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Converting a Section 8 company

Companies Act 2013 491 views 2 replies

Pooja M

105 Points Posted on 05 February 2026

A Section 8 company has been incorporated (with share capital). They do not want to go through the process of demat of shares (due to the one time expense and annual charges). Is there an option to now convert the Company to one limited by guarantee?

Also if they wish to close the company can they do so by Form STK 2?

Replies (2)

Quick Summary

A Section 8 company can't freely convert from share capital to guarantee; it needs MCA approval and is rarely done. Demat is mandatory. STK-2 closure isn't straightforward-requires government approval and asset transfer to another Section 8/charity.

Aashok Kumar Sharma

Finance/Compliance Consultant

61849 Points Posted on 06 February 2026

A Section 8 company cannot be converted from share capital to guarantee structure
Dematerialisation of shares is mandatory and unavoidable
STK-2 cannot be used to close a Section 8 company
Closure requires formal winding up with Central Government approval
Going forward, Section 8 companies should be incorporated without share capital

Sandhya Garg

Finance Consultancy Services

179 Points Posted on 18 February 2026

Conversion (Share Capital → Guarantee): Possible only with MCA / Ministry approval; practically easier to register a new Section 8 company limited by guarantee.
Closure / Striking Off (STK-2): Can be done with Regional Director / Ministry approval; remaining assets must be transferred to another Section 8 company or charitable purpose.