1. Legal Provision for Conversion

• Yes, a Section 8 company can be converted into a regular private or public limited company.
  
• This is permitted under Rule 21 and Rule 22 of the Companies (Incorporation) Rules, 2014.
  
• Such conversion requires prior approval from the Regional Director (RD).
  
• The company must apply to the Registrar of Companies (ROC) after obtaining approval.
  
• The conversion must comply with the conditions prescribed under the Companies Act, 2013.
  

2. Eligibility Conditions for Conversion

• The company must have filed all financial statements and annual returns.
  
• There should be no pending legal proceedings or regulatory violations.
  
• The company must surrender any tax exemptions or benefits it availed as a Section 8 company.
  
• It should pass a special resolution at a general meeting approving the conversion.
  
• A Board Resolution and necessary declarations must be executed.
  

3. Application and Documentation Requirements

• Apply conversion using Form INC-18 with the Regional Director.
  
• Attach the following documents:
  – Copy of Board and Special Resolution
  – Audited financial statements
  – Declaration by directors and members
  – Statement of assets and liabilities
  – Report on asset utilization for charitable purposes
  
• Once approved, file Form INC-20 with the ROC for final conversion.
  

4. Restrictions and Post-Conversion Compliance

• The company must cease all charitable activities upon conversion.
  
• It cannot retain the license under Section 8 post-conversion.
  
• All assets acquired from grants or donations must be transferred to another Section 8 company or approved entity.
  
• The company must update its MOA and AOA to reflect the new status.
  
• Post-conversion, it must comply with all regulations applicable to private or public limited companies.
  

5. Regulatory Oversight and Approval Timeline

• The Regional Director scrutinizes the application to ensure that the conversion is not misused.
  
• If satisfied, the RD grants approval, usually within 30 to 45 days.
  
• The ROC updates the company’s status and issues a fresh Certificate of Incorporation.
  
• Any misrepresentation in the application can lead to rejection or penalties.
  
• Proper legal and financial documentation helps in a smooth conversion.