The Section 8 licence is granted on conditions of charitable purpose and proper conduct. Breach of those conditions can lead to its revocation.
## 1. Grounds for Revocation [Sec. 8(6)]
The Central Government (or its delegate — the Regional Director) may revoke the licence if the company:
Violates conditions of the licence;
Conducts its affairs fraudulently; or
Conducts affairs in a manner violative of its objects or prejudicial to public interest.
### Effect of Revocation
Upon revocation, the ROC shall add the word 'Limited' or 'Private Limited' (as the case may be) to the company's name in the register.
## 2. Opportunity of Being Heard
Before revoking the licence, the company MUST be given:
A written notice of intended revocation, AND
A reasonable opportunity to be heard.
## 3. Wind-up or Amalgamation [Sec. 8(7) & 8(9)]
After revocation, if it serves the public interest, the Central Government may direct that the company shall:
Direction
Action
Wind-up
Be wound up under the provisions of the Companies Act
Amalgamate
Be amalgamated with another Section 8 company having similar objects
## Visual Summary
```
┌──────────────────────────────────────────────┐
│ Grounds: licence condition breach / fraud │
│ / object violation / public │
│ interest prejudice │
└────────────────┬─────────────────────────────┘
↓
CG / RD issues written notice + hearing
↓
Licence revoked
↓
ROC adds 'Ltd' / 'Pvt Ltd' to name
↓
If public interest demands:
→ Wind up, OR
→ Amalgamate with similar Sec. 8 co
```
Worked example
### Example 1
Example 1 — Object violation: XYZ Foundation (Sec. 8) registered for environmental protection is actually running a commercial advertising business. → CG/RD may revoke the licence after giving notice and a hearing.
### Example 2
Example 2 — Fraudulent affairs: A Sec. 8 company is found to be siphoning charitable funds to directors' personal accounts. → Grounds for revocation, and possible wind-up direction in public interest.
### Example 3
Example 3 — Post-revocation name: After revocation, 'XYZ Foundation' must be renamed 'XYZ Foundation Limited' or 'Private Limited' (as applicable) by ROC.
### Example 4
Example 4 — Amalgamation alternative: Instead of winding up, CG directs amalgamation with another Sec. 8 environmental company having similar objects — preserving the charitable purpose.
⚠️ Common exam mistakes
Believing licence can be revoked without notice — opportunity of being heard is mandatory.
Forgetting that post-revocation, the name must change to include 'Limited' / 'Private Limited'.
Confusing the two post-revocation routes — winding up OR amalgamation, but amalgamation must be with another Sec. 8 company with similar objects.
Believing revocation automatically wipes out the company — wind-up/amalgamation requires a separate direction in public interest.
Bare-Act text Sec. 8(6), 8(7), 8(9) · Companies Act, 2013 · click to expand
Sec. 8(6) — The Central Government may, by order, revoke the licence granted to a company registered under this section if the company contravenes any of the requirements of this section or any of the conditions subject to which a licence is issued or the affairs of the company are conducted fraudulently or in a manner violative of the objects of the company or prejudicial to public interest, and without prejudice to any other action against the company under this Act, direct the company to convert its status and change its name to add the word 'Limited' or the words 'Private Limited', as the case may be, to its name and thereupon the Registrar shall, without prejudice to the provisions of sub-section (7), on application, in the prescribed form, register the company accordingly: Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard.
Sec. 8(7) — Where a licence is revoked under sub-section (6), the Central Government may, by order, if it is satisfied that it is essential in the public interest, direct that the company be wound up under this Act or amalgamated with another company registered under this section.