Non- Profit Company- Revocation of License
Revocation of License- Under Section 8(6) of the Companies Act, 2013 the Central Government has the power to revoke the licence granted to a company registered as Non-profit company , after giving the company a reasonable opportunity of being heard.
Grounds on which License can be revoked
If a non- profit company violates or contravenes any of the requirements of Section 8 of the Companies Act, 2013 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 objectives of the company, or
- prejudicial to public interest
Then the Central Government may 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.
On revocation, if the Central Government deems it fit in public interest, then the Government can direct the company to wind up under provisions of the Companies Act, 2013 or be amalgamated with another company registered under Section 8 and having similar objects.
Penalty for contravention of Provisions- Section 8
The following penalties will be imposed if a company makes any default in complying with any of the provisions laid down under section 8:
|For Company||Fine not less than INR 10,00,000 but may extend to INR 1,00,00,000.|
|For each director and officer of the Company||Imprisonment for a term which may extend to three years or with fine not less than INR 25,000 but may extend to INR 25,00,000, or with both.|
For more information on Not For Profit Companies in India, please write to us at email@example.com or submit a query.
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