Relaxation in Compliance Norms of Section 8 Company

This article concentrates on the relaxations given by the Ministry of Corporate Affairs, vested upon Section 8 Company under Company Law according to Companies Act,2013.

Eligibility for Section 8 Company:

1. It should propose to prohibit the payment of dividends among its members as subject to Central Government approval.
2. It should intend to apply its profits or other income for promoting its objectives.
3. It promotes commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any such related objectives.

 Exemptions:

• Company Secretary: As mentioned in the Company Act,2013 Section 2 Company has been done away with so to appoint a Company Secretary. As it is not mandatory for a Section 8 companies.

• Capital requirements: Section 8 Company has done away with the company incorporation of LLP were Rs 5 lakhs and the same requirement amount for registration of a company under the company norms and law. As we know the working of a non-profit company can strongly be affected due to such amendment, all capital constraints are exempted and have become very useful.
• Annual General Meeting: Companies require a notice of 21 days which now reduces to having only 14 days u/s 101

           (1). Also, there is no requirement to follow Section 96

           (2) which had rules for time/place/restrictions on AGM.

            However, the minutes of the meeting is not necessary to be as per Section 118 provisions.

• Directors: Independent directors (Section 150) are required to take a necessary place. Section 8 companies under company norms do not require holding the first meeting of the board within 30 days of incorporation of the company under the company law. However, a meeting of the directors will still be necessary once every six months.
• Board Meetings: Other companies that need board meetings at least 4 times in a year (Section 173). But Section 8 company, under the company law, can meet in 6 months in a year i.e. only 2 times.

How can we help you?

Online Legal India™ expert team of highly qualified CA/CS will guide you through the rest of the process for Section 8 Company Registration. We are economical and give budgeted services for ones who are willing to start a company/business or any other kind of organization require Registration/ Licence.

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