Process of Strike off Section 8 Companies | Corpbiz

Описание: Section 8 companies is established to promote art, commerce, sports, science, education, social welfare, charity, religion, protection of natural resources, or any such other object. Such companies are obligated to allocate their profit to serve the said objects only. The concept of dividend distribution among members does not work in Section 8 Company. The overall business affairs of section 8 companies revolve around charitable goals. Section 8 companies fall under the Companies Act, 2013, and it is identical to trust and society. Section 8 company is ideal for promoters seeking to serve charitable intentions. Such companies cannot use a term like private limited or public limited in their name as it is prohibited under the governing Act.

Why voluntary strike off is not available to Section 8 companies?

Unlike other registered companies, a Section 8 entity does not have a straightforward procedure for shutting down their business operations. To serve this objective, first, they need to convert into a normal company and then surrender their license before the governing authority. The requirements have been cited under the governing legislation.

Reasons to strike off Section 8 Companies

Conditions under which #strikeoff route can be opted by the #Section8Company;The company has failed to undertake its operation within one year of its incorporation.The company has remained non-operational for the preceding two financial years and has failed to seek for the status of Dormant Company u/s 455 of the Act.The object of Section 8 Company has been changed, and the company is finding it hard to align with it.

Procedure to strike off section 8 companies

As mentioned earlier, Section 8 companies do not have a standard procedure to close their business affairs. Strike off section 8 companies Only Come To An Effect After The Following The Given Procedure

1. Application with MCA for Conversion Company conversion is the first step in the strike off procedure. To serve this purpose, the applicant firm needs to submit a prescribed application with the Ministry of Corporate Affairs along with the documents mentioned above.

2. Application and Documentation scrutiny Upon receiving the application and documents, the said authority shall make some legal checks against the rules mentioned under the governing legislation.

3. Approval by MCA for conversionIf the authority does not find any errors or discrepancies during the verification, they will grant their approval for conversion to the applicant firm.

4. Application for Strike off the private limited company as converted In this step, the applicant can address the formalities for striking off the company name. For this, they are required to file the prescribed application with the Ministry of Corporate Affairs along with standard documentation and standard fees.

5. Approval for Strike offApproval for Strike off shall be granted by the authority after making in-depth verification of the submitted application and supported documents.

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