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Brief Introduction:

In today’s era, we all must have heard the term ‘Section 8 Companies’ which are a categorized as Non-Profit Organizations (NPOs) or Non-Governmental Organizations (NGOs).

The Companies Act, 2013 defines a Section 8 Company as one whose objectives is to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such similar objects.

A Section 8 Company could be classified as Private Company limited by shares or limited by guarantee Or Public Company limited by shares or limited by guarantee.

Sub-Section (4)(ii) of Section 8 of the Companies Act, 2013 provides that a Section 8 Company may convert itself into a Company of any kind only after complying with certain conditions as prescribed in the Act.

Let us understand the procedure of conversion of Section 8 Company into Private Limited Company:

In order to convert a Section 8 Company into a Private Limited Company, the provisions of Rule 21, 22 and 23 of the Companies (Incorporation) Rules, 2014 has to be complied with. The step by step procedure for such conversion are as follows:

1. Issuance of notice along with agenda and notes to agenda for holding Board Meeting by the Section 8 Company;

2. Holding Board Meeting for approval of such conversion and issuance of notice of General Meeting;

3. Convening a General Meeting-

The Section 8 company shall pass a special resolution at a general meeting for approval of such conversion.

Information to be set out in the explanatory statement annexed to the notice convening the general meeting are as follows:

  • Date of Incorporation of the company;
  • Principal objects of the company as set out in the memorandum of association;
  • Reasons as to why the activities for achieving the objects of the company cannot be carried on as a section 8 company;
  • If the principal or main objects of the company are proposed to be altered, what would be the altered objects and the reasons for the alteration
  • What are the privileges or concessions currently enjoyed by the company (such as tax exemptions, approvals for receiving donations or contributions including foreign contributions, land and other immovable properties, if any, that were acquired by the company at concessional rates or prices and, if so, the market prices prevalent at the time of acquisition and the price that was paid by the company, details of any donations or bequests received by the company with conditions attached to their utilization )
  • Details of impact of the proposed conversion on the members of the company including details of any benefits that may accrue to the members as a result of the conversion.
  • Detailed reason for conversion

4. Filing e-form MGT 14:

A certified true copy of the special resolution along with a copy of the Notice convening the meeting including the explanatory statement shall be filed with the Registrar in Form No.MGT.14 along with the fee.

5. Filing of Form INC 18:

The company shall file an application in Form No.INC.18 with the Regional Director  with fees.

Information/Documents to be attached with the form no. INC 18:

  • Licence number issued to the Company under Section 8;
  • Memorandum of Association;
  • Articles of Association;
  • Copy of Board Resolution;
  • Copy of the special resolution passed and notice of convening the general meeting along with the relevant explanatory statement;
  • Certificate from CA/CS/ICWA (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 30 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, Board’s report, annual returns and the Audit reports of each of the two financial years immediately preceding the date of the application;
  • Statement of financial position;
  • Full details of fixed assets alienated, if any, during the preceding three FYs;
  • Written consent of lenders, if any loan is outstanding;
  • No objection certificate from all the creditors
  • Details of donation/grant/benefit received since incorporation of the company;
  • Proof of serving of the notice served to all authorities mentioned in sub-rule (2) of rule

Conversion of Section 8 Company into a Private Limited Company

Reproduced sub rule (2) of rule 22 for quick reference:

“The company shall send a copy of the notice, simultaneously with its publication, together with a copy of the application and all attachments by registered post or hand delivery, to the Chief Commissioner of Income Tax having jurisdiction over the company, Income Tax Officer who has jurisdiction over the company, the Charity Commissioner, the Chief Secretary of the State in which the registered office of the company is situated, any organisation or Department of the Central Government or State Government or other authority under whose jurisdiction the company has been operating and if any of these authorities wish to make any representation to Regional Director, it shall do so within sixty days of the receipt of the notice, after giving an opportunity to the Company.”

Note: A copy of the application with annexures as filed with the Regional   Director shall also be filed with the Registrar of Companies in e-form GNL 2.


The Section 8 company shall, within a week from the date of submitting the application to the Regional Director in form INC 18 shall publish an advertisement at its own expense in Form No INC 19 and a copy of the notice, as published, shall be sent forthwith to the Regional Director.

Advertisement shall be published at least once in a vernacular newspaper in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district and shall also be published on the website of the company, if any.

7. Post Approval of Regional Director:

The Company shall convene a general meeting of its members to pass a special resolution for amending its memorandum of association and articles of association as required under the Act consequent to the conversion of the section 8 company into a private limited company.

8. Filing of Form INC 20:

The company shall file with the Registrar-

  • a certified copy of the approval of the Regional Director within thirty days from the date of receipt of the order in Form INC 20 along with the fee
  • amended memorandum of association and articles of association of the
  • a declaration by the directors that the conditions, if any imposed by the Regional Director have been fully complied

The Registrar shall register the documents and issue the fresh Certificate of Incorporation (COI).


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July 2024