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Minimum Requirement to form Section 8 Company
About Section 8 Company
To incorporate a Section 8 Company, an application shall be made to the Registrar of Companies in Form no. INC.12, which shall be accompanied, inter alia, by the following documents:
i. Draft Memorandum of Association (MOA) and Articles of association (AOA) of the Company in prescribed format where the photographs of subscribers are affixed.
ii. A Declaration is to be attached in Form no. INC-14 (on the stamp paper, duly notarized) by an Advocate, a Chartered Accountant, Cost Accountant or Company Secretary in practice, that the draft memorandum and articles of association have been drawn up in conformity with the provisions of section 8 and rules made there under and all the requirements under section 8 have been complied with. iii. An estimate of the future annual income and expenditure of the company for next three years, specifying the sources of the income and the objects of the expenditure. iv. A declaration (in Form no. INC-15) on stamp paper duly notarized by each of the persons making the application and v. Form no. INC-9 from each subscribers and first directors, on appropriate stamp paper of the State and duly notarized.
There are special requirements to be complied with under the Foreign Contribution and Regulation Act, 2010 before a Section 8 Company can receive any contributions or donations from overseas/outside India from non-residents. The provisions of the said Act are in addition to the provisions under the Companies Act.
A Section 8 Company can alter the provisions of its Memorandum or articles by passing a special resolution, however such alteration requires the approval of the Registrar of Companies [vide MCA notification dated 21st May, 2014].
Further, if alteration in Memorandum or Articles results in conversion of Section 8 Company to any other kind of company, prior approval of Central Government is required. Such power is delegated to Regional Director [vide MCA notification dated 21st May, 2014].
Yes, section 8 company can promote another company and be a holding company of another company.
Yes, a Section 8 Company can be converted into any other company including OPC as prescribed under Section 8(4)(ii) read with Rules 21 and 22 of Companies (Incorporation) Rules, 2014. This is further subject to restrictions and compliances as per other applicable laws including Income tax Act, 1961.
Yes, the objects of Section 8 Company can be altered by taking shareholders’ approval and approval of Registrar of Companies in terms of Section 8.
There is no restriction on borrowing by Section 8 Company. However, provisions of section 180, if applicable, required to be complied with.