INCORPORATION OF SEC-8 COMPANY

INCORPORATION OF SEC-8 COMPANY

Moving from the Companies Act 1956 to the Companies Act 2013 is like shifting from your old house to a new one. All the provisions become changed with new Act, 2013. Due to new act many amendments were introduce by Central Government from time to time by Notification, Amendments etc. Same like this many amendments have been made in last approximately 4 years in relation to Incorporation of New Company.

INTRODUCTION

The concept of Non-Profit making Company is quite old in India. In erstwhile, Companies Act, 1956 it was regulated by Section 25 and that is why it was popular as Section 25 Company. However in Companies Act 2013 provisions related to Non-Profit making Company are given in Section 8 read with Rule 19 and 20 of Companies (Incorporation) Rules, 2014.

Under Indian law, 3 legal forms exist for NGO or Non-Profit Organizations:

1.      => Trusts

2.      => Societies

3.      => Section 8 Companies

Due to better laws, Section 8 Companies have the most reliable strongest organizational structure

1.      => Indian Trusts have no central law.

2.      => Indian Societies have different legal and institutional frameworks from state to state.

3.      => Indian Companies (incl. Sec 8 companies), have one uniform law across the country –   

      Companies Act, 2013.

It is this robust Act that regulates the formation, management and accountability of a Section 25 company, thus making it more closely regulated and monitored than trusts and societies, and recognized all over the world.

 Through this article we shall talk about the basic provisions and procedure for incorporation of a Non-Profit creation Company as given in Section 8 read with Rule 19 and 20 of Companies (Incorporation) Rules, 2014.

Section 8 Company or a Non-Profit organization (NPO) is a Company established for promoting commerce, art, science, religion, charity or any other useful object, provided the profits, if any, or other income is applied for promoting only the objects of the Company and no dividend is paid to its members.

A NPO/NGO can be formed for promotion of any useful object like sports, education, research activities etc. The term Non Profit does not mean that the Company cannot generate profit or income, but it essentially means applying the income for further promotion of the object and not for distributing it to the promoters. It means that the Company can earn profits but the promoters cannot be benefited out of those profits.

Corresponding provisions of the Companies Act, 1956:
Section 25

Corresponding provisions of the English Companies Act, 2006:
Sections 42, 181 and 226

A COMPANY INCORPORATED UNDER SECTION 8 OF THE COMPANIES ACT 2013 IS:

As per Section 8 (1): A Non-Profit making Company is a Company which:

(a)  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;

(b)  Intends to apply its profits, if any, or other income in promoting its objects; and

(c)   Intends to prohibit the payment of any dividend to its members.

IMPORTANT PROVISIONS:

IMPORTANT PROVISIONS RELATING TO SECTION- 8 COMPANIES:

Ø   These Companies are incorporated only for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.

Ø   Non- Small Company: As per Section 2 (85) Proviso(B) –  Section-8 Company will not be treated as Small Company.

Ø   Status of Limited Company: As per Section 8(2) – Section 8 Company shall enjoy all the privileges and be subject to all the obligations of Limited Company.

Ø   It is the duty of Company to prove to Central Government that it will incorporate for above mentioned purpose only.

Ø   License by Central Government: The Central Government may issue license with such conditions as it deems fit and allow the registration of such person or association of persons as a limited company without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited”.

Ø   Power of ROC: The power of the Central government is delegated to the Registrar of Companies (‘ROC’) having Jurisdiction over the area where the Registered office of the company is proposed to be situated. Hence, the application for registering such Company is to be made to the ROC.

Ø   Firm as a member of Non-Profit Making Company: As per section 8(3) a partnership firm may become a member of the Non-Profit making Company registered under section 8. Membership of such firm shall cease upon dissolution of the firm. However, partners of the dissolved firm may continue to be the members of such Company in their individual capacity

Ø   Key Benefits:

·         Many privileges and exemptions under Company Law vide notification dated 05^th June, 2015.

·         Exemption of Stamp duty for registration.

·         Registered partnership firm can be a member in its own capacity.

·         Tax deductions to the donors of the Company u/s. 80G of the Income Tax Act.

Ø  Without Share Capital: These Companies can be formed with or without share capital, in case they are formed without capital, the necessary funds for carrying the business are brought in form of donations , subscriptions from members and general public.

 

Ø   Not Required To Add The Suffix: Section 8 Companies are not required to add the suffix Limited or Private Limited at the end of their name. All Companies having limited liability are required to use the term ‘limited’ or ‘private limited’ as the case may be in their names as required by section 13. But section 25 companies are allowed to dispense with the use of term ‘limited’ or ‘private limited’ from their names [sub-sec. (6)]. This helps the Company to enjoy limited liability without disclosing to the public the nature of liability of its members.

Ø   Suffix that can be use for incorporation: The name shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc.

At present following words are not allowed for Incorporation of Section 8 Company; “Organization”, “Institute”, “word other than mentioned above” Earlier these words were allowed for incorporation of Section 8 Company and even there are many section 8 companies ending with such prefix. Therefore, It can be opine “and the like etc” can’t use for incorporation of Section 8 Company as per latest Resubmissions or Rejections.

Ø  Easy Transferable Ownership: The shares and other interest of any member in the Company shall be a movable property and can be transferable in the manner provided by the Articles, which is otherwise not easily possible in other business forms. Therefore, it is easier to become or leave the membership of the Company or otherwise it is easier to transfer the ownership.

DISADVANTAGE:-

The DISADVANTAGES of section 8 Companies over other Companies registered under Companies Act are discussed below:

Though a Section 8 Company has many advantages and enjoys many privileges yet there are some statutory obligations which are required to be complied with and taken care of by such companies.

Ø  Key Conditions:

·         Profit or Income of the Company shall be applied for the promotion of the main object.

·         Declaration of dividend or distribution of profit to the promoters is not allowed.

·         No member shall be appointed as a remunerated officer.

·         No remuneration / benefit shall be paid to a member being a servant / officer of the Company (except reimbursement of out of pocket expenses, reasonable interest on money lent or reasonable rent on the premises).

Ø  Utilization of Profit: A Section 8 Company has to ensure that its profits and all other incomes are utilized only for the purpose of promoting its objects and not for any other purpose.

Ø  It should also ensure that its profits are not distributed as dividend among its members.

Ø  No Change in AOA and MOA: 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.

Ø  Condition by Central Government: If the Central Government has imposed some conditions and regulations upon the Company for granting a license under section 8 then such a Company is bound by such conditions and has to ensure adequate compliance with them. Where such conditions and regulations have been imposed then such conditions and regulations are required to be included in the Articles or/and Memorandum of the Company as may be directed by the Government.

Ø  Tax Liability: Section 25 Company is regarded as a ‘Company’ within the meaning of the Income Tax Act, 1961 and as such its income is taxable according to the applicable rates similar to those applying to other Companies.

THE PROCEDURE FOR INCORPORATION OF SECTION-8 COMPANY IS AS FOLLOWS:-

PRE INCORPORATION:

1.     NORMAL CONDITIONS:

·         At Least 2 Promoters: Promoters who will promote/ incorporate the Company. Promoters may be individual or body corporate.

·         At Least 2 Directors: Directors should be individual only. No Body corporate/ HUF or Partnership Firm can be appointed as Directors.

·         Generally, in most of the cases, Promoters and Directors are the same in Private Limited Companies.

2.     OBTAIN DIGITAL SIGNATURE- All the Subscribers required DSC.  As per Ministry of Corporate Affairs, Class-II DSC is required for e-Filings under MCA21.  Subscriber can apply with any of DSC Vender i.e. E Mudra/ Siffy/ TCS etc

3.     OBTAIN DIN- As envisaged under section 153, an individual intending to become Director needs to obtain DIN. In case of proposed director doesn’t having DIN, in such case he have to apply for DIN along with Incorporation in SPICE INC 32 Form.

process of incorporation

STEP – I: Apply for Name Approval:-

A.     Login on MCA Website

Applicant have to login into their account on MCA Website. (Pro-existing users can use earlier account or new users have to create a new account.)

After Login use have to click on the icon “RUN” in MCA Service. An online form shall be open. Applicants have to fill the information online. (This form can’t be download)

Note* since 26^th January, 2018 e-form INC-1 has been omitted from the Companies Act, 2013.

B.     Details required to be mentioned in online form:

(i)                       Entity type (i.e. Part I, OPC, Section 8 etc.) (below table taken from MCA link: http://www.mca.gov.in/MinistryV2/runServicerFAQ.html)

(ii)   CIN (Corporate Identification Number and it has to be entered only when an existing company wishes to change its name and is using RUN to reserve a new name)

(iii) Proposed name  (Auto Check Facility)

(iv) Comment (Mention Objects of the proposed Company and any other relevant information Like Trade Mark etc.)

(v)   Choose File (Any attachment)

C.      Choose File:

This option is available to upload the PDF documents. If applicant want to attach any file, can be upload at this option.

D.     Submission of Form on MCA Website:

After completion of above steps user shall submit the Form with MCA website.

E.      Payment of Fees:

There is no option of pay later challan in RUN. Applicant has to pay fees immediately after submission of form. After payment challan shall be generated.

I.            Validity of Reserved Name:

Reserved name shall be valid for 20 days from the date of approval of Name.

v  Two Names: Two Proposed Names can be given and payment of Rs. 1,000/- through Credit/ Debit Card or Net Banking.

It has to also be ensured that the name being sought for is available and it is lawful. No need to add the suffix Limited or Private Limited at the end of their name.

Quick Question - RUN

i.            Whether DIN or DSC required for filing of Run form?

DSC & DIN not required for filing of RUN form for reservation of Name. Only account of MCA portal is mandatory.

ii.            How many resubmission options are allowed in RUN?

One Resubmission of application is allowed in case of reservation of Name.

iii.            What shall be the validity of the Name after approval?

                      i.            Reserved name shall be valid for 20 days in case of allotment of name for New Company.

iv.            How many name can be apply through this form?

Only Two Names can be mentioned in RUN form. Earlier INC-1 allowed 6 names according to the preference.

v.            What shall be the government fees for RUN?

As per Register office Fees Rules, Fees shall be Rs. 1,000/-

vi.            Is it mandatory to attach documents while reserving name?

No.

It is mandatory to attach relevant documents and No Objection Certificates(NOCs) only when a name which requires the approval of a Sectoral Regulator or NoC etc. if applicable, as per the Companies(Incorporation) Rules, 2014, is being applied for.

Please note that only one file is allowed to be uploaded as an attachment and the size of the file should not exceed 6MB. In case of multiple attachments, please scan all documents into a single file not exceeding 6MB in size, and then upload the same.

vii.            Whether there is any requirement to mention details of Directors in the RUN?

No, there is no need to mention the name or number of proposed Directors in RUN.

NOTE: * Approval of Name through “RUN” is an Mandatory way. Companies can’t Directly apply for Incorporation Directly in SPICE form.

AFTER NAME APPROVAL PROCESS:

Once Name is approved by ROC, following are the Pre-Incorporation Steps:

DRAFTING OF MEMORANDUM OF ASSOCIATION (MOA) AND ARTICLE OF ASSOCIATION (AOA):

Drafting of Memorandum of Association (MOA) and Article of Association (AOA) is generally a step subsequent to the availability of name made by the registrar. It should be noted that the main objects should match with the objects shown in RUN.

These two documents are basically the charter and internal rules and regulations of the Company. Therefore, it must be drafted with utmost care and with the advice of the professional. The Directors/ promoters with the help of professional draft MOA and AOA.

AOA:

Article of Association contains the internal regulations of the Company so care should be taken while drafting it. The model articles are given under table F of Schedule I. Now under Companies Act, 2013 requirement for making alteration to certain clauses of AOA can be made more stringent by way of inserting entrenchment provision.

Also ensure that the MOA & AOA are not ultra-vires the law (Section 6)

MOA:

§  The formats of MOA are given in Form INC-13. 

§  Format of MOA and AOA revised from time to time because of change in Companies Act and recently Companies Act 2013 laid down another form of MOA which has total twelve clause.

§  MOA of Section 8 Company registration (previously called section 25 company) has been prescribed in form INC-13 by the Companies Act 2013 followed by rule 19 sub rule 2 of Companies Incorporation Rule 2014.

Procedure for drafting MOA of section 8 Company start from:

1^st clause which contain name of the section 25 or 8 company example XYZ Foundation or XYZ association etc.

Second clause state to mention state in which registered office of the proposed section 8 Company will be situated example NCT of Delhi for Delhi or State of Haryana for Haryana etc.

Third clause of INC-13 i.e. MOA contains charitable object of section 8 company i.e. to establish industrial training center or college or social service center etc. i.e. only object having charitable purpose and restricted company to support with its fund which will make trade union or other company which are observed by its member.

Clause  4 of moa clearly mention that object of the company extend whole of India except J & K.

Clause  5 of the MOA restricted diversion of section 8 company income or property to any of its member or its related party in any form. It has also been clarified that profit of such company can only be utilized for its charitable object. Prudent Remuneration allowed to its member only when he actually provides services to the company.

Clause 6 provides that Memorandum of Association cannot be altered unless alteration has been previously approved by the registrar of company

Clause  8 state liability of the member is limited

Clause  8 contain information about share capital of the company.

Clause 9 required to maintain certain record and books for expenditure income assets etc. and once in an every year accounts shall be examined by auditor about correctness of balance sheet and income & expenditure.

Clause 10 mentioned about dissolution of Section 8 Company and whereas

Clause 11 states section 8 company can be amalgamated only with section eight company having similar object and

Clause 12 contains detail of subscriber of MOA. Format of AOA of section eight company is same as for Private Limited Company registration.

STEP – II: Application for License under Section 8 of the Companies Act 2013:

An Application for License under Section 8 shall be filed in form INC 12  with following attachments:

S. No.	Attachment	Details of Attachments
A.	AOA	Article of Association
B.	MOA	Memorandum of Association as per Form INC-13
C.	INC-14	Declaration By Professionals Pursuant to section 7(1) (b) and rule 19(3)(b) of the Companies (Incorporation and incidental) Rules, 2014: Require to take a Declaration from Professionals Like: ( Advocate, CS-CA-CWA), Giving declaration that, all the requirements of Companies Act, 2013 and the rules made there-under relating to registration of the company under the Act and matters precedent or incidental thereto have been complied with. On Stamp Paper, Value of Stamp Paper as per the State stamp Act (State: Where register office of Company will be situated). In DELHI value of Stamp paper is Rs.10 /-. (ATTACHED LIST BELOW). Professional will sign the declaration and will mention Date, Place and Membership No.
D.	INC-15	Declaration By Promoters: [Pursuant to rule 19 (3)(d) of the Companies (Incorporation and Incidental) Rules, 2014] Require to take a Declaration from Prmoters Like: Giving declaration that, Ø  The draft memorandum and articles of association have been drawn up in conformity with the provisions of section 8 Ø  All the requirements of the Act and the rules made there under relating to registration of the company under section 8 and matters incidental or supplemental thereto have been complied with; On Stamp Paper, Value of Stamp Paper as per the State stamp Act (State: Where register office of Company will be situated). In DELHI value of Stamp paper is Rs.10 /-. (ATTACHED LIST BELOW). Professional will sign the declaration and will mention Date, Place and Membership No
E.	Estimated Annual Income	An estimate of the future annual income and expenditure of the company for Next Three Years, specifying the sources of the income and the objects of the expenditure.
F.	Brief profile  Of all the promoters.	Profile of Promoters Like: Ø  List of names, descriptions, addresses & occupation of the promoters as well as Board Members of the proposed company. Ø  ID Proof, Directorship, Shareholder ship etc

DUTY OF REGISTRAR TO SCRUTINISE THE DOCUMENTS:

If after filling the Requisite forms for incorporation with the Registrar of Companies along with fees, ROC is satisfied with the contents of the documents filed, ROC will issue the Licence in form No. INC.16 under section 8(1) read with rule 19 of Companies (Incorporation) Rules, 2014. Such company registered under section 8 shall enjoy all the privileges and be subject to all the obligations of Limited Companies.

STEP – III: Preparation of Documents for Incorporation of Company:

Form	Attachments
INC-7	1.      Memorandum of Association 2.      Articles of Association 3.      Affidavit from Subscribers and Directors in INC-9 4.      Copy of PAN Card 5.      Copy of ID proofs 6.      Copy of Address Proofs 7.      Directorship/Promoter ship in other companies(if more than 3) 8.      Copy of License received from Competent Authority. 9.      Consent in DIR-2 along with ID& Address proof 1.      Utility Bill, not older than 2 months old 2.      Proof  of registered office address 10. No objection certificate in case registered office is not taken on lease	MANDATORY
	11. Board Resolution (Body corporate subscriber) 12. Certificate of Incorporation & proof of registered office (Foreign Body corporate subscriber) 13. Entrenched Articles 14. Proof of Nationality(In case of foreign national) 15. Declaration by foreigner if he does not possess PAN (as per MCA circular 16/2014) 16. NOC in case there is change in the promoters 17. Principal approval taken from RBI for carrying NBFC activity	AD-HOC

# Obtains Following Documents/Information From Subscribers: -

S. NO.	PROVISION	PARTICULARS	REMARKS
A.	Section 7(1)(e) + Rule 16	ID Proof (PAN + Voter ID/Passport /Driving License/Aadhar Card)	For foreign nationals and NRI only passport will suffice
		Address Proof both permanent & present (Electricity/Telephone/ Mobile Bill/ Bank Statement)	The proofs should not be 2 months old
		Proof of nationality  (Applicable only to foreign nationals)	Although all subscribers can be foreigners but at least 1 director should be resident (section 149(3))
		Disclosure of Directorship /promotership in other companies	Refer definition of promoter (Sec. 2(69))
		Specimen signature with photo duly verified by notary/Banker  in INC-10
B.	Section 7(1)(c) + Rule 15	Affidavit in form INC-9
C.	Section 7(1)(e) + Rule 16	In case subscriber is a Body Corporate: - ·      Board Resolution for subscribing shares, making investment & Authorizing a person to  subscribe & Sign MOA ·      For person authorized, documents required in point A to C shall also be required.	·   In case Body Corporate is LLP the resolution should be approved by all partners. ·   In case of a foreign Body Corporate, copy of registration & proof of registered address is also required. ·   Authorized person cant become subscriber to MOA & AOA  in individual capacity  at the same time  (Proviso to rule13(4))
D.	Section 7(1)(e) + Rule 16	Following information is also required from subscriber: - ·      Place of Birth(District & State) ·      Educational Qualification ·      Occupation ·      Duration of stay at present address, if less than 1 year then previous address ·      Email ID & phone no.	Address, e-mail id & phone no. should be of subscriber only and not professional.

OBTAIN FOLLOWING DOCUMENTS/INFORMATION FROM DIRECTORS:

S. NO.	PROVISION	PARTICULARS
A.	Section 7(1)(c) + Rule 15	Affidavit in form INC-9
C.	Section 7(1)(g) + Rule 17	·      Consent to act as Director in DIR-2 along with ID & Address proof ·      Interest in other firms & entities (reg. No, name, amt. & percentage of investment, Designation)
D.	Form DIR-2	Following information is also required from subscriber: - ·      Email ID & mobile no. ·      Occupation ·      PAN no. ·      No. companies in which acting as director including name of Companies in which acting as MD/WTD/CEO/CFO/CS/ manager ·      Particulars of membership & CP no., in case member of professional institute

OBTAIN FOLLOWING DOCUMENTS/INFORMATION FOR SITUATION OF REGISTERED OFFICE:

Situation of Registered Office: - The address of registered office may be intimated by the Promoters at the time of Incorporation or as per section 12 within maximum 15 days of Incorporation. In case address of registered office is not decided then address for correspondence needs to be given. The documents/information required in case the address of registered office is to be intimated at the time of Incorporation are: -

S. NO.	PARTICULARS
A.	Complete address of Police station in whose jurisdiction the registered office is situated
B.	Utility Bill, not older than 2 months old(electricity/gas/telephone/mobile bill)
C.	Proof  of registered office address(Conveyance/lease deed/rent agreement along with rent receipts)
D.	No objection certificate in case registered office is not taken on lease

STEP – IV: Fill the Information in Form:

Once all the above mentioned documents/ information are available. Applicant has to fill the information in the e-form “Spice” INC-32.

Features of SPICe (inc-32) form:

·         Maximum details of subscribers are SEVEN (7). In case of more subscribers, physically signed MOA & AOA shall be attaching in the Form.

·         Maximum details of directors are TWENTY (20).

·         Maximum THREE (3) directors are allowed for filing application of allotment of DIN while incorporating a Company.

·         By affixation of DSC of the subscriber on the INC-33 (e-moa) date of signing will be appear automatically by the form.

·         Applying for PAN / TAN will be compulsory for all fresh incorporation applications filed in the new version of the SPICe form.

·         In case of companies incorporated, with effect from the 26th day of January, 2018, with a nominal capital of less than or equal to rupees ten lakhs or in respect of companies not having a share capital whose number of members as stated in the articles of association does not exceed twenty, fee on INC-32 (SPICe) shall not be applicable

STEP – V: Preparation of MOA & AOA:

After proper filing of SPICE form applicant has to download the e-form INC-33 (MOA) and IN-34 (AOA) form the MCA site. After downloading of form fill all the information in the forms as per requirement of Table A to J of Schedule I.

After completely filing of the form affix DSC of all the subscribers and professional on subscriber sheet of the MOA & AOA.

STEP – VI: Fill details of PAN & TAN:

It is mandatory to mention the details of PAN & TAN in the Incorporation Form INC-32. Link to find out of Area Code to file PAN & TAN are given in Help Kit of SPICE Form.

STEP – VII: Submission of INC-32,33,34 on MCA-:

Once all the 3 forms ready with the applicant, upload all three documentas Linked form on MCA website and make the payment of the same.

STEP – VIII: Certificate of Incorporation-:

After the above forms are approved, a certificate of incorporation is issued by the Registrar of Companies in form INC 11 in electronic form and is mailed to the Company at its registered Email ID.

CAUTION TO BE TAKEN BY PROFESSIONALS

1.        Obtain engagement letter from subscriber: - As per certification in e-form DIR-12 & INC-22, a professional declares that he has been engaged for the purpose of certification Therefore it is advisable to obtain an engagement letter.

2.      Verification of original records pertaining to registered office: - As per certification in e-form INC-22 / SPICE, a professional declares that he has verified all the particulars(including attachments) from original records.

3.      Ensure all attachments are clear enough to read: - As per certification in e-form DIR-12 & INC-22, a professional declares that all attachments are completely and legibly attached.

4.      Ensure registered office of the company is functioning for the business purposes of the company: - - As per certification in e-form INC-22, a professional declares that he has personally visited the registered office.

5.      Take a declaration to the effect that all the original documents have been handed over after incorporation. Since as per section 7(4) copies all documents/information as originally filed should be preserved at the registered office of the company, therefore a professional should take a declaration while handing over the incorporation documents.

6.      MCA Circular 10/2014: - According to this circular ROC/RD in case of omission of material fact or submission of false/incomplete/ misleading information can after giving opportunity to explain refer the matter toe-governance division of MCA, which in turn may initiate proceedings under section 447 and/or ask the respective professional institute to take requisite disciplinary action.

OTHER FORMALITIES:

OTHER INCORPORATION FORMALITIES: After obtaining license under section 8, the company shall be formed as a normal company and the other formalities of incorporation shall be complied with.

REGISTRATION UNDER SECTION 80G: If a section 8 company gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction of 50% from his/its taxable income. The Company has to apply in Form10G to the Commissioner of Income Tax for such registration. Normally this approval is granted for 2-3 years but can be granted earlier depending upon the situations.

(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com). Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION