(1) Where it is proved to the satisfaction of the Central Government that a person or an association of persons proposed to be registered under this Act as a limited company—
- has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
- intends to apply its profits, if any, or other income in promoting its objects; and
- intends to prohibit the payment of any dividend to its members,
the Central Government may, by licence issued in such manner as may be prescribed, and on such conditions as it deems fit, direct that the person or the association of persons, as the case may be, may be registered as a limited company under this section without the addition to its name of the word "Limited", or as the case may be, the words "Private Limited", and thereupon the Registrar shall, on application, in the prescribed form, register such person or association of persons as a company under this section.
(2) A company registered under this section shall enjoy all the privileges of limited companies and be subject to all their obligations, except those of using the word "Limited" or the words "Private Limited", as the case may be, as any part of its name.
(3) A firm may be a member of the company registered under this section.
(4) A company registered under this section shall not alter the provisions of its memorandum or articles except with the previous approval of the Central Government.
(5) A company registered under this section may convert itself into company of any other kind only after complying with such conditions as may be prescribed.
(6) Where it is proved to the satisfaction of the Central Government that a company registered under this section has contravened any of the requirements of this section or the conditions subject to which a licence is issued or the affairs of the company are conducted fraudulently, or violative of the objects of the company or prejudicial to public interest, and that it is necessary in the public interest that the company should be wound up, the Central Government may, by order, direct the company to be wound up under this Act or revoke the licence granted to such company under this section.
(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 be amalgamated with another company registered under this section having similar objects.
(8) A company registered under this section shall not distribute any dividend to its members but may pay remuneration to its members not exceeding such limit, if any, as may be prescribed.