The Tax Publishers

Companies Act, 2013

Obtaining a License Under Section 8Procedural Aspects

Pragya Bhandari

In this write-up, an attempt is made to delineate the provisions regarding procedure for obtaining the license by the proposed as well as the existing company desirous of being incorporated and/or registered as a non-profit making company under section 8 read with rules 19 and 20 of Companies (Incorporation) Rules, 2014.

1. Prologue

Section 8 company is a company for charitable or other public utility purposes. It can be formed as a public or a private company with limited liability, for the purpose of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object and at the same time should apply its profits, if any, in promoting its objects and should prohibit the payment of any dividend to its members. Section 8 empowers the Registrar of Companies to register a special type of company as limited company, upon issuance of license, without addition to name of the word Limited or the words Private Limitedunder section 8. The effect of registration will be that it shall enjoy all the advantages of incorporation as enjoyed by such bodies and yet, it is free from indicating through its name that it is incorporated with limited liability. Several exemptions, modifications and restrictions are provided to such type of companies.

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