If you want to promote non-profit goals and create meaningful change in society, starting a Section 8 Company is a great option. Contact Registrationwala for assistance in Section 8 Company Registration and experience the true spirit of altruism.
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Section 8 Company Registration
Individuals aiming to work for social welfare quite often choose to register a section 8 company. This structure is registered under Companies Act 2013 like all other companies in India. However, this structure greatly differs from other companies in the sense that it functions as an NGO. This structure is specifically designed for achievement of certain non-profit objectives. Unlike trusts or societies, a sec 8 company operates with a corporate structure and offers better credibility, transparency and governance.
The Ministry of Corporate Affairs regulates section 8 company incorporation as well as compliance just as it does for other companies in India. Well-known organizations like Federation of Indian Chambers of Commerce and Industry and GiveIndia successfully demonstrate the impact and credibility associated with this structure.
Section 8 Companies play quite an indispensable role in propelling social and economic development in India. Need assistance in registering a section 8 co in India? Get in touch with our section 8 company registration consultants at Registrationwala.
A section 8 company is a business entity registered under the Companies Act, 2013. It is established with the objective of undertaking non-profit activities like promoting commerce, art, science, sports, education, research, social welfare, religion, charity, environmental protection, etc.
The purpose of this type of company is to do good for the society and not for self-profit or the personal gain of its members. Any profit that this company earns is reinvested to further its stated non-profit objectives and is not distributed dividends among members.
Below are the several benefits to register section 8 company in India:
A sec 8 company is a business entity that is established not to generate profits but to promote social welfare and public good. Because of this reason, the Government of India provides several tax benefits to such companies. However, to avail them, it is necessary to secure the 80G and 12A registration for section 8 companies in India.
To incorporate a sec 8 company, there is no limit on minimum capital. This is because of its charitable nature. To encourage more and more individuals to register such a company, the Government of India has made registration easier by removing the need for any minimum capital and reducing the registration costs.
Since there is no net worth requirement, the stamp duty is usually not applicable to incorporate a section 8 company in India. It ensures that the directors can register a company without the burden of the stamp duty requirements.
The sec 8 companies are highly credible and regulated. Because of this, they find it easier to build trust and secure donations from Indian and foreign entities. From the donations they secure, the sec 8 companies can promote their non-profit objectives.
The section 8 companies are governed by the rules specified in the Memorandum of Association. Thus, as long as the members adhere to the objectives specified in your MOA properly, managing the company would be smooth.
The name of a sec 8 co does not need to include the words “Limited” or “Private Limited.” As a result, it enjoys greater flexibility when it comes to deciding the name. A sec 8 co should end with words that reflect its purpose, such as Foundation, Association, Federation, Confederation, Chamber or Forum. This will allow it to have a more purpose-driven identity.
So, who can form a section 8 company in India? The answer is anyone. However, there are some regulatory criteria that you must first take care of. Thus, before you start the incorporation, you must meet the following eligibility criteria:
Once you meet the mentioned eligibility criteria, you can start gathering the documents for Section 8 Company Registration online.
Following are the documents required for company incorporation for each director/ shareholder to proceed with company registration online.
For Directors/Shareholders, the company registration documents are as follows:
For registered office, the company documents are as follows
Make sure that these section 8 company incorporation documents are uploaded in the correct format during the application section 8 company registration process.
Once you have the required documents in place, you must follow the prescribed process to incorporate a section 8 co. The procedure for incorporation of Section 8 Company involves the following steps:
The first step in the registration process is to choose a suitable name for your company. Compared to other business entities, the naming rules for a Section 8 co are pretty relaxed. For example, you are not required to include terms like “Section,” “8,” or “Company” in the name. However, it is important to ensure that the name is unique by checking its availability.
You should select a name that reflects your objectives and typically ends with words such as Foundation, Association, Federation, Forum or similar terms. In case you need professional assistance in choosing an appropriate name, you may reach out to Registrationwala.
The second step is to get the Digital Signature Certificate for your company’s Directors. This is an important part of the incorporation process as it is used to authenticate and digitally sign the documents submitted online during registration.
Apart from DSC, Director Identification Number (DIN) must also be secured for each and every director. For this, form DIR-3 needs to be filed with ROC.
MOA refers to Memorandum of Association. It is the document that details the information about the directors, the shareholders and the objectives of the section 8 co. For instance, if the company’s purpose is to educate children, the MOA should specify this.
Apart from drafting MOA, another document AOA needs to be drafted. AOA refers to Articles of Association. It is a document that governs the company’s day-to-day management, including director duties, voting rights and internal procedures.
The company name you decided on needs to be reserved with the MCA. For this, you need to file Part A of the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form.
In this step, you need to apply for a Section 8 license with the Registrar of Companies (ROC). For this, you must file an application using Form INC-12. Along with this form, attach the income/expenditure projections so you can showcase financial feasibility for charitable objectives.
For incorporation, Part B of SPICe+ needs to be filed. While filing this part, you need to attach the memorandum of association and articles of association drafted earlier. Make sure these documents align with the relevant rules and regulations.
Once the Registrar of Companies (ROC) receives your application, it’ll carefully examine it and verify all the information and documents submitted. If satisfied with the application, the ROC will issue Certificate of Incorporation, which includes the company’s official name as well as a corporate identity number (CIN).
After section 8 company registration, a sec 8 co needs to adhere to certain post-incorporation compliances to maintain its legal standing. Some of the key post-incorporation compliances are as follows:
Registrationwala provides end-to-end solutions for sec 8 company registration in Delhi and the rest of India. Our consultants are well-versed with the entire process of section 8 company registration in India, down to the minute details. Here are the services we offer for ensuring smooth section 8 co incorporation:
Meeting the initial company requirements
Company name research
Obtaining DSC and DIN
MOA and AOA drafting
Application filing
Following up with the Ministry of Corporate Affairs
If you want to work for the betterment of society, you should choose Section 8 company registration. The process of its formation is not easy. However, with the full-fledged assistance provided by Registrationwala, it can be made easy. Reach out to our team to initiate the process of section 8 incorporation in a hassle-free manner.
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A. No, they cannot be publicly traded companies. They are not authorized to issue shares or pay dividends to members.
A. There must be at least two directors in a sec 8 company if it is incorporated as a pvt ltd co. If the company is incorporated as a public ltd co, then at least two directors are required.
A. It all depends on your purpose. However, in most instances, a section 8 co is a much better choice, especially for funding purposes.
A. Yes, it can receive domestic donations in India. For receiving donations from foreign entities, it must have FCRA registration.
A. There is no concept of dividends under this structure.
A. Yes, our firm can help you with sec 8 company balance sheet format in excel. Furthermore, we can also help with auditing and other accounting requirements that you might have for your company.
A. A section 8 company must use form ITR-7 to file income tax returns. This ITR form must be filled out accurately and submitted to the Income Tax Department on an annual basis. If you need assistance in filing this form, you can connect with Registrationwala.
A. There are no restrictions on investing in shares of other companies, including for-profit companies. However, the profit gained from investment should still be used to undertake the non-profit tasks mentioned in the section 8 company’s Memorandum of Association.
A. The cost of obtaining the section 8 company license depends upon the type of activity you want to partake in through your organization. To know more, get in touch with our consultants.
A. No, such companies do not need to pay stamp duty on MOA and AOA.
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