Closing a Section 8 Company

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.

These companies often find it difficult to shut down the company as this company is having the license to operate as Charitable Company it is required to surrender that license by converting the company into a normal company other than a Section 8 Company.

Mandatory Documents:

1. Certified true copy of the special resolution along with a copy of the Notice convening the meeting including the explanatory statement;

2. Memorandum of association;

3. Articles of association;

4. Certified true copy of board resolution(s) authorizing conversion;

5. 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;

6. Certificate from CA/CS/CWA (in practice) certifying that the conditions laid down in the Act and rules, have been complied with;

7. 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;

8. Copy of valuation report by a registered valuer about the market value of assets;

9. 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;

10. NOC from all the creditors is mandatory, if any;

11. A declaration by the directors that the conditions, if any imposed by the Regional Director have been fully complied with.

Optional Documents:

1. Statement of financial position if applicable;

2. Full details of fixed assets alienated if any, during the preceding three financial years;

3. Written consent of the lenders is mandatory if any loan is outstanding;

4. NOC from the concerned authority in case special status is mandatory when the company has obtained any special status/ privilege;

5. Proof of payment of differential amount is mandatory if the company has acquired any immovable property through lease or otherwise from any Government or authority or body corporate or person since incorporation at concessional rate or free of cost;

6. Details of donation/grant/benefit received since incorporation of company is mandatory if company has received any donation and/or grant/benefits from any person or authority since incorporation.