Conversion of Co-operative Society or Society registered under Society Registration Act, 1860 into a Section 8 Company
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With the introduction of Companies Act, 2013 and notification of its enabling provision Section 366, a Co-operative society or a society registered under the provisions of Society Registration Act, 1860 or any other legislation framed by various state governments or any community benefit society may convert itself into a Section 8 company. Section 366 of the Companies Act, 2013 has provided existing Co-operative societies and societies and any other association registered under different laws an option to convert themselves in a Company under Companies Act, 2013.


Section 366 of the Companies Act, 2013 and rules framed under the Companies Act, 2013 set out the requirements for a special resolution. These requirements state that at least three – fourth of the qualified members of the society must vote in favour of the special resolution to convert, either in person, where proxies are allowed, by proxy to be passed by the majority of members, which should not be less than three-fourth of the total members present and voting. A qualified member is a member of society who is qualified to vote on a resolution under the Bye-Laws of Society. Before making a conversion application, the society and its management committee must ensure the followings:


  • There shall be seven or more members;
  • Consent from all the secured and unsecured creditors must have been obtained;
  • A notice in newspaper about such conversion, one in English and in vernacular language seeking objections must be published;


Once the above conditions are satisfied, and a special resolution is passed in the meeting of members of society for such conversion, all the proposed Directors of the Section 8 Company must obtain Digital Signature Certificate and DIN (Director Identification Number) and make an application in Form No. INC – 1 to the Registrar of Companies for the reservation of proposed name. Upon receipt of name reservation application, the Registrar of Companies shall examine the application and in case the proposed name is available for registration, then the same shall be approved.


After obtaining name approval, the next step is to prepare and file Conversion application in Form No. URC – 1 with the Registrar of Companies. The conversion application in Form No. URC – 1 shall be accompanied by the following documents: –


  • A list showing the names, addresses, and occupations of all persons named therein as members with details of shares held by them respectively, showing separately shares allotted for consideration in case and for consideration other than cash along with the source of consideration and distinguishing, in cases where shares are numbered, each share by its number, who on a day, not being more than six clear days before the day of filing this application, were members of the Society;
  • A list showing the particulars of persons proposed as the first directors of the Company, their names, including surnames or family names, the DIN, passport number (if any) with expiry date, residential addresses and their interests in other firms or bodies corporate along with their consent to act as Director of the Company;
  • An affidavit from each of the persons proposed as the first directors, that he is not disqualified to be a director under section 164(1) and that all the documents filed with the Registrar for registration of the Company contain information that is correct and complete and true to be best of his knowledge and belief;
  • A list containing the names and addresses of the members of the society;
  • A Copy of Society’s Bye-Laws and Certificate of Registration issued by the Registrar of Societies duly verified by members of Managing Committee of the Society;
  • A statement specifying the following particulars; a) the nominal share capital of the company and the number of shares into which it is divided; b) the number of shares taken and the amount paid on each share; c) the name of the company, with the addition of the word ‘Association’ or ‘Foundation’ ‘Federation’ etc as the case may require, as the last word or words thereof;
  • Written consent or No Objection Certificate from all the secured creditors of the applicant;
  • Written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for registration under section 366 of the Companies Act, 2013;
  • An affidavit duly notarised, from all the members or partners providing that in the event of registration as a company under Part I Chapter XXI of the Companies Act, 2013, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for this dissolution as Society;
  • Statement of accounts of the company, prepared not later than 6 days preceding the date of application duly certified by auditor, if applicable;
  • Declaration of two or more directors verifying the particulars of all members/partners;
  • Copy of Newspaper advertisement
  • Certificate from a Company Secretary in Practice/Cost Accountant in Practice/Chartered Accountant in Practice certifying the compliance with all the provisions of Stamp Act, to the extent applicable;
  • No objection certificate from the concerned Registrar of Societies.


Once the application for Conversion in Form No. URC – 1 shall be approved by the Registrar of Companies, an application in Form No. INC – 12 for issuance of license under Section 8 of the Companies Act, 2013 shall be made before the Regional Director, Ministry of Corporate Affairs. After issuance of issuance of license under 8 of Companies Act, 2013 another application for the incorporation of company in Form No. INC – 7 along with Form No. DIR – 12 & INC – 22 shall be made and upon its approval, a Certificate of Incorporation shall be issued by the Registrar of Companies.


At last a Certificate of Conversion shall be issued by the Registrar under Section 367 of the Companies Act, 2013 and after obtaining a Certificate under Section 367 of the Companies Act, 2013, an intimation to this effect shall be given, within fifteen days of such registration to the concerned Registrar of Societies under which the society was originally registered, along with necessary papers for its dissolution as Society.


Here it may also be noted that no capital gain tax shall be levied as this transaction won’t fall under the definition of ‘Transfer’ for the purposes calculating and levy of capital gain tax under the Income Tax Act, 1961. Further and such conversion would also be able to satisfy the conditions mentioned under the Income Tax Act, 1961 for claiming exemption from capital gain tax. Further any accumulated losses and unabsorbed depreciation of the society shall be deemed to be the loss or allowance for depreciation of the newly incorporated section 8 Company of the year in which the conversion takes place.


About the Author


Prashant Kumar is Commerce and Law Graduate and an Associate Member of the Institute of Company Secretaries of India. He is presently serving as a CEO of provided online legal and professional services such as Company and Trademark Registration Services, Regulatory Compliance etc. to Startups, SMEs and Commercial Enterprises. I can be contacted at

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