The restructuring of Trust and Section 8 Company will take place in two steps:

 

Step 1: CONVERSION OF TRUST INTO SECTION 8 UNDER COMPANIES ACT, 2013:

 

1. Brief Background:

There is a proposal to convert the existing trust into section 8 company under the Companies Act, 2013 (“the Act”).

 

1. Eligibility:

A trust registered under the Indian Trust Act, 1882 or any other act is eligible for conversion into a company limited by guarantee under section 8 under Chapter XXI of the applicable provisions of the Companies Act, 2013.

 

There must be two or more members for the purposes of registration of a company under this Chapter of the Act. Further a company with less than seven members shall register as a private company.

1. Advantages of a Section 8 Company:
   1. Many privileges and exemptions pursuant to Act and Ministry of Corporate Affairs (MCA) notifications/ circulars issued thereunder.
   2. Exemption of Stamp Duty.
   3. Tax deductions to the donors of the company u/s. 80G of the Income Tax Act, 1961
   4. No need to add any suffix to its name like ‘Limited’ or ‘Private Limited’.
   5. Other relevant, as applicable under various statutes.

 

1. Documents required:
2. Last 3 years ITRs filed and the Financial Statements of the Trust.
3. Details of all trustees of the trust showing the names, addresses and occupations with their proofs/ KYCs.
4. A certified copy of the certificate of registration of the trust, the trust deed and PAN Card of the Trust.
5. List of Secured and Unsecured Creditors, if any
6. Details of any pending litigations going on against the Trust.
7. Copy of 80G and 12AA Certificate of the Trust.
8. Any other vital information / document related to trust.

 

1. Scope of work:

Our scope of work includes, but is not limited to following –

1.    Reviewing of existing trust documents

2.    Deciding course of action to be executed

3.    Preparation of documents for conversion of trust into section 8 company.

4.    Assisting client to get documents signed/ stamped/ prepared, as may be necessary.

5.    Filing of prescribed forms with the Ministry / Registrar of Companies or competent authority.

6.    Co-ordinating with the Ministry / Registrar of Companies or competent authority to obtained approval for conversion of trust.

7.    Any other task related to conversion of trust to section 8 company.

Step 2: MERGER OF SECTION 8 COMPANY:

1. Brief Details:

A Section 8 Company is a non-profit entity formed for charitable purposes such as promoting education, art, commerce, social welfare, or environmental protection. The merger of Section 8 companies is governed by Section 233 of the Companies Act, 2013, which provides a simplified process for merging two or more such entities.

Unlike regular corporate mergers, a Section 8 company merger must ensure that the charitable objectives remain intact, and the assets of the merging entity continue to be used for nonprofit purposes. The process requires approval from the Regional Director (RD) instead of the National Company Law Tribunal (NCLT), making it more streamlined.

The merger process includes obtaining board and shareholder approvals, preparing a Scheme of Merger, filing necessary documents with the Registrar of Companies (ROC) and RD, and ensuring post-merger compliance. The ultimate goal is to enhance operational efficiency while continuing to serve the public interest.

 

1. Scope of work:

1.     Compiling all information related to the merger assignment

2.     Discussion with the assigned company official/s in case of queries/ clarification required

3.     Finalize time-sheet for execution of the assignment

4.     Drafting documents relating to board meeting, general meeting.

5.     Drafting of Scheme

6.     Drafting of NCLT (National Company Law Tribunal) Application

7.     Drafting of all supporting documents related to NCLT (National Company Law Tribunal) application / petition such as Affidavits, Declarations, Undertaking, Memorandum of Appearance, etc.

8.     Drafting of letters to creditors, authorities, wherever necessary and required.

9.     Drafting / reviewing Certificates obtained from various professionals for merger assignment

10. Executing / Supporting assigned company official/s for all correspondence/ execution

11. Filing of forms / e-forms under the Companies Act, 2013 and rules framed thereunder

12. E-filing of NCLT Application on NCLT portal (submission including clearance of scrutiny, if any)

13. Submission of hard copy of NCLT Application with the NCLT, including further submission, if any required.

14. Representation of the case before NCLT

15. Follow-up with the NCLT for obtaining hearing dates and other allied matters

16. Obtaining order/s from the NCLT

17. Support in post-merger compliance, if any

18. Estimated timelines: 8 – 10 months, subject to the NCLT hearing dates.

1. Assumptions:

In relation to the above scope of work, we have assumed the following:

·   Our advice will be restricted to advise on Indian legal issues and we will not be required to advise on laws other than laws of India;

·   We would be required to review / discuss matter related to taxation, accounting, financial or technical matters along with support of the professionals of the company;

1. Reporting:

We shall report only to you and shall owe no responsibility or duty of care to any other party. Our services are for your benefit and may not be used or relied upon by anyone else without our prior written consent.

 

1. Terms and Conditions:
2. Assigner shall nominate specific person(s) for co-ordination and shall provide relevant data support in concern assignment Mr. Pramodkumar Ladda and will be assigned
3. All the payments should be made in the name of “Ladda Bhutada & Associates”.
4. GST will be added separately additionally @18% on above mentioned
5. All the disputes shall be subject to Pune
6. Termination of this contract requires 30 days’ notice.

 

1. Confidentiality:

All communications between the Parties shall be treated as confidential. We will keep confidential and not disclose to any third party any information or documents received from you, unless otherwise required to be disclosed by law and/or agreed between Parties. For the purposes of the foregoing, “Parties” shall mean you and LBA (“Ladda Bhutada & Associates).

 

1. Professional Fees:

Sr. No.	Particulars	Amount in INR *
1.	Professional fees for conversion of Trust into section 8 Company	Shall be Discuss in Meeting
2.	Professional fees for merger of Section 8 Company	Shall be Discuss in Meeting

                 

*All out of pocket expenses / government fees at actuals.

1. Place of Rendering Services:

The place of rendering services generally shall be our office situated at ​Office No. 106, Sr No. 55, Sukhniwas, 15th August Chowk, Mangalwar Peth, Pune – 411011, Maharashtra, India.

 

“Our priority is Client’s satisfaction and we believe in maintaining healthy and long-term relations with our clients.”

 

Thanking you and assuring best professional services.

 

Sd/-

Pramodkumar R. Ladda

Company Secretary, Insolvency professional