The Ministry of Corporate Affairs, on 5th June released notification granting various relaxations to private companies, Section 8 companies, Nidhi Companies and Government companies.
Section 8 companies of Companies Act, 2013 (Section 25 companies of Companies Act, 1956) are the companies which
1. have as their object the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment and such other objects,
2. intend to apply their profits or income in promoting their objects and
3. intend to prohibit payment to dividends to their members.
Under the Companies Act, 1956 (“Old Act”), the Companies registered under the erstwhile Section 25 of the Old Act enjoyed non applicability of certain specific provisions of the Companies Act, 1956. However in the Companies Act, 2013 (“New Act”), these exemptions had stood withdrawn and these Companies were treated at par with other Public or Private Companies. The recent notification, has granted certain exemptions to Section 8 Companies. This article will provide you with an overview of the exemptions granted, to Section 8 Companies, from the applicability of certain provisions of the New Act.