Procedure for Conversion of Trust to Section 8 Company

Priya Gandhi

Priya Gandhi

Published on: Nov 21, 2025

Aakanksha Singhal

Updated on: Nov 21, 2025

★★★★★(1 Rating)

32

Introduction:

Converting a Trust (governed by the Indian Trusts Act, 1882, or relevant state Public Trusts Acts) into a Section 8 Company (governed by the Companies Act, 2013) is a strategic move often undertaken by Non-Profit Organizations (NPOs) for enhanced credibility, better governance, and easier access to institutional and foreign funding.

Key Differences

Applicable Provisions:

1. Section 8, 366 of Companies Act, 2013
2. 3, 4, 5 of Companies (Authorised to Register) Rules, 2014
3. Rule 19 of the Companies (Incorporation) Rules, 2014

Mandatory Requirements:

1. Pass resolution approving the decision of proposed conversion
2. Prepare a Statement of Assets and Liabilities, certified by a Chartered Accountant (CA) or a Registered Valuer
3. No Objection Certificate from secured creditor along-with charge holder, if applicable
4. Permission or No Objection Certificate (NOC) from the Charity Commissioner or the relevant State/Local Authority where the Trust is registered
5. Section 8 Company is required to have:
   • Minimum of 2 shareholders (members) and 2 directors
   • Objects in relation to the promotion of commerce, arts, science, sports, education, research, social welfare, etc.
6. Abstain from distributing any profit to its members and directors directly or indirectly.

Procedure:

1. Conduct Meeting of Trustees
   • Board of Trustees shall conduct a meeting and pass a resolution approving the decision to convert the Trust into a Section 8 Company.
   • This resolution must also authorize designated trustees/persons to take all necessary steps and file applications.
2. Conduct Meeting of Members
   A resolution in a duly convened meeting of members, must be passed by not less than three-fourths (3/4th) of the total members present and voting (in person or by proxy), approving the proposed conversion and subsequent transfer of all the assets and liabilities, to the new company.
3. Intimate Income Tax Authority
   If Trust is registered under section 12A of the Income Tax Act, 1961, for claiming exemption on its income, then an intimation, about the intention, to register as a company under Section 366 of the Companies Act, 2013, must also be sent, to the relevant Income Tax office.
4. Obtain DSC and DIN
   All proposed directors must obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) (if they don’t have them already).
5. Name Reservation
   • File an application for name reservation through the RUN (Reserve Unique Name) form with the Registrar of Companies (ROC) under the Ministry of Corporate Affairs (MCA).
   • The name should reflect the non-profit objectives and cannot include words like ‘Private Limited’ or ‘Limited.’
6. Public Advertisement
   • After name approval, publish a notice in Form URC-2 in two newspapers (one in English and one in the vernacular language) circulating in the district where the trust’s registered office is located.
   • This notice is to invite objections, if any, and a waiting period of 21 clear days is required after publication.
7. File Form for Conversion with ROC
   Once the public notice period is over, file the main conversion application in e-Form URC-1 with the ROC, along with numerous attachments, including:
   • Copy of the original Trust Deed and all subsequent amendments
   • Copy of the Trust’s registration certificate (if applicable)
   • List showing the names, addresses, and occupations of all the existing members of the Trust/Society
   • Statement of the Trust’s assets and liabilities, prepared not more than 15 days preceding the date of application, duly certified by a practicing Chartered Accountant
   • NOCs from Secured Creditors (or a declaration of no secured debt)
   • Copies of the Newspaper Advertisements
   • Declaration from all proposed first directors
   • Statement of all suits or legal proceedings, if any, pending by or against the Trust/Society
   • Copy of the latest Income Tax Return of the Trust.
8. Company Incorporation (SPICe+ Forms)
   Simultaneously or shortly after, file the incorporation forms for the new company:
   • SPICe+ Part B (Simplified Proforma for Incorporating Company Electronically).
   • e-Memorandum of Association (e-MOA) and e-Articles of Association (e-AOA).
   • Other related forms like AGILE-PRO (for GST/EPFO/ESIC/Professional Tax registration).
9. Issuance of Certificate of Incorporation
   Upon successful verification by the ROC, a new Certificate of Incorporation (COI) will be issued. At this point, the Trust is deemed to be dissolved, and all assets, liabilities, and obligations are automatically transferred to the new Section 8 Company.
10. Post Conversion Compliances:
    • Inform the Registrar of Trusts about the completion of conversion process and subsequent dissolution of the trust, within 15 days of receiving the new COI.
    • Apply for necessary registrations/approvals under the Income Tax Act, 1961, such as under Section 12A (for tax exemption on income) and Section 80G (to allow donors to claim tax deductions), if applicable.
    • Company shall:
      • Print the new MoA & AoA with the new Certificate of Incorporation
      • Paint or affix its name and address of its registered office outside every of its place of business and in legible letters
      • Have its name engraved in legible characters on its seal, if any
      • Get its name, address of its registered office, and Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers, notices, and other official publications
      • Send the new address of its registered office to all the Banks, authorities, and other Basic Utility Service providers as applicable.

• Global Compliance Management
• Compliance Management - India
• Legal Matter Management
• Enterprise Risks Management Solution

• Procedure for Appointment of Managing Director or Whole-time Director
• Procedure for Extension of Date for Convening Annual General Meeting (AGM)
• Procedure for Contribution to Political Party by a Corporate Body
• Procedure for Incorporation of a Public Company
• Procedure for Change in Objects of the Company
• Procedure for Increase in the Number of Directors Beyond 15 in the Board of Directors
• Procedure for Buy-Back of Shares or Other Specified Securities by Listed Company through Tender Offer
• Procedure for Issue of Bonus Shares
• Procedure for Variation in Terms of Contract or Objects in Prospectus
• Procedure for Making Calls on Shares