Mandatory Conversion and Rationalisation of Sector Skill Councils (Companies Act, 2013)

Mandatory Conversion and Rationalisation of Sector Skill Councils (Companies Act, 2013). The Ministry of Skill Development and Entrepreneurship (MSDE) has reiterated its policy direction regarding the legal structure and institutional framework of Sector Skill Councils (SSCs), with a strong emphasis on standardisation, transparency, and effective governance within the skill development ecosystem.
Conversion of Existing SSCs into Section 8 Companies
All Sector Skill Councils currently registered as Societies under the Societies Registration Act, 1860 are directed to initiate the process of conversion into Section 8 Companies under the Companies Act, 2013 including the requirement flows from MSDE Office Order No. B-12011/02/2016-SDE-I dated 23rd January 2019, which mandated that SSCs functioning as Societies transition to the Section 8 Company framework.
While acknowledging that most SSCs are presently registered under the Societies Act, MSDE has clarified that the existing institutional structure may continue temporarily. However, such SSCs are expected to progressively move towards registration as a Section 8 Company, which is considered the preferred legal form for non-profit entities engaged in education, skill development, and social objectives.
Section 8 Companies provide enhanced regulatory oversight under the Companies Act, 2013, ensure improved corporate governance standards, and promote greater financial discipline and accountability. Section 8 company structure also strengthens the credibility of SSCs in dealings with government bodies, industry stakeholders, and funding agencies.
Formation of New SSCs
MSDE has further clarified that all new SSCs must be formed exclusively as Section 8 Companies under the Companies Act, 2013. Other institutional structures may be permitted only in rare and exceptional cases, and that too with prior approval of MSDE, where there exists strong and well-documented justification for deviation from the prescribed framework.
Rationalisation of Sector Skill Councils
In addition to structural reforms, MSDE has also undertaken the rationalisation of existing SSCs. The total number of SSCs is to be reduced from 40 to 29, in accordance with the revised list provided in Annexure 1. This rationalisation (Conversion of Society trust into a Section 8 company) aims to eliminate overlap, improve sectoral focus, and enhance operational efficiency across the skill development landscape.
Conversion of Society/Trust into a Section 8 Company
As part of the rationalisation measures introduced by the Ministry of Skill Development and Entrepreneurship (MSDE), existing Sector Skill Councils (SSCs) registered as Societies or Trusts are required to transition into Section 8 Companies under the Companies Act, 2013, a conversion is intended to bring uniformity in the legal structure of SSCs, strengthen governance mechanisms, and enhance transparency and accountability in their operations.
While the current institutional structure of SSCs registered under the Societies Act or Trusts may continue for the time being, MSDE has clearly emphasized that such entities should progressively move towards conversion into a Section 8 Company. The Section 8 framework is considered more suitable for non-profit organisations engaged in education, skill development, and allied public welfare activities.
Compliance Timeline and Reporting Requirement
In this regard, MSDE has advised all SSCs to initiate the necessary steps for registration as a Section 8 Company at the earliest. Further, SSCs are required to share a brief status update on the progress of the registration process with MSDE/NSDC on or before 30th January 2026. This reporting mechanism will enable effective monitoring and ensure timely compliance with the Ministry’s directives.
All concerned Sector Skill Councils are advised to treat this matter as a priority and ensure strict adherence to the prescribed legal framework, timelines, and policy objectives set forth by MSDE.

The Ministry of Skill Development and Entrepreneurship (MSDE) has reiterated its policy direction regarding the legal structure and institutional framework of Sector Skill Councils (SSCs), with a strong emphasis on standardisation, transparency, and effective governance within the skill development ecosystem.

Conversion of Existing SSCs into Section 8 Companies

All Sector Skill Councils currently registered as Societies under the Societies Registration Act, 1860 are directed to initiate the process of conversion into Section 8 Companies under the Companies Act, 2013 including the requirement flows from MSDE Office Order No. B-12011/02/2016-SDE-I dated 23rd January 2019, which mandated that SSCs functioning as Societies transition to the Section 8 Company framework.

While acknowledging that most SSCs are presently registered under the Societies Act, MSDE has clarified that the existing institutional structure may continue temporarily. However, such SSCs are expected to progressively move towards registration as a Section 8 Company, which is considered the preferred legal form for non-profit entities engaged in education, skill development, and social objectives.

Section 8 Companies provide enhanced regulatory oversight under the Companies Act, 2013, ensure improved corporate governance standards, and promote greater financial discipline and accountability. Section 8 company structure also strengthens the credibility of SSCs in dealings with government bodies, industry stakeholders, and funding agencies.

Formation of New SSCs

MSDE has further clarified that all new SSCs must be formed exclusively as Section 8 Companies under the Companies Act, 2013. Other institutional structures may be permitted only in rare and exceptional cases, and that too with prior approval of MSDE, where there exists strong and well-documented justification for deviation from the prescribed framework.

Rationalisation of Sector Skill Councils

In addition to structural reforms, MSDE has also undertaken the rationalisation of existing SSCs. The total number of SSCs is to be reduced from 40 to 29, in accordance with the revised list provided in Annexure 1. This rationalisation (Conversion of Society trust into a Section 8 company) aims to eliminate overlap, improve sectoral focus, and enhance operational efficiency across the skill development landscape.

Conversion of Society/Trust into a Section 8 Company

As part of the rationalisation measures introduced by the Ministry of Skill Development and Entrepreneurship (MSDE), existing Sector Skill Councils (SSCs) registered as Societies or Trusts are required to transition into Section 8 Companies under the Companies Act, 2013, a conversion is intended to bring uniformity in the legal structure of SSCs, strengthen governance mechanisms, and enhance transparency and accountability in their operations.

While the current institutional structure of SSCs registered under the Societies Act or Trusts may continue for the time being, MSDE has clearly emphasized that such entities should progressively move towards conversion into a Section 8 Company. The Section 8 framework is considered more suitable for non-profit organisations engaged in education, skill development, and allied public welfare activities.

Compliance Timeline and Reporting Requirement

In this regard, MSDE has advised all SSCs to initiate the necessary steps for registration as a Section 8 Company at the earliest. Further, SSCs are required to share a brief status update on the progress of the registration process with MSDE/NSDC on or before 30th January 2026. This reporting mechanism will enable effective monitoring and ensure timely compliance with the Ministry’s directives.

All concerned Sector Skill Councils are advised to treat this matter as a priority and ensure strict adherence to the prescribed legal framework, timelines, and policy objectives set forth by MSDE.