{"id":5339,"date":"2020-03-25T19:44:42","date_gmt":"2020-03-25T14:14:42","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=5339"},"modified":"2022-09-10T14:35:59","modified_gmt":"2022-09-10T09:05:59","slug":"conversion-of-private-company-into-section-8-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-into-section-8-company\/","title":{"rendered":"Conversion of Private Company into Section 8 Company: Complete Procedure"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The concept of a Non-Profit Company is quite old in our country India. The Companies Act, 2013 provides for the Registration of Non-Profit Companies in India. Any person intending to form a Company with a non-profit object can register in India. Section 8 of <strong>Companies Act, 2013<\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/ebooks.html\"><strong>[1]<\/strong><\/a><\/sup><strong> <\/strong>, read with the Companies (Incorporation) Rules, 2014, provides for the incorporation of a Non-Profit Companies under the Act. Under Companies Act, 2013, the Non-Profit Company is also known as <a href=\"https:\/\/corpbiz.io\/section-8-company-registration\"><strong>Section 8 Company<\/strong><\/a>. In the article, we will discuss the procedure for Conversion of Private Company into Section 8 Company. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-into-section-8-company\/#What_is_a_Private_Company_and_a_Section_8_Company\" >What is a Private Company and a Section 8 Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-into-section-8-company\/#What_are_the_benefits_of_Conversion_of_Private_Company_into_Section_8_Company\" >What\nare the benefits of Conversion of Private Company into Section 8 Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-into-section-8-company\/#What_is_the_Procedure_for_Conversion_of_Private_Company_into_Section_8_Company\" >What\nis the Procedure for Conversion of Private Company into Section 8 Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-into-section-8-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Private_Company_and_a_Section_8_Company\"><\/span>What is a Private Company and a Section 8 Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-49.png\" alt=\"Private Company and a Section 8 Company\" class=\"wp-image-5340\" width=\"546\" height=\"319\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-49.png 576w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-49-300x175.png 300w\" sizes=\"(max-width: 546px) 100vw, 546px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Private\nCompany<\/h3>\n\n\n\n<p>A <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>Private Limited Company<\/strong><\/a> is defined under Section 2(68) of Companies Act, 2013. In a Private Company Articles of Association restrict the transferability of shares and prevent the public at large to subscribe for the shares of Private Company. <\/p>\n\n\n\n<p><strong><em>The Private Company can have a minimum paid-up\ncapital of any amount now after the amendment in the Companies Act, 2013.<\/em><\/strong> <strong><em>The maximum number of the members is 200 (except\nin case of the One Person Company) for Private Company.<\/em><\/strong> The maximum\nnumber of the members does not include any former employee or present employees\nof the Private Company. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Section\n8 Company<\/h3>\n\n\n\n<p>The <strong><em>Companies Act, 2013,<\/em><\/strong> provides the provisions relating to the Non-profit Company under Section 8 of the Act.<strong><em> Section 8 Company should have: <\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-50.png\" alt=\"Section 8 Company should have\" class=\"wp-image-5341\" width=\"552\" height=\"322\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-50.png 576w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-50-300x175.png 300w\" sizes=\"(max-width: 552px) 100vw, 552px\" \/><\/figure><\/div>\n\n\n\n<ul><li>Main\nobjects like promoting arts, science, commerce, research, education, sports,\ncharity, religion, social welfare<\/li><li>The\nprofit or any other income should be used in promoting the above objects<\/li><li>No\npayment of dividend to the members of the Company<\/li><\/ul>\n\n\n\n<p>The\nSection 8 Company is incorporated with the intent to carry on business with a\ncharitable objective.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_benefits_of_Conversion_of_Private_Company_into_Section_8_Company\"><\/span>What\nare the benefits of Conversion of Private Company into Section 8 Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The benefits of the Conversion of Private Company into\nSection 8 Company are as follows:<\/em><\/strong><\/p>\n\n\n\n<ul><li>There\nis an exemption from Stamp Duty during registration of the Section 8 Company.<\/li><li>Certain\nprivileges and exemptions under the Companies Act, 2013.<\/li><li>A\nfirm can also be a member of Section 8 Company.<\/li><li>The\nMemorandum of Articles (MoA) and Article of Association (AoA) of Section 8\ncannot be altered unless prior approval of the Central Government is taken. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Procedure_for_Conversion_of_Private_Company_into_Section_8_Company\"><\/span>What\nis the Procedure for Conversion of Private Company into Section 8 Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Whenever\nthere is a Conversion of Private Company into Section 8 Company, the Private\nCompany needs the approval of its Board Members through a special resolution\npassed in Annual General Meeting or Extraordinary General Meeting. After the\npassing of the special resolution, <strong><em>Form MGT-14 is to be filed with the\nRegistrar of companies (RoC). The MGT-14 should be filed within 30 days of\npassing of the special resolution by the Board.<\/em><\/strong>&nbsp; <\/p>\n\n\n\n<p><strong><em>The procedure for Conversion of Private Company into Section 8 Company is as follows:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-51.png\" alt=\"procedure for Conversion of Private Company into Section 8 Company\" class=\"wp-image-5342\" width=\"554\" height=\"319\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-51.png 588w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-51-300x173.png 300w\" sizes=\"(max-width: 554px) 100vw, 554px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Apply\nfor Name<\/h3>\n\n\n\n<p>The\nmembers should apply for the name in the <strong><em>(Reserve Unique Name) RUN Form<\/em><\/strong>. The\nRun form is submitted electronically on the official website of the Ministry of\nCorporate Affairs (MCA). The Form should be submitted with the fees as\nprescribed by the MCA. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Make\nApplication under Form RD-1 <\/h3>\n\n\n\n<p>An\napplication in Form RD-1 will be made to the Registrar of the Companies with\nthe prescribed fees for the incorporation of Section 8 Company. The following\ndocuments should be attached with RD-1 Form:<\/p>\n\n\n\n<ul><li>Form\nINC-12 should be attached with the application.<\/li><li>Draft\nof MoA for proposed Section 8 Company.<\/li><li>Draft\nof AoA for proposed Section 8 Company.<\/li><li>Declaration\nby Advocate, Chartered Accountant, or Company Secretary in practice as per\nINC-14.<\/li><li>Statement\nshowing the details of the Assets Liabilities of the Company as on the date of\napplication<\/li><li>The\nAudit Report of the existing Private Company <\/li><li>The\nBoard Report of the existing Private Company<\/li><li>Statement\nof estimation of future expenditure and annual income of the proposed Company\nfor the next 3 years.<\/li><li>The\nsources of income and the objects of expenditure should be mentioned.<\/li><li>A\ntrue certified copy of the resolution passed by the Board in the meeting\napproving the Company Registration under Section 8 Company<\/li><li>Declaration\nof each person making an application for the Conversion of Private Company into\nSection 8 Company as per INC-15.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Notice\nin Newspaper<\/h3>\n\n\n\n<p>A\nnotice should be published in the newspaper (one in the vernacular language\nnewspaper and one in English newspaper) by the Private Company of the\napplication made for Conversion of Private Company into Section 8 Company. The\nPrivate Company should bear the expenses of the publication of notice in the\nnewspaper. The notice should be published within a week from the date on which\nthe application is made to the Registrar for the Conversion of Private Company\ninto Section 8 Company. The Registrar should be given the copy of these\npublications as per Form INC-26 immediately after their publication in the\nnewspaper. &nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Grant\nof License <\/h3>\n\n\n\n<p>The\nRegistrar should consider the objections raised against the Conversion of\nPrivate Company into Section 8 Company after the publication of notice is made\nin the newspaper. <strong><em>The Objections should be raised within 30 days from the date of\npublication of notice in the newspaper<\/em><\/strong>. After considering the objections\nRegistrar of Companies (RoC), after consulting with the other authority or\nregulatory body, or Department of Central Government (CG) or State Government\n(SG), in his\/her discretion, should decide whether the license for Conversion\nof Private Company into Section 8 Company should be granted or not. The\nRegistrar should grant the license in Form INC-16 or INC-17 as prescribed by\nthe MCA. <\/p>\n\n\n\n<p>After\ngranting the license, the Registrar can direct the Company to insert certain conditions\nin the Memorandum of Association (MoA) or in the Articles of Association (AoA).\n&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> Section 8 Company is formed with a primary objective of charity. These Companies enjoy all the privileges and exemptions as provided in the Companies Act, 2013. To avail such privileges and exemptions, the Private Company goes for Conversion. The Conversion of Private Company into Section 8 Company is a lengthy and long-lasting task. We at <strong><a href=\"https:\/\/corpbiz.io\/\"><\/a><\/strong><a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> have skilful and competent professionals to assist you in the process of Conversion of Private Company into Section 8 Company. Our professionals will help and assist you in getting through the process of Conversion. Our professionals will plan correctly and assure the successful completion of the process.  <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/conversion-of-sole-proprietorship-firm-into-private-company\/\">Conversion of Sole Proprietorship Firm into Private Company\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The concept of a Non-Profit Company is quite old in our country India. The Companies Act, 2013 provides for the Registration of Non-Profit Companies in India. Any person intending to form a Company with a non-profit object can register in India. Section 8 of Companies Act, 2013[1] , read with the Companies (Incorporation) Rules, 2014, [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":5352,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[337,120],"tags":[422],"acf":{"service_id":"321"},"authorName":"Sakshi Sharda","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/sakshi-sharda.jpg","authorDescription":"Sakshi Sharda has done BBALLB(HONS) and holds a strong knowledge on the matters pertaining to finance and law. From the past one year she is working as a legal advisor and in her leisure time she works on improvising her knowledge. Sakshi is spreading her knowledge by writing for Corpbiz.","postViews":20329,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5339"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=5339"}],"version-history":[{"count":21,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5339\/revisions"}],"predecessor-version":[{"id":48594,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5339\/revisions\/48594"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/5352"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=5339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=5339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=5339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}