Section 8 Companies are those companies that come into existence for promoting commerce, art, science, sports, education, etc. these companies serve as a non-profit organization but for its incorporation, a procedure is required.
Procedure of incorporation of Section 8 company is:
- Name Approval: The first step is to get the name approved by the registrar of companies. The name should not be in existence or used by any other company or firm. An application in eForm INC1 is to be made for the approval of the name.
- The memorandum and Articles of Association: After the approval of the name, it is valid for 60 days within which the company has to compile the two most important documents for registration that is the memorandum and articles of association.
- Filing of forms: The eForm INC 12 is to be filed with the registrar of companies along with the following documents which are: Memorandum of association and articles of association.
- A declaration of confirming the application signed by the company secretary in practice on the non-judicial stamp paper of the prescribed value.
- A list of the names, addresses, description, and occupations of the promoters and the board of directors of the company.
- A statement indicating the details of the assets and liabilities of the company.
- An estimate of future income and expenditure of the proposed company, specifying the source of the income and object of the expenditure.
- A statement giving a brief description of the work.
- A declaration in the prescribed form on non-judicial stamp paper by each person making an application.
- Clarifications: After all the papers are properly submitted and reviewed by the registrar, the registrar can ask for certain clarifications which are to be answered by the holder of power of attorney. After certain justification and inquiry, if the registrar feels satisfied he may issue the license under section 8 and then the applicant can file incorporation documents by filing certain forms.
- Certificate of Incorporation: Once the certificate is issued by the registrar, the company is deemed to be incorporated from the date of incorporation.
- Time Frame: In completing this whole process, it can take if done on a fast basis of approximately 25 working days.