A Non-profit organization can be registered as a Company under Section 8 of the Companies Act, 2013 corresponding to Section 25 of the Companies Act, 1956. Section 8 company can be incorporated for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object, provided it intends to apply its profits, if any, or other income in promoting its objects and intends to prohibit the payment of any dividend to its members.
STEP BY STEP PROCEDURE FOR FORMATION OF SECTION 8 COMPANY:
DSC/ DIN - To obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for all the proposed Directors of the Company if they don’t have the same.
Name Approval - An application in Form No. – INC 1 has to be filed with ROC (Central Registration Centre (CRC) of MCA) for Name Approval of proposed Section 8 Company. The Applicant can give maximum six desired names in order of preference. The name approved by the authority is valid for sixty days from the date of application. Please take note that the name of the Section 8 company shall include any of the following word i.e. Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust and the like etc in accordance with Rule 8(7) of the Companies (Incorporation) Rules, 2014.
MOA and AOA - After obtaining Name Approval, MOA & AOA have to be drafted and filed with the concerned RoC along with other documents in eForm INC-12 for issuance of license under Section 8 of the Companies Act, 2013. The subscription pages of MOA & AOA, it shall be signed by each subscriber to the memorandum who shall mention his name, address, description and occupation; if any; in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address, description and occupation, if any.
Form INC-12(Application for License u/s 8) - File form INC-12 for issuance of license under Section 8 of the Companies Act, 2013 along with the following attachments:
INC-13 Memorandum of Association.
Article of Association.
INC-15 Declaration by each Subscriber to MOA (On Non- judicial stamp paper of Rs. 100/- and duly notarized).
Estimated statement of Income & Expenditure for Next three years and it should be signed the proposed Promoters.
List of proposed Promoters and Directors of the Company.
Subscribers page (AOA & MOA) should be hand written by the Subsriber(s), and witness.
After the approval of Form INC-12, a license under Section 8 of the Companies Act, 2013 is issued in Form INC-16.
Filing of Incorporation Forms on MCA Portal: The following Forms are required to be filed with the concerned RoC:
A)Form No. INC – 7 (Application for incorporation of the Company) along with the following attachments:
Memorandum of association.
Articles of Association
Declaration in Form No. INC-8
Affidavit from each of the subscriber to the memorandum in Form No.INC-9
Proof of residential address of Subscribers
Specimen Signature in Form No. INC-10
Proof of Identity of Subscribers
NOC in case there is change in the promoters after name approval.
PAN card (in case of Indian national)
CTC of resolution/ board resolution authorizing to subscribe to MOA
Optional attachment, if any
B) Form No. INC – 22 (notice of situation of registered office) along with the following attachments:
Conveyance/Lease Deed/ Rent Agreement (Proof of ownership)
Electricity Bill Not older than 2 months.
No Objection Certificate on the letter head of promoter for using the premises.
C) Form No. DIR – 12 (appointment of directors of the company) alog with the following attachments:
DIR-2 (consent to act as Directors)
Affidavit by the Directors for Not accepting Deposits (On Non- judicial stamp paper of Rs. 100/- and duly notarised).
INC-9 Declaration by each Subscriber to Memorandum of Association (On Non- judicial stamp paper of Rs. 100/- and duly notarised).
Certificate of Incorporation- If the Concerned ROC is satisfied with all the forms, a Certificate of Incorporation is issued by the Registrar of Companies along with a unique Company Identification Number (CIN).
Revocation of the licence - Rule 8(6) the Companies (Incorporation) Rules, 2014 provides that the Central Government may, by order, revoke the licence granted to a company if the company contravenes any of the requirements of this section or any of the conditions subject to which a licence was granted 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. Without prejudice to any other action against the company, the Central Government may direct the company to convert its status and change its name to add the word ‘Limited’ or ‘Private Limited’ to its name and there upon the Registrar shall, without prejudice to any action that may be taken, on application, in the prescribed form, register the company accordingly. Such order shall not be passed unless the company is given reasonable opportunity of being heard. A copy of such order is to be given to the Registrar.
The Central Government may direct the company, the licence of which has been cancelled, if it is satisfied that it is essential in the public interest, to be wound up or amalgamated with another company registered under this section. Such order shall be passed only after giving reasonable opportunity to the company of being heard.
In case of amalgamation the Central Government may provide for such amalgamation to form a single company with such constitution, properties, powers, rights, interest, authorities and privileges and such liabilities, duties and obligations as may be specified in the order.
Penalty - 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.
Disclaimer: This Article has been written with a view to share the knowledge on the subject. The views expressed herein are not necessarily the views of any relevant statutes. It would be advisble to refer the respective provisions to act upon the same. In case of any queries kindly contact the undersigned.
The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. Compliance Calendar LLP and the Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. Compliance Calendar LLP shall not be responsible for any loss or damage in any circumstances whatsoever.