Procedure for Incorporation of Section 8 Company for charitable purposes.

Section 8 Procedure for Incorporation of Section 8 Company for charitable purposes.

Step 1

Obtain Director Identification Number (DIN) and Digital Signature

A company needs to have a minimum of two Directors and to make the application for ascertaining availability of name; Director Identification Numbers of at least 2 Directors are required. If the proposed Directors do not have DIN, then apply their DIN and obtain Digital Signatures.

Step 2

Name Availability for Proposed Company

An application for the reservation of a name has to be filed with Registrar of Companies in Form INC.1 along with the prescribed fee of Rs. 1000/-. After approval of form INC.1, the same shall be reserved for a period of 60 days. See Rule 8 of Companies (Incorporation) Rules, 2014 before making an application to ensure that the name being applied is not undesirable.

Step 3

Drafting of Memorandum of Association (MOA) and Article of Association (AOA)

Draft Memorandum and Articles of Association of the proposed company. The formats of MOA and AOA are given in Schedule I to the Companies Act 2013. The MOA and AOA have to be signed by the subscribers indicating the number of shares to be subscribed by each of them against their names in the MOA. The Articles of Association also mentions the names of the First Directors of the Company.

The Memorandum of Association (MOA) of the Company should be in form INC 13.

Step 4

Application for License under Section 8 of the Companies Act 2013.

An Application for License under Section 8 shall be filed in form INC 12 with following attachments-

Ø  Draft Memorandum of Association (MOA) in form INC 13;

Ø  Draft Articles of Association (AOA) ;

Ø  Declaration in Form INC. 14 by an Advocate/Chartered Accountant/Cost Accountant/Company Secretary in practice, that the draft memorandum and articles of association have been drawn up in conformity with the provisions of section 8 and rules made there under and all the requirements under section 8 have been complied with;

Ø  A declaration in Form INC. 15 by each of the persons making the application;

Ø  Brief profile of all the promoters.

Ø  Grounds of Application.

Ø  An estimate of the future annual income and expenditure of the company for next three years, specifying the sources of the income and the objects of the expenditure.

Step 5

Give notice in newspapers

Publish a notice within a week from the date of making the application to the Registrar of Companies in at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the proposed company is to be situated, and circulating in that district, and at least once in English language in an English newspaper circulating in that district; and on the websites of the Company.

Step 6

Approval of other authorities

The Registrar of Companies may require the applicant to furnish the approval or concurrence of any appropriate authority, regulatory body, department or Ministry of the Central or State Government.

Step 7

To decide on granting of license under section 8

The Registrar will wait for 30 days for objections, if any, of any person pursuant to notice published in newspapers. The Registrar may also consult necessary authorities.
Thereafter, the Registrar of Companies at its discretion may grant the license with such conditions as deemed necessary by the Registrar.

The Registrar may direct the company to insert in its memorandum, or in its articles, or partly in one and partly in the other, such conditions of the license as may be specified by the Registrar in this behalf.

Step 8

Registration of Company

The following forms and documents have to be filed with Registrar of Companies for registration.

1. An application for registration of the Company is to be filed with the Registrar of Companies in form INC 7 (for tutorial of form click here). The following documents will be attached with the forms.

a.    Memorandum of Association (MOA) and Articles of Association (AOA) duly signed by all the subscribers.

b.    Identity and address proof of all subscribers along with particulars of name, father’s name, Nationality, Date of Birth, Place of Birth, Educational Qualification, Occupation, PAN, Address, email, phone no. and Fax.

c.    A declaration in form INC 8 by an advocate, Chartered Accountant, Cost accountant or Company Secretary in practice who is engaged in incorporation and a person named in as Director,Manager or Secretary that all requirements related to incorporation has been complied with.

d.    An affidavit will be filed with Registrar of Companies in Form INC.9 from each subscriber and from each person named as first director in the Articles of Association.

e.    The specimen signature and latest photograph duly verified by the banker or notary shall be in the prescribed Form INC. 10.

f.     Copy of the License obtained under Section 8 of the Companies Act 2013.

2.    Form DIR 12 (for tutorial of form click here) will be filed for intimating the particulars of each person mentioned in the Articles of Association as first Director of the company and his/her interest in other firms or bodies corporate along with his/her consent to act as Director of the company in form DIR 2.

3. Intimation of situation of Registered office of the Company is to be filed in form INC 22 (for tutorial of form click here) with Registrar of Companies. Form INC 22 can be filed within a period of 30 days of its incorporation and if it is not filed at the time of registration then an address for correspondence is to be given to the Registrar of Companies till its registered office is established. Proof of address in the name of the Company is to be filed along with form INC 22 and in case the registered office is not in the name of the Company, an NOC will also be obtained from the owner of the Registered office and will be attached with the form.

Step 9

Certificate of Incorporation

After the above forms are approved, a certificate of incorporation is issued by the Registrar of Companies in form INC 11 in electronic form and is mailed to the company at its registered email id.

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RAVI GARG (CS)     

91-7838204665, 

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Procedure of Transfer of shares form Resident to Non Resident:

Checklist for Transfer of shares form Resident to Non Resident:

Please find the below compliances:-

1. Pass Board Resolution for transfer of share from Resident to Non Resident.

2. after receiving fund please intimate to AD Bank for the same in prescribed format provided by the bank.

3. send request letter to AD bank for FIRC copy.

4. file FCTRS with in 60 days to AD Bank.

Enclosure required  with FCTRS:-

1. CA Certificate /Valuation report

2. buyers and seller consent

3. debit authority letter

4. declaration from buyer

5. other documents required for as per ban

Retention of Amount in Foreign Currency Account :

Indian companies which are eligible to issue shares to persons resident outside India under the FDI Policy may be allowed to retain the share subscription amount in a Foreign Currency Account, with the prior approval of RBI.

A. Procedure of Transfer of shares form Resident to Non Resident:

Subject to FDI sectoral policy (relating to sectoral caps and entry routes), applicable laws and other conditionalities including security conditions, non-resident investors can also invest in Indian Companies.

• By purchasing/acquiring existing shares from Indian shareholders.
• By purchasing/acquiring existing shares from other non-resident Shareholders

Condition:
General permission has been granted to non-residents/NRIs for acquisition of shares by way of transfer subject to the following:-

i. Transfer from Non- Resident to another Non- Resident: A person resident outside India (other than NRI and erstwhile OCB) may transfer by way of sale or gift, the shares or convertible debentures to any person resident outside India (including NRIs).

• Without Government Approval: Government approval is not required in sectors which are under automatic route.
• Without Government Approval: Government approval is required in which are under Government approval route.

Other Situations:

• NRIs may transfer by way of sale or gift the shares or convertible debentures held by them to another NRI.
• A person resident outside India can transfer any security to a person resident in India by way of gift. A person resident outside India can sell the shares and convertible debentures of an Indian company on a recognized Stock Exchange in India through a stock broker registered with stock exchange or a merchant banker registered with SEBI.

ii. Transfer from Resident to Non- Resident:

A person resident in India can transfer by way of sale, shares/ convertible debentures (including transfer of subscriber’s shares), of an Indian company under private arrangement to a person resident outside India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure of FDI Policy (Discussed below in detail).

General Permission:

General permission is also available for transfer of shares/convertible debentures, by way of sale under private arrangement by a person resident outside India to a person resident in India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure.

The above General Permission also covers transfer by a resident to a non-resident of shares/convertible debentures of an Indian company, engaged in an activity earlier covered under the Government Route but now falling under Automatic Route, as well as transfer of shares by a non-resident to an Indian company under buyback and/or capital reduction scheme of the company.

Sale Consideration: The sale consideration in respect of equity instruments purchased by a person resident outside India, remitted into India through normal banking channels, shall be subjected to a Know Your Customer (KYC) check by the remittance receiving AD Category-I bank at the time of receipt of funds. In case, the remittance receiving AD Category-I bank is different from the AD Category-I bank handling the transfer transaction, the KYC check should be carried out by the remittance receiving bank and the KYC report be submitted by the customer to the AD Category-I bank carrying out the transaction along with the Form FC-TRS.

B. Terms and conditions

For Transfer of Shares/Convertible Debentures, by way of Sale, from a Person Resident in India to a Person Resident outside India (i.e. to foreign national, NRI, FII, FPI and incorporated non-resident entity other than erstwhile OCB):

i. Parties Involved:

• Seller (resident)
• Buyer (non-resident)
• Duly authorized agent/s of the seller and/or buyer,
• Authorized Dealer bank (AD) branch
• Indian company, for recording the transfer of ownership in its books

ii. Pricing Guidelines:

Price of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are:-

• Listed: – Listed on a recognized stock exchange in India shall not be less than the price at which the preferential allotment of shares can be made under the SEBI guidelines. Condition: the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares

• Non- Listed: – Not Listed on a recognized stock exchange in India shall not be less than the fair value to be determined by a SEBI registered Merchant Banker or a Chartered Accountant as per any internationally accepted pricing methodology on arm’s length basis.

Condition: The price per share arrived at should be certified by a SEBI registered Merchant Banker or a Chartered Accountant

iii. Responsibilities / Obligations of the parties: All the parties involved in the transaction would have the responsibility to ensure that

• the relevant regulations under FEMA are complied with and
• Consequent on transfer of shares, the relevant individual limit/sectoral caps/foreign equity participation ceilings as fixed by Government are not breached.
• Settlement of transactions will be subject to payment of applicable taxes, if any.

iv. Method of payment and remittance/credit of sale proceeds :

• Non Resident: The sale consideration in respect of the shares purchased by a person resident outside India shall be remitted to India through normal banking channels.

• FII & FPI: In case the buyer is a FII,FPI, payment should be made by debit to its Special Non-Resident Rupee Account.

• NRI: In case the buyer is a NRI, the payment may be made by way of debit to his NRE/FCNR (B) accounts.

However, if the shares are acquired on non-repatriation basis by NRI, the consideration shall be remitted to India through normal banking channel or paid out of funds held in NRE/FCNR (B)/NRO accounts.

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RAVI GARG (CS)     

91-7838204665, 

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Procedure For Change in Registered Office of the Company from one State to Another State

Section 12

Procedure For Change in Registered Office of the Company from one State to Another State.

Step 1

Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013, (not less than 7 days in writing) for convening a meeting of the Board of Directors

Step 2

Hold Board Meeting

Hold and convene Board Meeting for the following purpose:

·        To get in-principle approval from Board to shift the registered office of the company to another State.

·        To fix date, time and venue for holding Extra-ordinary General Meeting (EGM) to pass special resolution for passing special resolution

·        To approve notice of EGM

·        To authorize any Director or Secretary to issue notice of EGM

Step 3

Issue notice of not less than twenty-one (21) clear days for convening General Meeting to every member of the company, Directors and auditor.

Step 4

In case of listed company, send three copies of the notice to the stock exchanges on which the securities of the company are listed.

Step 5

A general notice of the general meeting may also be published in newspapers.

Step 6

Hold General Meeting

Hold EGM and pass the special resolution.

Step 7

In case of listed company, send copy of the proceedings of the general meeting to the stock exchange with which the company is listed.

Step8

E-formFiling

File Form MGT-14 within 30 days of passing of Resolution along with the following attachments:

·        Notice of EGM

·        Minutes of EGM

·        Copy of Special Resolution

·        Altered AOA & MOA

Step 9

As per Rule 30 of Companies(Incorporation) Rules, 201 the application for seeking approval for alteration of the memorandum with regard to the change of place of the registered office form one State to another shall be filed with the Central government in Form INC - 23 and shall be accompanied by the following documents:

·        Copyof the memorandum and articles of association;

·        Copy of the notice convening the general meeting along with relevant Explanatory Statement;

·        Copy of the special resolution sanctioning the alteration by the members of the company;

·        Copy of the minutes of the general meeting at which the resolution authorizing such alteration was passed, giving details of the number of votes cast in favor or against the resolution;

·        An affidavit verifying the application;

·        The list of creditors and debenture holders entitled to object to the application;

·        An affidavit verifying the list of creditors;

·        The document relating to payment of application fee;

·        Copy of board resolution or Power of Attorney or the executed Vakalatnama, as the case may be.

Step 10

There shall be attached to the application, a list of creditors and debenture holders, drawn up to the latest practicable date preceding the date of filing of application by not more than one month, setting forth the following details, namely:-

·        the names and address of every creditor and debenture holder of the company;

·        the nature and respective amounts due to them in respect of debts, claims or liabilities.

Step 11

The applicant company shall file an affidavit, signed by the Company Secretary of the company, if any and not less than two directors of the company, one of whom shall be a managing director,where there is one, to the effect that they have made a full enquiry into the affairs of the company and, having done so, have formed an opinion that the list of creditors is correct, and that the estimated value as given in the list of the debts or claims payable on a contingency or not ascertained are proper estimates of the values of such debts and claims and that there are no other debts of or claims against the company to their knowledge.

Step 12

There shall also be attached to the application an affidavit from the directors of the company that no employee shall be retrenched as a consequence of shifting of the registered office from one state to another state and also there shall be an application filed by the company to the Chief Secretary of the concerned State Government or the Union territory.

Step 13

A duly authenticated copy of the list of creditors shall be kept at the registered office of the company and any person desirous of inspecting the same may, at any time during the ordinary hours of business, inspect and take extracts from the same on payment of a sum not exceeding ten rupees per page to the company.

Step 14

There shall also be attached to the application a copy of the acknowledgment of service of a copy of the application with complete annexures to the Registrar and Chief Secretary of the State Government or Union territory where the registered office is situated at the time of filing the application.

Step 15

The company shall at least 14 days before the date of hearing-

(a) advertise the application in the Form INC.26 in a vernacular language newspaper and in English newspapers in the district in which the registered office of the company is situated

(b) serve, by registered post with acknowledgement due,individual notice(s), to the effect set out in clause (a) on each debenture-holder and creditor of the company; and

(c) serve, by registered post with acknowledgement due, anotice together with the copy of the application to the Registrar and to theSEBI, in the case of listed companies and to the regulatory body, if the company is regulated under any special Act or law for the time being in force.

Step 16

Where any objection from any person,whose interest is likely to be affected by the proposed application, has been received by the applicant it shall serve a copy thereof to the Central Government on or before the date of hearing. Where no objection has been received from any of the parties, who have been duly served, the application may be put up for orders without hearing.

Step 17

Before confirming the alteration, the Central Government shall ensure that, with respect to every creditor and debenture holder who, in the opinion of the Central government, is entitled to object to the alteration, and who signifies his objection in the manner directed by the Central government, either his consent to the alteration has been obtained or his debt or claim has been discharged or has determined, or has been secured to the satisfaction of the Central Government.

Step 18

After receiving the Regional Director order for shifting the registered office, the company is required to file certified copy of the order with the ROC along with Form INC- 28 within 30 days of receipt of certified copy along with the printed copy of the altered memorandum of association. Only when Form INC-23 is approved, Form INC- 28 could be filed.

Step 19

File Form INC-22 with the new ROC for the situation of the registered office Within 30 days of change with the following attachments:

·        Proof of registered office address(Conveyance/ Lease deed/ Rent Agreement etc. along with the rent receipts not older than one month)

·        Copies of the utility bills (proof of evidence of any utility service like telephone, gas, electricity etc. depicting the address of the premises not older than two months).

·        Proof that the company is permitted to use the address as the registered office of the Company (Authorization from the owner or occupant of the premises along with proof of ownership or occupancy and it is mandatory if registered office is owned by any other entity/ person (not taken on lease by company).

Step 20

 The change of address of the registered office shall be effective from the date of issue of registration certificate by the Registrar of Companies of the State to which the registered office is shifted.

Step 21

Issue a general notice by way of an advertisement in newspaper(s) informing the members of the company all other concerned persons about the change of place of the registered office of the company so that they may address all future communications to the company at its new address.

Step 22

Make alteration in the MOA with respect to the state in every copy of Memorandum.

Step 23

In case of listed company, the Company is required to submit to the Stock Exchange certified copy of amended Memorandum and Articles of Association of the company

Step 24

Each stationery, banner, signboard, bills, invoice etc. should show the new address and necessary advice should be sent to shareholders, debenture holders, and other concerned parties.

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Thanks & Regards

RAVI GARG (CS)     

91-7838204665, 

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