Section 8 Company

How to Register a Section 8 Company in India?

A Non Profit Organization in India, registered under Companies Act 2013, as Section 8 Company with a non-profit motive. Objective of Section 8 Companies are promotion of arts, commerce, charity, education, protection of environment, science, social welfare, sports, research, religion and intends to apply its profits, if any, or other income in promoting its objects. It functions exactly like a limited company including all the rights and obligations that come with such a company.

Why register a Sec 8 company? and Section 8 of Companies Act 2013

The primary purpose of registering a company as a Section 8 Company is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports research, etc.

To incorporate a Section 8 Company, a minimum of two directors are required. Also, there is no requirement of minimum paid-up capital in the case of Section 8 Company.

In India, a non-profit organization can be registered under the Registrar of societies or as a Non-profit company under Section 8 of Companies Act 2013.

The profits of this company, if there are any, are applied towards promoting the objectives of the company and not distributed as dividends to its shareholders.

A Section 8 Company is the same as the Section 25 Company under the old Companies Act, 1956. As per the new Companies Act of 2013, Section 25 has now become Section 8.

Section 8 Company Registration Eligibility Criteria

  1. An Individual or HUF or limited Company is eligible to start a Section- 8 company registration in India.

       2.Two or more person who will act as a shareholder or Director of the company should fulfill all the requirements and compliances of the Section 8 Company  registration.

        3.At least one of the directors shall be a resident of India. However, a firm may be a member of the company registered under this section.

        4.The objective should be the promotion of sports, social welfare, the advancement of science and art, education and financial assistance to lower income groups.

        5.The surplus generated must be used for meeting the principal objective of the section 8 company only.

        6.Founders, members, and directors of the company cannot draw any remuneration in any form of cash or kind.

        7.No profit should be distributed among the members and director of the company directly or indirectly

        8.The company should have the clear vision and project plan for the next three years.

 

Process for Registering a Section 8 Company in India

Prepare DSC and file Name Approval

The very first step for Section 8 company registration is to prepare DSC. Apply for Digital Signature Certificate (DSC) as soon as possible.

Filing of Section 8 Incorporation Forms on MCA Portal

After getting approval from the regional director, we will proceed to file the section 8 company registration application with the requisite documents before ROC.

MOA and AOA file submission

Once you get the License, you need to draft the Memorandum of Association (MOA) and Article of Association (AOA) to file section 8 company registration applications.

PAN, TAN and Bank Account

You must have your PAN, TAN and bank account ready while going for Section- 8 Company registration in India.

Benefits of Section 8 Company Registration

  1. No minimum capital: There is no minimum capital requirement for a Section 8 Company Registration in India.
  2. Tax Benefits: There are numerous tax benefits under the Section 8 Company Registration in India.
  3. No Stamp Duty: No stamp duty is imposed on the incorporation of Section 8 Company in India as it is against the provision of the payment of stamp duty on the MOA and AOA of the private limited company.
  4. Separate Legal Identity: Section 8 Company registration has a separate legal entity. It acquires a distinct legal identity from its members.
  5. Credibility: Section 8 Company has more credibility than any other form of a charitable organization. It is under the strict provision of the Companies Act which requires a mandatory audit every year.
  6. Exemption to the donators: Under Section 80G, the exemption is granted to the donators if the section 8 company is registered under section 80G.

 Documents Required Section 8 Company registration online?

Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)

Scanned copy of Voter’s ID/Passport/Driver’s License

Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill

Scanned copy of Notarized rental agreement in English

Scanned copy of No-objection certificate from the property owner

Scanned copy of sale deed/property deed in English

How can we help in Registering your Section 8 Company in India?

The Sec 8 company registration process is completely online, so you don’t even have to leave your home to get your entity registered. At E-Taxwala, we complete the entire Section 8 company registration online within 14 days. Our Process-

  1. First we obtain the DSC for the proposed Directors of the Section 8 Company.
  2. We fill the Spice forms on MCA along with the drafting of MOA and AOA
  3. File Declarations is Form INC-14 and Form-INC-15.
  4. After we receive your approval, we will file the application with MCA.
  5. Receipt of Certificate of Incorporation and other related documents

E-Taxwala Section 8 Company Registration package includes:

  • DIN and DSC for two Directors
  • Drafting of MOA & AOA
  • Form INC-14 and INC-15 Declarations
  • Registration fees and stamp duty
  • Company Incorporation Certificate
  • Company PAN and TAN

Key points regarding the Section 8 Company

  • In India, an NGO can be registered under the Registrar of Societies or a Non-profit entity under the Section 8 Company of the Company Act, 2013.
  • The profit generated by the section 8 companies cannot be utilized to fulfilled objectives other than charitable purposes. Further, such profit cannot be allocated to the shareholders.
  • A section 8 company is similar to the Section 25 Company under the erstwhile Company Act, 1956. As per the prevailing company Act, Section 15 companies are now acknowledged as Section 8.
  • A Section 8 entity is bound to comply with the provisions of the Companies Act, 2013. In view of this, these entities are mandated to administer the books of account, file returns with ROCs.
  • Such companies have no right to alter the charter documents like AOA and MOA without the government’s consent. Further, they are also required to comply with the GST laws and IT Act.

Annual Compliances of Section 8 Company

The annual compliances of section 8 company are just like the other companies.

  • Conduct a minimum of two board meetings in a year
  • Maintenance of Books of Accounts
  • Preparation of financial statements
  • Mandatory audit report
  • Income tax return filing
  • Filing of financial statements in form AOC 4
  • An annual return is to be filed every year with other e- filing forms like MGT 7
  • Additional compliances to fulfil the registration like 12AA, 80G, etc

Section 8 Company FAQ’s

1. How many people are required to register a section 8 company Company?

A minimum of two people is required to register a section 8 company in India.

2. What are the requirements to be a Director?

The Director needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, even foreign nationals can be Directors in an Indian Section 8 Company.

3. Is an office required for starting a Section 8 Company?

An address in India where the registered office of the Company will be situated is required. The premises can be commercial/industrial/residential where communication from the MCA will be received.

4. Do I have to be present in-person to incorporate a Section 8 Company?

No, you will not have to be present at our office or appear at any office for the registration of a Section 8 Company. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.

5. What are the documents required for registration?

Identity proof and address proof are mandatory for all the proposed Directors of the Section 8 Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.

6. How long it will take to incorporate a Company?

E-Taxwala can incorporate a Section 8 Company for in 20-30 days. The time taken for registration will depend on the submission of relevant documents by the client and the speed of Government Approvals. To ensure speedy registration, please choose a unique name for your Company and ensure you have all the required documents prior to starting the registration process.

7. How long is the registration of the Company valid?

Once a Company is incorporated, it will be active and in existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and may be struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.

8. What is a Digital Signature Certificate?

A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Section 8 Company.

9. What is the Director Identification Number?

Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.

10. Can NRIs /Foreign Nationals be a Director in a Section 8 Company?

Yes, a NRI or Foreign National can be a Director in a Section 8 Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be a Resident India.