8. (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 the Rehabilitation and Insolvency Fund formed under section 269.
(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 with imprisonment for a term
which may extend to three years or with fine which shall not be less than
twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or
with both:
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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