

“Limited” or the words “Private Limited”, as the case may be, to its name and thereupon the

Registrar shall, without prejudice to any action that may be taken under sub-section (7), on

application, in the prescribed form, register the company accordingly:

Provided that no such order shall be made unless the company is given a reasonable

opportunity of being heard:

Provided further that a copy of every such order shall be given to the Registrar.

(7) Where a licence is revoked under sub-section (6), the Central Government may, by

order, if it is satisfied that it is essential in the public interest, direct that the company be

wound up under this Act or amalgamated with another company registered under this section:

Provided that no such order shall be made unless the company is given a reasonable

opportunity of being heard.

(8) Where a licence is revoked under sub-section (6) and where the Central Government

is satisfied that it is essential in the public interest that the company registered under this

section should be amalgamated with another company registered under this section and

having similar objects, then, notwithstanding anything to the contrary contained in this Act,

the Central Government may, by order, provide for such amalgamation to form a single

company with such constitution, properties, powers, rights, interest, authorities and privileges

and with such liabilities, duties and obligations as may be specified in the order.

(9) If on the winding up or dissolution of a company registered under this section,

there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred

to another company registered under this section and having similar objects, subject to such

conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to the

Rehabilitation and Insolvency Fund formed under section 269.

(10) A company registered under this section shall amalgamate only with another

company registered under this section and having similar objects.

(11) If a company makes any default in complying with any of the requirements laid

down in this section, the company shall, without prejudice to any other action under the

provisions of this section, be punishable with fine which shall not be less than ten lakh

rupees but which may extend to one crore rupees and the directors and every officer of the

company who is in default shall be punishable with imprisonment for a term which may

extend to three years or with fine which shall not be less than twenty-five thousand rupees

but which may extend to twenty-five lakh rupees, or with both:

Provided that when it is proved that the affairs of the company were conducted

fraudulently, every officer in default shall be liable for action under section 447Formation of companies with charitable objects, etc

(1) Where it is proved to the satisfaction of the Central Government that a person or

an association of persons proposed to be registered under this Act as a limited company—

(a) has in its objects the promotion of commerce, art, science, sports, education,

research, social welfare, religion, charity, protection of environment or any such other

object;

(b) intends to apply its profits, if any, or other income in promoting its objects;

and

(c) intends to prohibit the payment of any dividend to its members,

the Central Government may, by licence issued in such manner as may be prescribed, and on

such conditions as it deems fit, allow that person or association of persons to be registered

as a limited company under this section without the addition to its name of the word “Limited”,

or as the case may be, the words “Private Limited” , and thereupon the Registrar shall, on

application, in the prescribed form, register such person or association of persons as a

company under this section.

(2) The company registered under this section shall enjoy all the privileges and be

subject to all the obligations of limited companies.

(3) A firm may be a member of the company registered under this section.

(4)           (i) A company registered under this section shall not alter the provisions of its

memorandum or articles except with the previous approval of the Central Government.

(ii) A company registered under this section may convert itself into company of any

other kind only after complying with such conditions as may be prescribed.

(5) Where it is proved to the satisfaction of the Central Government that a limited

company registered under this Act or under any previous company law has been formed

with any of the objects specified in clause (a) of sub-section (1) and with the restrictions and

prohibitions as mentioned respectively in clauses (b) and (c) of that sub-section, it may, by

licence, allow the company to be registered under this section subject to such conditions as

the Central Government deems fit and to change its name by omitting the word “Limited”, or

as the case may be, the words “Private Limited” from its name and thereupon the Registrar

shall, on application, in the prescribed form, register such company under this section and all

the provisions of this section shall apply to that company.

(6) The Central Government may, by order, revoke the licence granted to a company

registered under this section if the company contravenes any of the requirements of this

section or any of the conditions subject to which a licence is issued or the affairs of the

company are conducted fraudulently or in a manner violative of the objects of the company

or prejudicial to public interest, and without prejudice to any other action against the company

under this Act, direct the company to convert its status and change its name to add the word

“Limited” or the words “Private Limited”, as the case may be, to its name and thereupon the

Registrar shall, without prejudice to any action that may be taken under sub-section (7), on

application, in the prescribed form, register the company accordingly:

Provided that no such order shall be made unless the company is given a reasonable

opportunity of being heard:

Provided further that a copy of every such order shall be given to the Registrar.

(7) Where a licence is revoked under sub-section (6), the Central Government may, by

order, if it is satisfied that it is essential in the public interest, direct that the company be

wound up under this Act or amalgamated with another company registered under this section:

Provided that no such order shall be made unless the company is given a reasonable

opportunity of being heard.

(8) Where a licence is revoked under sub-section (6) and where the Central Government

is satisfied that it is essential in the public interest that the company registered under this

section should be amalgamated with another company registered under this section and

having similar objects, then, notwithstanding anything to the contrary contained in this Act,

the Central Government may, by order, provide for such amalgamation to form a single

company with such constitution, properties, powers, rights, interest, authorities and privileges

and with such liabilities, duties and obligations as may be specified in the order.

(9) If on the winding up or dissolution of a company registered under this section,

there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred

to another company registered under this section and having similar objects, subject to such

conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to the

Rehabilitation and Insolvency Fund formed under section 269.

(10) A company registered under this section shall amalgamate only with another

company registered under this section and having similar objects.

(11) If a company makes any default in complying with any of the requirements laid

down in this section, the company shall, without prejudice to any other action under the

provisions of this section, be punishable with fine which shall not be less than ten lakh

rupees but which may extend to one crore rupees and the directors and every officer of the

company who is in default shall be punishable with imprisonment for a term which may

extend to three years or with fine which shall not be less than twenty-five thousand rupees

but which may extend to twenty-five lakh rupees, or with both:

Provided that when it is proved that the affairs of the company were conducted

fraudulently, every officer in default shall be liable for action under section 447