{"id":107271,"date":"2022-04-09T18:12:55","date_gmt":"2022-04-09T12:42:55","guid":{"rendered":"https:\/\/legalwindow.in\/?p=107271"},"modified":"2023-01-02T11:36:16","modified_gmt":"2023-01-02T06:06:16","slug":"procedure-to-convert-section-8-company-into-a-private-limited-company","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/procedure-to-convert-section-8-company-into-a-private-limited-company\/","title":{"rendered":"Procedure to Convert Section 8 Company into a Private Limited Company"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-107273\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Procedure-to-Convert-Section-8-Company-into-a-Private-Limited-Company-1.png\" alt=\"Procedure to Convert Section 8 Company into a Private Limited Company \" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Procedure-to-Convert-Section-8-Company-into-a-Private-Limited-Company-1.png 1200w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Procedure-to-Convert-Section-8-Company-into-a-Private-Limited-Company-1-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Procedure-to-Convert-Section-8-Company-into-a-Private-Limited-Company-1-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Procedure-to-Convert-Section-8-Company-into-a-Private-Limited-Company-1-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Procedure-to-Convert-Section-8-Company-into-a-Private-Limited-Company-1-768x403.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">The notion of non-profit corporations is present under Section 8 of the <\/span><span style=\"font-weight: 400;\">Companies Act, 2013<\/span><span style=\"font-weight: 400;\">. Non-Profit Corporations are not a new concept in our nation, India. Profits from Non-Profit Corporations are subject to reinvestment in society&#8217;s benefit and progress. Furthermore, under Section 8(4) (ii) of the Companies Act, 2013, a conversion of <\/span><a href=\"https:\/\/legalwindow.in\/section-8-company-npo\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Section 8 Company<\/span><\/a><span style=\"font-weight: 400;\"> can take place into any other type of company. Let us discuss about Procedure to Convert Section 8 Company into a <\/span><a href=\"https:\/\/legalwindow.in\/private-limited-company\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Private Limited Company<\/span><\/a><span style=\"font-weight: 400;\"> in detail.<\/span><\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"border: 1px solid #555;\"><b>Table of Content<\/b><\/p>\n<ul>\n<li><a href=\"#Section\">Section 8 Company<\/a><\/li>\n<li><a href=\"#Applicable\">Applicable Legal Provisions<\/a><\/li>\n<li><a href=\"#Conditions\">Conditions Prevalent<\/a><\/li>\n<li><a href=\"#Conversion\">Conversion of a Section 8 Company into a Private Company<\/a><\/li>\n<li><a href=\"#Consequences\">Consequences of Conversion<\/a><\/li>\n<li><a href=\"#Takeaway\">Takeaway<\/a><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"Section\"><b>Section 8 Company\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Non-Government or <a href=\"https:\/\/legalwindow.in\/ngo-registration\/\" target=\"_blank\" rel=\"noopener\">Non-Profit Organizations<\/a><\/span><span style=\"font-weight: 400;\"> are corporations that have registration under Section 8 of the Companies Act, 2013. Section 8 corporations come with the goal of promoting trade, business, art, science, sports, education, research, religion, social welfare, environmental protection, or other similar goals. Any earnings made are used towards the company&#8217;s goals; hence no dividends are distributed to the shareholders. In addition, the Companies Act of 2013 governs Section 8 companies in India.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Section 8(4)(ii) of the Companies Act 2013 states that a Section 8 business can change itself into any other company after meeting the Act&#8217;s requirements.<\/span><\/p>\n<h2 id=\"Applicable\"><b>Applicable Legal Provisions<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The following are the legal provisions that apply to the conversion of a Section 8 corporation into a private corporation:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Companies Act,\u00a02013 &#8211; Section 8<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rule 21 under Companies Incorporation Rules, 2014<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Companies Incorporation Rules, 2014<\/span><span style=\"font-weight: 400;\"> &#8211;\u00a0Rule 22<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rule &#8211; 23 The Companies Incorporation Rules, 2014<\/span><\/li>\n<\/ul>\n<h2 id=\"Conditions\"><b>Conditions Prevalent<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The following are the requirements for converting a Section 8 company into any other type of company under Rule 21, 22, and 23 of the Companies (Incorporation) Rules 2014.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At a general meeting of the company&#8217;s members, the company must approve a Special Resolution approving the conversion:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>Submission of Statement : <\/b>Within 30 days of passing the resolution, a certified genuine copy of the resolution and notice of General Meeting, coupled with an explanatory statement, must be filed with the ROC (Registrar of Companies) in form MGT-14.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>No Objection Certificate : <\/b>If a corporation has gained special status or privilege, it must notify and get a &#8220;No Objection Certificate&#8221; from authorities such as the IT Department, Charity Commissioner, Central or State government department, Municipal body, or any other recognized authority.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Submission of Application to Regional Director: <\/b>For its conversion to any other type of company, the current Section 8 Company shall submit an application to the Regional Director in Form INC 18 with a copy to the Registrar of Companies.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Filing of Financial Statement: <\/b>The firm must file the applicable Financial Statements, Annual Returns, and other Returns with the Regional Director up to the preceding year of filing the application. If an application is made after three months have passed since the last day of the financial year for which a financial statement has been filed, a statement of financial status officially authorized by a Chartered Accountant up to the date of the application must be included.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Declaration: <\/b>The Board of Directors shall provide a declaration stating that no portion of the Company&#8217;s property or revenue has been directly or indirectly transferred or paid as a bonus or dividend to people or members of the Company, or claiming via any one or more of them.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Grant of Certificate: <\/b>In addition to the application, the Business must provide a Certificate from a Practicing CA\/CS\/CMA attesting to the fact that all of the Act&#8217;s prerequisites for the conversion of a Section 8 company are already done.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Publishing of Notice: <\/b>The applicant must print a notice in the press at his own expense within 7 days after submitting his application to the Regional Director. After publication, a copy of such notices must be move to the Regional Director in Form INC 19.<\/li>\n<\/ul>\n<p><b>Notice of Authenticity<\/b><\/p>\n<p><span style=\"font-weight: 400;\">At the same time, proof of service of the notice must be given to the following authorities through registered mail or hand delivery:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Income Tax Officer or the Chief Commissioner of Income Tax in charge of the Company.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">\u00a0Commissioner for Charities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Chief Secretary of the State in which the Company&#8217;s registered office is located.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The department of the federal or state government under whose authority the Company operates.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The aforementioned authorities have 60 days from the date of receipt of the notification to make any representations to the Regional Director.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Regional Director has the authority to approve the application for conversion of a Section 8 business to any other type of company, subject to all terms and restrictions in effect at the time of conversion.<\/span><\/p>\n<h2 id=\"Conversion\"><b>Conversion of a Section 8 Company into a Private Company<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The following is the method for converting a Section 8 corporation into a private corporation:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>In the General Meeting, pass a Special Resolution: <\/b>As per Rule 21 of the Companies (Incorporation) Rules, 2014, the Company must approve the Conversion by a special resolution. The Registrar of Companies shall receive a genuine certified copy of the Special Resolution as well as the Explanatory Statement (RoC). Within 30 days after the Special Resolution&#8217;s passage, a copy of the Special Resolution, as well as the Notice to Convene General Meeting, shall fill in Form MGT-14.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Submission to the Regional Director: <\/b>The Company must file an application with the Regional Director as per Rule 21 of the Companies (Incorporation) Rules, 2014. Submission of an application takes place under Form INC-18, together with the appropriate fee.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Advertisement in the Newspaper: <\/b>The Company shall issue a notice in the media for the Conversion of Section 8 Company into Private Company. This can take place after submitting an application to the Regional Director. Within a week of submitting an application to the Regional Director, the application may get its publication in the newspaper.<br \/>\nThe Regional Director should receive a copy of the Notice issued in Form INC-19.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Certificate of Incorporation: <\/b>The Registrar of Companies will provide an Incorporation Certificate to the applicant upon submission of the requisite paperwork. After the withdrawal of the Company&#8217;s Section-8 Company license; the Company can file Form INC-20 with the Registrar of Companies to request a conversion of its status and name.<\/li>\n<\/ul>\n<h2 id=\"Consequences\"><b>Consequences of Conversion<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Certain restrictions may be imposed by the Regional Director (RD) after the completion of all conditions. Moreover, he may issue an order for acceptance of the application for the Conversion of Section-8 Company into a Private Company.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As per Rule 22 of the Companies (Incorporation) Rules, 2014 the following are the conditions set by the Regional Director:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Company cannot claim the same benefits and exemptions after Conversion. Further, as it had when it have registration under Section 8 of the Companies Act, 2013.<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the Company purchased any immovable property from the government at a lower rate than the market price; then newly formed Private Company must pay the difference between the market price and the lower rate.<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Company has some unutilized revenue, and accrued gains from the previous year; Moreover, it should be utilizes to pay off existing debts or any amounts to suppliers or creditors.<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If there is any money left over after paying all the bills; its deposition shall be submit to the Investor Education &amp; Protection Fund. The funds may be transfer within 30 days of the Section 8 Company&#8217;s conversion to a <a href=\"https:\/\/legalwindow.in\/private-limited-company\/\" target=\"_blank\" rel=\"noopener\">private company<\/a>.<\/span><\/li>\n<\/ul>\n<h2><a href=\"https:\/\/legalwindow.in\/section-8-company-npo\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-111613 size-full\" title=\"Register your Section-8 Company \u20b9 12,000\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/register-your-section-8-company-12000.png\" alt=\"\" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/register-your-section-8-company-12000.png 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/register-your-section-8-company-12000-600x120.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/register-your-section-8-company-12000-300x60.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/register-your-section-8-company-12000-768x154.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/h2>\n<h2 id=\"Takeaway\"><b>Takeaway<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">As per the<a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\" target=\"_blank\" rel=\"noopener\"> Companies Act, 2013<\/a> under Section 8 the conversion of any company into any other type of company takes place. When there is no method to attain the aim within the present structure of the company, companies turn to conversion. Moreover, the Companies Act 2013 governs the conversion of a Section 8 corporation into a private corporation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Furthermore, the major cause for conversion is that businesses are unable to achieve their targeted goals within their current Organizational structure. Furthermore, converting a Section 8 corporation to a private corporation is a time-consuming and complex procedure that requires professional guidance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Our <\/span><span style=\"font-weight: 400;\">experts<\/span><span style=\"font-weight: 400;\"> will guide you through the conversion process and ensure that your job took place flawlessly.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The notion of non-profit corporations is present under Section 8 of the Companies Act, 2013. Non-Profit Corporations are not a new concept in our nation, India. Profits from&hellip;<\/p>\n","protected":false},"author":5,"featured_media":107274,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[],"class_list":["post-107271","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-compliance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Procedure to Convert Section 8 Company into a Private Limited Company<\/title>\n<meta name=\"description\" content=\"Procedure to Convert Section 8 Company into a Private Limited Company. 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