{"id":100988,"date":"2020-10-01T06:12:56","date_gmt":"2020-10-01T00:42:56","guid":{"rendered":"https:\/\/legalwindow.in\/?p=100988"},"modified":"2022-04-25T13:24:59","modified_gmt":"2022-04-25T07:54:59","slug":"how-to-convert-private-company-into-a-section-8-company","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/how-to-convert-private-company-into-a-section-8-company\/","title":{"rendered":"How to convert Private Company into a Section 8 Company?"},"content":{"rendered":"\r\n<p style=\"text-align: justify;\">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\u00a0Companies Act, 2013. 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 Section 8 Company. In the article, we will discuss the procedure for Conversion of Private Company into Section 8 Company.<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"538\" class=\"wp-image-100989\" title=\"How to convert Private Company into a Section 8 Company?\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/All-you-need-to-know-about-Franchise-Agreement-og-5-2-1024x538.png\" alt=\"convert Private Company into a Section 8 Company\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/All-you-need-to-know-about-Franchise-Agreement-og-5-2-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/All-you-need-to-know-about-Franchise-Agreement-og-5-2-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/All-you-need-to-know-about-Franchise-Agreement-og-5-2-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/All-you-need-to-know-about-Franchise-Agreement-og-5-2-768x403.png 768w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/All-you-need-to-know-about-Franchise-Agreement-og-5-2.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\r\n\r\n\r\n\r\n<h3><strong>Advantages of converting Private Company into <\/strong><strong>Section 8 Company<\/strong><\/h3>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\">Privilege and exemption under the provisions of Companies Act 2013<\/li>\r\n<li class=\"lists\">No stamp Duty for Registration<\/li>\r\n<li class=\"lists\">Tax deduction under Section 12A and Section 80G of income tax to the organization\u2019s income and to the donors.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h3><strong>Concept of Private Limited Company<\/strong><\/h3>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">The term \u201cPrivate Limited Company\u201d denotes a business format, which is privately held by a group of people known as Shareholders. \u00a0Further, this business format is chosen by all the start-ups and the business with high growth potential.<\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Section 2 (68)\u00a0of the\u00a0Companies Act 2013\u00a0defines the term \u201cPrivate Limited Company\u201d. In this format, the\u00a0Articles of Association\u00a0restricts the shareholders of the company from transferring their shares.<\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">As per the\u00a0Companies (Amendment) Act 2015, the requirement of having the\u00a0minimum paid up capital\u00a0for the\u00a0Private Limited Company Registration\u00a0has now been removed.<\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Further, for\u00a0incorporating a <a href=\"https:\/\/legalwindow.in\/private-limited-company\/\">Private Limited Company in India<\/a>, a\u00a0minimum of 2\u00a0and a\u00a0maximum of 200 members\u00a0are required. However, the term \u201cmember\u201d does not include both\u00a0former\u00a0and\u00a0present\u00a0employee.<\/p>\r\n\r\n\r\n\r\n<h3><strong>Concept of Section 8 Company<\/strong><\/h3>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">The term \u201cSection 8 Company\u201d denotes an\u00a0NPO\u00a0(Non Profit Organization) which promotes Arts, Education, Charitable Purpose, Protection of Environment, Science, Sports, Research, Religion and Social Welfare.<\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Further, the income earned by an NPO cannot be utilized for paying out dividends to the member of the company. Moreover, the same should be used only for the promotion of charitable objectives.<\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Furthermore, such companies need to obtain a\u00a0certificate\u00a0of\u00a0section 8 company registration\u00a0from the central government and are liable to comply with the rules specified by the government as well.<\/p>\r\n\r\n\r\n\r\n<h3><strong>Documents Required for the Process of Conversion<\/strong><\/h3>\r\n\r\n\r\n\r\n<p>The\u00a0documents required for the process of conversion\u00a0are as follows:<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\">Draft of MOA (Memorandum of Association);<\/li>\r\n<li class=\"lists\">Draft of AOA (Articles of Association);<\/li>\r\n<li class=\"lists\">A Declaration in Form INC 14 by either of the following:<\/li>\r\n<li class=\"lists\">Advocate;<\/li>\r\n<li class=\"lists\">Practising Chartered Accountant; or<\/li>\r\n<li class=\"lists\">Practising Company Secretary;<\/li>\r\n<li class=\"lists\">Statement showing the information about the Assets or Liabilities of the Company (As on the Date of Application);<\/li>\r\n<li class=\"lists\">An Audit Report of the existing Private Company;<\/li>\r\n<li class=\"lists\">A copy of the Board Report of the existing Private Company;<\/li>\r\n<li class=\"lists\">A Statement regarding the estimation of the \u201cFuture Expenditure\u201d and \u201cAnnual Income\u201d of the proposed Company for the next 3 Financial Years;<\/li>\r\n<li class=\"lists\">Details regarding the Income Sources;<\/li>\r\n<li class=\"lists\">Details regarding the Objects of Expenditure;<\/li>\r\n<li class=\"lists\">A True and Certified copy of the Board Resolution passed by the Board of Directors in the meeting for approving the \u201cCompany Registration\u201d under Section 8 Company;<\/li>\r\n<li class=\"lists\">Declaration filed in Form INC 15 by each person who is making an application for the \u201cConversion of Private Company into Section 8 Company\u201d;<\/li>\r\n<\/ul>\r\n\r\n<p><a href=\"https:\/\/legalwindow.in\/section-8-company-npo\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-103879 size-full\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Section-8-1.jpg\" alt=\"Section-8 Company Registration\" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Section-8-1.jpg 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Section-8-1-600x120.jpg 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Section-8-1-300x60.jpg 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Section-8-1-768x154.jpg 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\r\n\r\n<h3><strong>Forms Required for the Process of Conversion<\/strong><\/h3>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>Form No<\/strong><\/td>\r\n<td><strong>Purpose of the Form<\/strong><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>RUN Form<\/td>\r\n<td>For applying name with MCA (Ministry of Corporate Affairs)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Form RD 1<\/td>\r\n<td>Application for the Process of Conversion<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Form INC 14<\/td>\r\n<td>Declaration From the Practising Advocate, Chartered Accountant, and Company Secretary<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Form INC 15<\/td>\r\n<td>Declaration by each person who is making an application for the \u201cConversion of Private Company into Section 8 Company\u201d<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Form INC 26<\/td>\r\n<td>For filing the copies of Publication with the Registrar of Companies<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"padding: 9px; border-bottom: 1px solid #555; text-align: left; font-size: 16px;\">Form INC 16 or Form INC 17<\/td>\r\n<td style=\"padding: 9px; border-bottom: 1px solid #555; text-align: left; font-size: 16px;\">Grant of License by the Registrar<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<h3><strong>Procedure<\/strong><strong> for Conversion of a Private Limited company into Section 8 Company<\/strong><\/h3>\r\n\r\n\r\n\r\n<p>Following is the process for conversion of a Private Limited Company into Section 8 Company:<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\"><strong>Application for Name Reservation<\/strong>: <br \/>The Promoters shall apply for the name reservation of the proposed Company with concerned ROC of the state where the proposed Company has to be formed in the E-Form INC-1 with the prescribed fees.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\"><strong>Application for conversion in E-form RD-1<\/strong>:<br \/>Now, a person or association of persons who want to convert into section 8 company shall file an application under E-form RD-1 along with prescribed fees to the registrar to grant a license under the\u00a0Section 8 Companies act 2013.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\"><strong>Notice in Newspaper for Conversion<\/strong><br \/>The Converting Company shall publish a notice in Form INC 26 at its own expense within a week from the date of an application made. The notice shall be published in one vernacular newspaper in the principal the district in which the\u00a0registered office\u00a0of the proposed company is to be situated or is situated and one in English newspaper in the district and on the websites as may be notified by the Central government;<br \/>The copy of the above notice published shall also file with Registrar immediately after the publication.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\"><strong>Issue of License by Registrar<\/strong><br \/>Registrar could raise the applicant to furnish the approval or concurrence of the other Authority, Regulatory Body and department of Ministry of CG or SG.<br \/>The Registrar after considering the objections, if any, received within 30 days from the date of publication of notice and after consulting any authority, regulatory body, Department or Ministry of the CG and SG, as it may decide whether the license shall or shall not grant.<br \/>The license shall be in form INC-16 or from INC-17. The Registrar may direct the company to insert in its memorandum, or in its articles, or partly in one or partly in the other, such conditions of the license as may be specified by Registrar.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h3><strong>Conclusion<\/strong><\/h3>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">In a nutshell, a\u00a0Section 8 Company\u00a0is formed with the\u00a0primary aim\u00a0of charity. Further, these companies enjoy all the benefits, privileges, deductions, and exemptions as specified in the\u00a0<a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\" target=\"_blank\" rel=\"noopener\">Companies Act 2013<\/a>.<\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">So, to avail off such privileges, exemptions, deductions, and benefits, a\u00a0Private Limited Company\u00a0decides to go for Conversion.<\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">However, the process to Convert a Private Company into Section 8 Company is a back-breaking and lengthy task. We at\u00a0Legal Window have a team of skilful and competent professionals who will assist you in the process to Convert a Private Company into Section 8 Company.<\/p>\r\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&hellip;<\/p>\n","protected":false},"author":5,"featured_media":100990,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-100988","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to convert Private Company into a Section 8 Company?<\/title>\n<meta name=\"description\" content=\"Read about How to convert private company into a section 8 company. 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