Procedure to Close the Section 8 Company:
Section 8 Company is named Section 8 of the Companies Act, 2013, which pertains to established 'for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any such other object', provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members. Therefore, Section 8 Company or Section 25 Company is a company registered under the Companies Act, 2013 for charitable or not-for-profit purposes.A Section 8 Company is similar to a Trust or Society; expect, a section 8 Company is registered under the Central Government's Ministry of Corporate Affairs.
Want to shutdown the Section 8/Section 25 company ? Here is the procedure
Promoters engaged in the business not for profit ideally go for registering a company under Section 8 of the Companies Act, 2013. Once a company is registered under Section 8 either as a public or private such company is free from not using the words private limited or public limited after the key word of the company. A partnership firm can also become a member of Section 8 Company.
Companies registered under Section 8 can close their company by surrendering their license to operate as a charitable company. Such license can be surrendered by converting the company into a normal company other than a Section 8 company.
unlike other companies, upon the winding up of a Section 8 company, the assets of the same are not transferred to the management or the shareholders of the company. The assets of the Section 8 company are merged with another Section 8 company.
Reasons to Winding Up of a Company
A company is a legal entity and a juristic person established created under the Companies Act. Therefore, a company is required to maintain regular compliance throughout its lifecycle. Winding up process can be to close a company that is not active and avoid compliance responsibilities.
Fast to Close
A company can also be closed by filing an application with the MCA in about 3 to 6 months. The entire process can be completed online. Hence, the process for closing a company is fast and easy in India through IndiaFilings.
A company that doesn't file its compliance on time incurs fines and penalty including debarment of the Directors from starting another Company. Hence, it is better to officially wind up a company that is inactive and avoid potential fines or liabilities in the future.
When compared to maintaining compliance for a dormant company, it might actually be cheaper to wind up a company and incorporate again when the time is right. IndiaFilings can help you wind up a company.
Certified true copy of the special resolution along with a copy of the Notice convening the meeting including the explanatory statement;
Memorandum of association;
Articles of association;
Certified true copy of board resolution(s) authorizing conversion;
Certified true copy of the special resolution passed for approval for conversion into any other kind and notice convening the general meeting along with the relevant explanatory statement annexed thereto;
Certificate from CA/CS/CWA (in practice) certifying that the conditions laid down in the Act and rules, have been complied with;
Statement of assets and liabilities of the company as on the date not earlier than thirty days of that date duly certified by the auditor;
Copy of valuation report by a registered valuer about the market value of assets;
Audited financial statements, the Board’s reports, annual returns and the audit reports for each of the two financial years immediately preceding the date of the application or, where the company has functioned only for one financial year, for such year;
NOC from all the creditors is mandatory, if any;
A declaration by the directors that the conditions, if any imposed by the Regional Director have been fully complied with.
ProcHold a gathering of its Board of executives to consider and favor the proposition for transformation
2. Hold general gathering and have the previously mentioned extraordinary resolution passed.
3. The illustrative articulation attached to the notice assembling the general gathering will set out in detail the explanations behind choosing such change including the accompanying, to be specific:-
a) The date of consolidation of the organization;
b) The chief objects of the organization as set out in the notice of affiliation;
c) The reasons with respect to why the exercises for accomplishing the objects of the organization can't be carried on in the present structure for example as an area 8 organization;
d) If the head or principle objects of the organization are proposed to be changed, what might be the modified articles and the explanations behind the modification;
e) what are the benefits or concessions right now delighted in by the organization, for example, charge exclusions, endorsements for getting gifts or commitments including remote commitments, land and other resolute properties, assuming any, that were gained by the organization at concessional rates or costs or unwarrantedly and, provided that this is true, the market costs pervasive at the hour of obtaining and the value that was paid by the organization, subtleties of any gifts or inheritances got by the organization with conditions joined to their use and so forth.
f) Details of effect of the proposed transformation on the individuals from the organization including subtleties of any advantages that may accumulate to the individuals because of the change.
4. Notice together with a duplicate of the application and all connections by enlisted post or hand conveyance at the same time with its distribution edure to Close the Section 8 Company:
Documenting of Form MGT 14 with copy of resolution alongside explanatory statement under Section 102 and changed copy of Articles of Association as attachment. Within 30 days of going of the uncommon goals
6. Filing of Form GNL 1 with the Registrar
7. Filing of Form INC 18 with the Regional Director
8. Publication of Notice and the said notice will be in Form INC 19 in:
a) in any event once in a vernacular paper in the chief vernacular language of the area wherein the enlisted office of the organization is arranged, and having a wide dissemination in that locale, and in any event once in English language in an English paper having a wide flow in that region; and
b) On the site of the organization, assuming any, and as might be told or coordinated by the Central Government Inside seven days from the date of presenting the application to the Regional Director
9. Declaration such that no segment of the salary or property of the organization has been or will be paid or moved straightforwardly or by implication by method for profit or reward or generally to people who are or have been individuals from the organization or to any at least one of them or to any people guaranteeing through any at least one of them.
10. Whether the organization has gotten any exceptional status, benefit, exclusion, advantage or grant(s) from any position, for example, Income Tax Department, Charity Commissioner or any association or Department of Central Government, State Government, Municipal Body or any perceived authority? If Yes then a "No Objection Certificate" must be acquired, whenever required under the conditions of the said exceptional status, benefit, exclusion, advantage or grant(s) from the concerned authority and documented with the Regional Director, alongside the application.
11. Whether the Company have documented all its fiscal reports and Annual Returns up to the money related year
going before the accommodation of the application to the Regional Director and every single other return required to be documented under the Act up to the date of presenting the application to the Regional Director?
In the occasion the application is made after the expiry of a quarter of a year from the date of going before money related year to which the fiscal summary has been recorded, an announcement of the budgetary position appropriately confirmed by sanctioned bookkeeper made up to a date not going before thirty days of documenting the application will be joined.
12. Check whether an endorsement from rehearsing Chartered Accountant or Company Secretary practically speaking or Cost Accountant by and by affirming that the conditions set down in the Act and these standards identifying with change of an organization enrolled under segment 8 into some other sort of organization, have been conformed to has gotten?
13. On receipt of the endorsement of the Regional Director, File Form INC 20. Within 30 days from the date of receipt of the request.