Closing a Section 8 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A Section 8 company cannot close by the ordinary voluntary strike-off application: section 248(3) of the Companies Act, 2013 says sub-section (2) does not apply to a company registered under section 8. What remains is conversion into another kind of company, licence revocation by the Central Government, or winding up, and any asset left after debts has a destination fixed by section 8(9). This guide reads the Act in the Ministry's consolidated text (last updated 29 July 2022) and the Companies (Incorporation) Rules, 2014 as consolidated in the Ministry's e-book, consulted on 3 October 2026; later amendments should be checked.
Section 248(2) is not open to a Section 8 company (section 248(3)). On winding up or dissolution, assets left after debts may be transferred to another Section 8 company with similar objects, subject to Tribunal conditions, or sold with the proceeds credited to the Insolvency and Bankruptcy Fund (section 8(9)). Default in the section's requirements attracts fines under section 8(11). The removal rules of 2016, as notified, exclude Section 8 companies from removal under rules 3 and 4; check later amendments before relying on that either way.
Why the strike-off route is closed
Two texts point the same way. Section 248(3) says nothing in section 248(2), the voluntary application, applies to a company registered under section 8. And the proviso to rule 3(1) of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, in clause (x), lists "companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act" among those that "shall not be removed from the register of companies under this rule and rule 4". The copy we read is as notified in 2016, so check later amendments before relying on it either way. The affidavit in Form STK 4 as notified carries a statement that the company is not a Section 8 company.
If you want to talk through a closure, see our strike-off and closure service.
The four exits
| Exit | Provision | What it involves |
|---|---|---|
| Convert into another kind of company | s.8(4)(ii) with rules 21 and 22 of the Incorporation Rules | Special resolution; Regional Director's approval; conditions on special status and surplus |
| Licence revoked by the Central Government | s.8(6) | Order after hearing; direction to convert and change the name; Form INC-20 under rule 23 |
| Winding up or amalgamation order | s.8(7), (8) | In the public interest, after revocation and hearing |
| Winding up or dissolution on other grounds | s.8(9) | Remaining assets as below |
Revocation
Section 8(6) lets the Central Government revoke the licence if the company contravenes the section's requirements or the licence conditions, or if its affairs are conducted fraudulently, in a manner violative of its objects or prejudicial to public interest. It must give a reasonable opportunity of being heard and send a copy of the order to the Registrar. It may direct the company to convert its status and add "Limited" or "Private Limited" to its name. Rule 23 says that where the licence is revoked, the company applies to the Registrar in Form INC-20 to convert its status and change its name.
Section 8(7) allows the Central Government, if satisfied that it is essential in the public interest, to direct winding up under the Act or amalgamation with another Section 8 company, again after a hearing. Section 8(8) lets it order amalgamation with another Section 8 company having similar objects. Section 8(10) says a Section 8 company amalgamates only with another Section 8 company having similar objects.
Conversion as the alternative to closing
A company that wants to continue but not as a Section 8 company converts under section 8(4)(ii). Rule 21 requires a special resolution at a general meeting, with an explanatory statement giving reasons, including the objects, why activities cannot continue under the current structure, privileges enjoyed (such as tax exemptions and donation approvals), land acquired at no cost or at concessional rates, and the impact on members. A certified copy of the resolution and the notice goes to the Registrar in Form MGT-14, and an intimation of the INC-18 application to the Regional Director also goes to the Registrar.
Rule 22 then asks, among other things, for a notice in Form INC-19 in newspapers within a week of submitting the application, copies to the income-tax and other authorities named, a board declaration that no income or property has been paid or transferred to members, no objection certificates where special status was obtained, financial statements and returns filed up to the preceding year, and a practising professional's declaration. The Regional Director's approval may impose conditions, including giving up special status; paying the difference to the Government for property acquired at nil or concessional cost; and using accumulated profit first to settle statutory dues, lenders, creditors and others, with any balance transferred to the Investor Education and Protection Fund within thirty days of receiving the approval. After approval, the company passes a special resolution to amend its memorandum and articles and files, within thirty days from receipt of the order, Form INC-20 with the other documents the rule lists, and the Registrar issues a fresh certificate of incorporation.
Where remaining assets go: section 8(9)
If, on winding up or dissolution, there is an asset left after debts and liabilities are met, section 8(9) says it may be:
- transferred to another company registered under section 8 and having similar objects, subject to conditions the Tribunal may impose; or
- sold and the proceeds credited to the Insolvency and Bankruptcy Fund formed under section 224 of the Insolvency and Bankruptcy Code, 2016.
No distribution to members appears among those options. This matches the Section 8 licence terms in section 8(1)(c), which prohibit the payment of any dividend to members.
Penalty
Section 8(11) provides that if a company makes any default in complying with the section's requirements, the company is punishable with fine of not less than ten lakh rupees which may extend to one crore rupees, and the directors and every officer in default with fine of not less than twenty-five thousand rupees which may extend to twenty-five lakh rupees. If the affairs were conducted fraudulently, every officer in default is liable for action under section 447.
Tax status
12A and 80G consequences of closure, conversion or revocation are tax questions: see our income-tax guides, for example our guide to Section 80G under the Income-tax Act, 2025.
Worked example (invented names)
Greenleaf Foundation, a Section 8 company, has settled all its liabilities and its members decide to close. It holds equipment worth Rs 4,00,000 after debts. Under section 8(9), the equipment may be transferred to another Section 8 company with similar objects, say an environmental education trust company, on conditions the Tribunal sets, or sold and the proceeds credited to the Insolvency and Bankruptcy Fund. Distributing the equipment among members is not one of the options. Since section 248(2) is shut, the closure goes by winding up, not by a strike-off application.
Common mistakes
- Filing a strike-off application as if the company were an ordinary private company.
- Passing surplus to members at the end, against section 8(1)(c) and the board declaration in rule 22(4).
- Missing the hearing stage and notices when the Central Government considers revocation.
- Converting without the no objection certificates the special status requires.
- Assuming the 2016 removal rules say the same today without checking later amendments.
Need help closing or converting a Section 8 company?
We can map which exit fits, prepare the resolutions and the applications to the Regional Director, and check where the remaining assets must go before anyone is paid. See our strike-off and closure service.
Key takeaways
- Section 248(3) shuts the voluntary strike-off route for a Section 8 company.
- Exits are conversion, revocation, a public-interest winding up or amalgamation order, and winding up.
- Remaining assets go to a Section 8 company with similar objects or to the Insolvency and Bankruptcy Fund.
- Conversion needs a special resolution, Regional Director approval and notices to the authorities rule 22 names.
- Section 8(11) carries heavy fines for default.
Read next
- Amending the MOA of a Section 8 Company
- Board's Report Format for a Section 8 Company
- Funds Left in a Company Before Strike Off
- Annual Compliance for a Section 8 Company
Disclaimer: Based on the Companies Act, 2013 in the Ministry of Corporate Affairs consolidated text (last updated 29 July 2022), the Rules as consolidated in the Ministry's e-book and the other official texts named in this article, as consulted on 3 October 2026. Later amendments, notifications, circulars, forms and fees should be checked. Formats are general drafts to be adapted to the company's articles and facts. This article is general information, not legal advice; check the official text before acting.