Section 8 of the company act states provisions related to the formation of a company with charitable objects and of that sort.
It reads as “ where the central government is satisfied that a person of an association of persons purports to be registered under this act as a limited company under the following”:-
- When its objective is to promote and enhance the fields such as art, commerce, science, sports, environmental protection and fields of such sort.
- When it applies its profit derived if any to the promotion of such fields.
- Doesn’t intend to pay its dividend to the members, in such cases the central government may by issuing a license to get that company registered under this act after that the registrar may register such a company under this act.
- The company registered under this section may enjoy all the obligations of such limited companies.
This company basically involves the formation of Not-for-profit companies and its procedures under the Section 8 company registration procedures.
Procedure for getting registered under section 8 company is described under section 8 of companies rules, 2014.
The company secretary is defined as a person who is appointed by a company under 2(24) of the company’s actions to perform all the necessary functions as defined by the Company’s activities.
The company secretaries basically have to perform high-level functions which include governing structures, maintaining corporate conduct, conduct general meeting and board meeting, and to basically exercise the powers conferred upon him under the section 203(1) of the companies act, 2014.
The question is to whether it is mandatory to appoint a CS for a company under section 8 company or not?
Well, it is described in section 2(1) of the company secretaries act, 1980 that the provision of section2(1)(c) would not be applicable to section 8 of the company’s act.
So it is not mandatory to appoint a company secretary in the company under section 8.
A company secretary is required and is mandatory for companies that are listed and has a paid up capital of 10 crores or more, otherwise there is no need for the appointment of a company whose paid-up capital is below the prescribes paid-up share capital, which is defined in section 203 of the companies act, 2013
But after much insistence and deliberations of the ministry of corporate affairs on 9th June 2014, via gazette notification whereby an amendment was made to section 203 of the companies act that a company having a paid-up share capital of 5 crores and more needs to appoint a company secretary necessarily. Those companies having less than the prescribed paid-up share capital need not have a company secretary.