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Conversion Of Section 8 Company Into A Company Of Any Other Kind

Introduction

Section 8 Company is formed to encourage and nourish certain acts of art, education, science, sports, religion, charity, social welfare, research, protection of environment or any other related objective. The sec 8 company does not pay any bonus or dividend to its members. The profits of this company are used towards achieving and promoting the objective of the company.

Procedure for conversion:

  • Send notice to directors for convening Board Meeting as per section 173 and Secretarial Standards SS-1.
  • Convene and hold BM:
    • To consider the proposal of conversion.
    • To approve amendment in Articles of association by Special resolution in General Meeting.
    • To authorize director or any other eligible person to carry out the effect and all necessary acts required.
    • To fix the date, time, venue of General meeting and authorize director or any other eligible person to carry out the effect and all necessary acts required.
  • Company to send notice to members u/s 101 and SS-2 for convening General Meeting
  • Explanatory statements annexed to the notice of General Meeting:
    • Reasons for opting for such conversion.
    • Date of incorporation.
    • Principal Objects
    • Reasons as to why Objects cannot be carried on
    • Altered Objects, if any along with reason
    • Details of privileges enjoyed by the company.
    • Details of Conversion and its impact on the members.
  • Certified true copy of Special resolution in MGT-14 with Registrar of Companies.
  • Company shall file an application in form INC-18 with Regional Director along with MGT-14.
  • Company shall within a week of filling INC-18 publish a notice in at least once in vernacular newspaper and at least once in English newspaper and on website of the company.
  • Company shall send a notice along with copy of publication, copy of application , and other attachments to:
    • Regional Director in Form INC-19.
    • Chief commission of Income Tax
    • Income Tax Officer
    • Chief Secretary of State
    • Department/Authority of Central Government/State Government.
    • Other regulatory authorities.

    Such authorities may make representations, if any, within 60 Days. A copy of proof of serving such notice shall be included in application.

  • Board of Directors shall give declaration to the effect that no portion of the Income or Property of the Company is being paid or transferred, directly or indirectly, by way of dividend or bonus or otherwise to the persons or members.
  • Where a company taken any privileges, exemption, benefits grant from any authority then No Objection Certificate must be obtained from such respective authority and filled with Regional Director along with application.
  • On receipt of application Regional Director may order approving such Conversion provided:
    • Company shall give up all special exemptions, privileges under section 8.
    • If company acquired any immovable property free of cost or at concessional cost, may be required to pay off the difference amount.
    • Any accumulated profit be first utilized to settle all outstanding dues and liabilities, if any amount remains will be transferred to IEPF ( Investor Education and Protection Fund account).
  • After considering Regional Director may accept or reject the application after giving an Opportunity of being heard.
  • On receipt of approval from Regional Director.
  • Company shall duly convene and conduct General meeting pass Special Resolution to carry out amendments in Memorandum of Association, Articles of Association.
  • Company shall file the certified copy of approval in form INC-20 with Registrar of Companies along with:
    • Amended Memorandum of Association /Article of association.
    • Declaration by Directors that all imposed conditions have been complied with.
  • Registrar of Companies on being satisfied with the documents filled may issue a Certificate of Incorporation.
 
     
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