Under section 8, a licence given by central government to a company, formed for non-profit motive.
Procedure for incorporating a non-profit company:
Acceptance of these basic conditions:
(a) Object of company is to promote art, science, commerce, sports, charity, social welfare, religion and protection of environment.
(b) Profit or other income shall be used in promotion of the object.
(c) Payment of dividend to members is prohibited.
2. Application shall be made to the central government.
3. Central Government, if satisfied will issue a licence.
4. After that, an application shall be made to the registrar of companies, along with the documents,
(a) Memorandum of Association,
(b) Article of Association,
(c) Declaration that the company have been accepted all the requirements of this act, in prescribed form by Cost Accountant, Chartered Accountant, Company Secretary and an Advocate .
(d) Estimated income & expenses for the next 3 years.
5. Registrar of Companies shall register the documents and shall issue a certificate of incorporation.
[Section 8(6)] Revocation of licence
Central Government, may revoke the licence granted to the companies registered under section 8:
If the company break any of the requirement of Section 8,
If the company break any of the conditions for which licence is issued,
In case fraudulent affairs of the company or violation of the objective of the company,
Company has acted against the public interest.
Central Government may also direct the order:
For continuance of the company,
For discontinuance of the company.
1. In case of continuance of the company:
Central Government direct the company to convert its status into 'private' or 'public' company and to add 'Ltd.' or 'Private Ltd." as the case may be, to his name. Central Government will not passed such order without giving opportunity of being heard to the company.
2. If Central government wants to discontinue the Section 8 company, in that case:
(a) Central Government may order for amalgamation of company, or
(b) Central Government may order for winding up of the company.
(a) In case of amalgamation:
When Central Government revoked the licence and is also satisfied that company worked in public interest, then Central Government can give order for amalgamation with another company having similar object and registered under Section 8, in order to form a single company.
(b) In case of winding up:
When Central Government revoke the licence, Central Government has the option of winding up of the company, in case of winding up or dissolution, after settlement of all debts and liabilities and realisation of assets, surplus money (if any), may be transferred to another company registered under section 8, having same objective or credited to Rehabilitation and insolvency fund formed under Section 269.
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