Altering the Objects of a Section 8 Company: Company Law Steps and Income-tax Registration Consequences

This article covers what a Section 8 company must do under the Companies Act, 2013 to alter its objects, and how the alteration bears on its registration as a non-profit organisation and on the approval under which donors claim deductions under the Income-tax Act, 2025.

The two tracks run independently. A company can complete every company-law step correctly and still put its tax exemption at risk if the revised objects fall outside the conditions of its registration. Advisers are often asked to draft new objects before anyone has compared them with the registration order, which is the wrong point at which to find the mismatch.

Company-law requirements

What the Act prescribes

Section 8(1) governs the permitted objects of a licensed company, the application of profits towards those objects and the bar on dividends. The objects listed in Section 8(1)(a) include commerce, art, science, sports, education, research, social welfare, religion, charity and protection of the environment.

Steps for the alteration

• Section 8(4)(i) requires previous approval for altering the memorandum or articles. The delegated authority and the filing route should be checked before the resolution is moved.
• Section 13 requires a special resolution, filing with the Registrar and registration of the alteration.
• Section 13(10) provides that the alteration has no effect until it is registered.
• Section 110 and Rule 22 of the Companies (Management and Administration) Rules, 2014 deal with postal ballot. Whether a postal ballot is required should be assessed in light of the company's status and the exemptions available to it.

FCRA