Conversion to Section 8 Company Filing with Registrar
If you manage society and want to take it to the next level, the conversion to Section 8 company filing with the registrar can be smart. You can enjoy several benefits by registering as a Section 8 business, including restricted liability, tax exemptions, and greater flexibility in fundraising and investing. However, turning society into a Section 8 business is a complicated procedure that requires careful preparation and execution to assure compliance with all legal criteria. In this guide, we’ll explore the steps involved in this process and provide the information you need to make informed decisions about your organisation’s future.
What Is the Procedure for Conversion of a Private Company to a Section 8 Company?
When a Private Company becomes a Section 8 Company, the Private Company’s Board of Directors must agree to the change by passing a special motion at an Annual General Meeting or an Extraordinary General Meeting. Form MGT-14 must be sent to the Registrar of Companies (RoC) after passing the special resolution. The MGT-14 should be sent 30 days after the Board passes the special motion.
Here’s what you need to do to change a private company into a Section 8 company:
Request Your Name
The members should fill out the (Reserve Unique Name) RUN Form to request the name. The Run application is submitted electronically via the Ministry of Corporate Affairs (MCA) website. The Form must be submitted along with the MCA-prescribed fees.
Alter the MOA and AOA
Memorandum and Articles of Association should be altered to change objects in line with the Section-8 Company.
Submit an Application Using Form RD-1
Form RD-1 and the required fees must be submitted to the Registrar of Companies to incorporate a Section 8 company. The following documents must accompany the RD-1 Form:
- Form INC-12 should accompany the application.
- Draught of the Articles of Association for the proposed Section 8 company.
- Draught of the Articles of Association for the proposed Section 8 company.
- Declaration by a practising Attorney, Chartered Accountant, or Company Secretary per INC-14.
- A statement detailing the Assets and Liabilities of the Company as of the application date
- The Private Company’s Existing Audit Report
- The Board Report of the existing Private Company’s Proposed Statement of Estimated Future Expenditures and Annual Income for the Next Three Years.
- The sources of revenue and expenditures should be specified.
- A copy of the resolution adopted by the Board at the meeting approving the Company Registration under Section 8 of the Companies Act
- Declaration of each individual applying the Conversion of a Private Company to a Section 8 Company by INC-15.
Notification in the Newspaper
The Private Company must publicise a notice in the newspaper (one in the vernacular and one in the English language newspaper) regarding its application to convert into a Section 8 Company. The Private Company should cover the cost of a notice published in the newspaper. The notice must be published within one week of the application for Conversion of Private Company into Section 8 Company being submitted to the registrar. Immediately following their publication in the newspaper, a copy of these publications should be forwarded to the Registrar per Form INC-26.
Grant Of Licence
After the publication of the notice in the newspaper, the registrar should assess any objections to the conversion of a private company into a Section 8 company. Objections must be filed within 30 days of the publication date of the disclosure in the newspaper. The licence for Conversion of a Private Company to a Section 8 Company should be granted or denied after considering the objections and consulting with the other authority or regulatory body, Department of Central Government (CG), or State Government (SG). The registrar should issue the licence using MCA-mandated Forms INC-16 or INC-17.
After granting the licence, the registrar may direct the company to include certain conditions in its Memorandum of Association (MoA) or Articles of Association (AoA).
What Documents Are Required for Conversion of Society into Section 8 Company?
The following paperwork is often needed to change society into a Section 8 company:
- The proposed Section 8 company’s Memorandum of Association (MOA) and Articles of Association (AOA).
- A duplicate of the society’s resolution to become a Section 8 business.
- A duplicate of the registration certificate for the society, signed by the Registrar of Societies.
- A properly certified statement of the society’s assets and liabilities from a chartered accountant.
- A copy of the society’s most recent financial statements, including the profit and loss account and balance sheet, have been properly audited by a chartered accountant.
- A statement from the society’s secretary or president attesting to the application’s accuracy and its annexures.
- Other records that the Registrar of Companies may demand to include affidavits, declarations, and letters of consent.
It is significant to note that depending on the state or jurisdiction in which the society is registered and the precise requirements of the Registrar of Companies, the documents needed for conversion may differ. A legal expert should be consulted for the conversion procedure and related paperwork.
What Is the Procedure for Conversion of Society to Section 8 Company?
Following is the procedure for converting a society to a Section 8 company:
The society must first obtain a licence from the Regional Director of the Ministry of Corporate Affairs (MCA) to convert into a Section 8 company. The society must submit a Form RD-1 application along with the necessary documentation.
General meeting: The society must hold a general meeting and pass a resolution sanctioning the conversion to a Section 8 company. The resolution must include the proposed name of the Section 8 company, its registered office address, and the proposed quantity of the company’s guarantee.
Apply for name approval: The Registrar of Companies (ROC) must authorise the proposed name of the Section 8 company. The society must submit a Form INC-1 application for name availability and the required filing fee.
Registration of Documents: After the name has been approved, the society must register the incorporation documents, including the Memorandum of Association (MOA) and Articles of Association (AOA), along with the required filing fee on Form INC-12. The MOU and AOA must comply with the provisions of the 2013 Companies Act.
Obtain the certificate of incorporation: The ROC will investigate the incorporation documents and, if satisfied, will issue a certificate of incorporation in Form INC-16. The date listed on the certificate of incorporation will be the Section 8 company’s date.
Apply for PAN and TAN: The Section 8 company must apply to the Income Tax Department for a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN).
Transfer of assets and liabilities: According to the conversion scheme approved by the MCA Regional Director, the society must transfer all of its assets and liabilities to the Section 8 company.
FAQs: Conversion to Section 8 Company Filing with Registrar
Can we convert society into a Section 8 company?
By following the authorised method, a society can be changed into a Section 8 corporation.
Does a Section 8 company have a board of directors?
A Section 8 business does have a board of directors, which is in charge of administering the firm’s affairs.
What is the difference between an NGO and a Section 8 company?
The primary distinction between an NGO and a Section 8 corporation is that the latter is registered under the Companies Act of 2013, with restricted liability, and the former is registered under the Societies Registration Act of 1860, with unlimited liability.
In conclusion, the conversion to section 8 company filing with the registrar can be a complex process that involves multiple steps and requires submitting several documents to the Registrar of Companies. The major goal of Section 8 Company’s formation is charitable objectives. These Corporations benefit from all rights and exemptions stipulated in the 2013 Companies Act. The Private Company seeks conversion to receive such benefits and exemptions. It takes time and effort to convert a private company into a Section 8 company.
At Instafilings, we have skilled and knowledgeable individuals available to help you convert your private company into a Section 8 company. You will receive assistance and support from our pros as you go through the conversion process. Our experts will make the proper plans and ensure the process is carried out successfully.
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