Provision under section 8: Incorporation of company with charitable object.

Introduction

 

Here in this article we will find the rules and regulations for incorporating a company with charitable object.
There are two rules applicable for incorporation of a company under section 8.

Rule -19 and rule-20 of company (incorporation) rules, 2014

Rule-19:- License for new company

1. A  person or a Association of person who want to incorporate a company under section 8 with limited liability without addition of the word “limited” or “private limited ” has to make an application in form no. INC 12 along with the fee to the registrar.
2. Along with the application, the following documents should be given to the registrar- 
   • A draft memorandum and Article of association of the propose company.
   • A declaration in form no. INC 14 by an advocate or charted accountant or cost accountant or a company secretary in practice that the draft memorandum and articles of association meet all the requirement of the law.
   • An estimation of the future annual income and expenditure for the next 3 years specifying the source of income and the object of expenditure.
   • A declaration by each of the person who are making application in form no. INC 15
3. The memorandum and article of association of the proposed company should be in form no. INC 13.

 

Rule-20:- License for existing company

1. An existing company having charitable object which is desirous of being registered under section 8 without addition of “limited” or “private limited” shall make a application in form no. INC 12 to the registrar along with the fee.
2. Along with the application the following document should be submitted to the registrar-
   • The memorandum and article of association.
   • A declaration in form no. INC 14 by an advocate or charted accountant or cost accountant or a company secretary in practice that the memorandum and articles of association meet all the requirement of the law.
   • For each of 2 financial years immediately preceding to the date of application or when the company has functioned only for one financial year, the company has to submit the following document –The financial report, the board report, the audit report of the exiting company.
   
   
   
   
   • A statement showing the detail of the Assets (with present value) and liabilities of the company as on the date of application or within thirty days preceding that date.
   • An estimation of the future annual income and expenditure for the next 3 years specifying the source of income and the object of expenditure.
   • The certified copy of the resolution passed in general/board meeting approval.
   • A declaration of each person making the application in form no. INC 15.
3. Within a week from the application, the company has to publish a notice and send it to the registrar in form no. INC 26 and shall published at least in any vernacular newspaper with any vernacular language and at least in English newspaper with English language in the district in which the registered office is located.
4. By doing all the approvals and considering the entire objection, the registrar will decide in its discretion whether the license should or should not grant.
5. The registrar may put any condition which is necessary for the situation and may direct the company to insert any condition in memorandum and article of association.