Conversion of Solar Energy Corporation of India from Section 8 company to Section 3 company under the Companies Act, 2013 and renaming it as Renewable Energy Corporation of India
The major impact of the decision will
be:
(1) SECI will become a self-sustaining and self-generating organization.
(2) SECI will engage itself in owning solar power plants generating and selling power and in other segments of solar sector activities, including manufacturing of solar products and materials,
(3) SECI will become RECI after change of its name and then will take
up development of all segments of renewable energy namely, geo-thermal, off-shore
wind, tidal etc. apart from solar energy.
Section 8 of the Companies Act, 2013
[earlier Section 25 of the Companies, Act 1956] provides for formation of
companies with charitable, objects. Under this provision, the commercial aspect
of a business entity and its growth is completely prohibited. In comparison for
a Section 3 company the object is not limited, and is mainly for commercial
activities which will facilitate growth of the company. It therefore, means
that a Section 8 company can only engage in activities of promotion of
commerce, art, science, sports, education, research, social welfare, religion,
charity etc., but not commercial activity leading to trade, buying and selling
etc. resulting in profit and distribution of dividend.
The Government has also decided to
enlarge the scope of the activities of SECI to cover all renewable energy sources,
with a view to provide a comprehensive and optimized solution for generation of
renewable energy integrating various renewable energy sources. The generation
profile of solar, wind and small hydro have complementarity and generating
power from these sources are likely to be more uniform. This will also reduce
stress on transmission and distribution networks, resulting in better grid
management. Considering this aspect, the Government has allowed the change of
name from "Solar Energy Corporation of India (SECI)" to
"Renewable Energy Corporation of India (RECI)".
Background
After approval of the Government, the
SECI was registered as a Section 25 Company under the Companies Act, 1956 (now
under Section 8 of the Companies Act, 2013) on 20.09.2011.
SECI has initiated various activities for setting up
of solar power plants as also for the promotion and commercialization of solar
energy technologies, with long term perspective of assuming the role of a solar
power developer.
For the first time, SECI made a profit of about 12 crore during the last financial year and has become a networth positive PSU. It is also expected to make a profit of around 300 crore this year.
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