As per Section 8 of Indian Companies Act 2013 a Charitable company can be formed by filing necessary documents with the Registrar of Companies. Earlier this kind of companies were being formed under section 25 of Indian Companies Act 1956, which is now under Section 8 of the New Act. Provision in the Indian Companies Act 2013 regarding Formation of Companies with Charitable Objects etc is as under.
(1) Where it is proved to the satisfaction of the Central Government
that a person or an association of persons proposed to be registered
under this Act as a limited company--
(a) has in its objects the promotion of commerce, art, science,
sports, education, research, social welfare, religion, charity,
protection of environment or any such other object;
(b) intends to apply its profits, if any, or other income in
promoting its objects; and
(c) intends to prohibit the payment of any dividend to its members,
the Central Government may, by licence issued in such manner as may
be prescribed, and on such conditions as it deems fit, allow that
person or association of persons to be registered as a limited
company under this section without the addition to its name of the
word "Limited", or as the case may be, the words "Private Limited",
and thereupon the Registrar shall, on application, in the prescribed
form, register such person or association of persons as a company
under this section.
(2) The company registered under this section shall enjoy all the
privileges and be subject to all the obligations of limited
companies.
(3) A firm may be a member of the company registered under this
section.
(4) (i) A company registered under this section shall not alter the
provisions of its memorandum or articles except with the previous
approval of the Central Government.
(ii) A company registered under this section may convert itself into
company of any other kind only after complying with such conditions
as may be prescribed.
(5) Where it is proved to the satisfaction of the Central Government
that a limited company registered under this Act or under any
previous company law has been formed with any of the objects
specified in clause (a) of sub-section (1) and with the restrictions
and prohibitions as mentioned respectively in clauses (b) and (c) of
that sub-section, it may, by licence, allow the company to be
registered under this section subject to such conditions as the
Central Government deems fit and to change its name by omitting the
word "Limited", or as the case may be, the words "Private Limited"
from its name and thereupon the Registrar shall, on application, in
the prescribed form, register such company under this section and
all the provisions of this section shall apply to that company.
(6) The Central Government may, by order, revoke the licence granted
to a company registered under this section if the company
contravenes any of the requirements of this section or any of the
conditions subject to which a licence is issued or the affairs of
the company are conducted fraudulently or in a manner violative of
the objects of the company or prejudicial to public interest, and
without prejudice to any other action against the company under this
Act, direct the company to convert its status and change its name to
add the word" Limited" or the words "Private Limited", as the case
may be, to its name and thereupon the Registrar shall, without
prejudice to any action that may be taken under sub-section (7), on
application, in the prescribed form, register the company
accordingly:
Provided that no such order shall be made unless the company is
given a reasonable opportunity of being heard:
Provided further that a copy of every such order shall be given to
the Registrar.
(7) Where a licence is revoked under sub-section (6), the Central
Government may, by order, if it is satisfied that it is essential in
the public interest, direct that the company be wound up under this
Act or amalgamated with another company registered under this
section:
Provided that no such order shall be made unless the company is
given a reasonable opportunity of being heard.
(8) Where a licence is revoked under sub-section (6) and where the
Central Government is satisfied that it is essential in the public
interest that the company registered under this section should be
amalgamated with another company registered under this section and
having similar objects, then, notwithstanding anything to the
contrary contained in this Act, the Central Government may, by
order, provide for such amalgamation to form a single company with
such constitution, properties, powers, rights, interest, authorities
and privileges and with such liabilities, duties and obligations as
may be specified in the order.
(9) If on the winding up or dissolution of a company registered
under this section, there remains, after the satisfaction of its
debts and liabilities, any asset, they may be transferred to another
company registered under this section and having similar objects,
subject to such conditions as the Tribunal may impose, or may be
sold and proceeds thereof credited to 1 [Insolvency and Bankruptcy
Fund formed under section 224 of the Insolvency and Bankruptcy Code,
2016 (31 of 2016)].
(10) A company registered under this section shall amalgamate only
with another company registered under this section and having
similar objects.
(11) If a company makes any default in complying with any of the
requirements laid down in this section, the company shall, without
prejudice to any other action under the provisions of this section,
be punishable with fine which shall not be less than ten lakh rupees
but which may extend to one crore rupees and the directors and every
officer of the company who is in default shall be punishable 2***
with fine which shall not be less than twenty-five thousand rupees
but which may extend to 3 [twenty-five lakh rupees]:
Provided that when it is proved that the affairs of the company were
conducted fraudulently, every officer in default shall be liable for
action under section 447.
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1. Subs. by Act 31 of 2016, s. 255 and the Eleventh Schedule, for
"the Rehabilitation and Insolvency Fund formed under section 269" (w.e.f.
15-11-2016).
2. The words "with imprisonment for a term which may extend to three
years or" omitted by Act 29 of 2020, s. 3 (w.e.f. 21-12- 2020).
3. Subs. by Act 29 of 2020, s. 3, for "twenty-five lakh rupees, or
with both" (w.e.f. 21-12-2020).