Section 8 Company Registration
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How to Register a Section 8 Company in India?
Today, the entire Section 8 company registration process and other regulatory filings are paperless; documents are filed electronically through the MCA website and is processed at the Central Registration Centre (CRC).
Section 8 Company Registration process is completely online. Upon completing all registration formalities, the Registrar of Companies issues a digitally signed Certificate of Incorporation (COI). Electronic certificates issued by the ministry can be verified by all stakeholders on the MCA website itself.
Incorporating a Section 8 Company is a systematic process of collection and submission of details required as per the requirements of the Companies Act 2013 and as per the process defined by the Ministry of Corporate Affairs from time to time. Management of the process requires in-depth knowledge of legal requirements and not to mention, practical experience of the same
Section 8 Company Name Approval
Simultaneous to the Digital signature application processing, an application for name approval can be initiated for the Section 8 Company to the MCA.
The name of a Section 8 Company must end with the words like Foundation, forum, association, federation, chambers, council, electoral trust. Etc.
The Name approval process can be completed within with24-72 hours.
Memorandum of Association and AOA (Articles of Association)
They are drafted after obtaining the name approval and other documents included in INC12 filed with the ROC.
It is necessary to sign and mention his name, description, address, and occupation in the MOA and AOA subscription.
It is necessary to have one witness present who will attest the signature.
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.
Procedure for registration of Section 8 Company
1. Application for name availability in form RUN:
Application for name availability must be made in “RUN” facility. The name of Section 8 Company shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust, and the like etc. One can propose maximum 2 names at a time and 1 resubmission is allowed in RUN facility. Fees for RUN is Rs. 1000/-. It is advisable to attach the object clause of the proposed company. Name once approved is valid for 20 days.
2. Getting Digital Signatures of First Directors:
The next step is to get class 3 digital signatures of first subscribers and directors which are required for filing incorporation form with the ROC.
3. Filing of SPICe 32 Form
After getting proposed name approval, one may go ahead with filing of form SPICe 32.
Attachments of SPICe 32:
The following are the documents which are required to be attached with the SPICe form for incorporation of Section 8 Company.
1. Memorandum of Association in Form INC-13;
2. Articles of Association; (No Specified format)
3. Declaration in Form INC-14 by CS/CA/CWA in practice, that the draft MOA & AOA have been drawn up in conformity with the provisions of Section 8 and rules made thereunder and that all the requirements of the Act and the rules made thereunder relating to registration of the company under Section 8 and matters incidental or supplemental thereto have been complied with;
4. Declaration by each of the persons making the application in Form INC-15;
5. An estimate of the future annual income and expenditure of the company for next three years;
6.Name Approval Letter received from CRC;
7. Consent and Declaration by first Directors in Form DIR-2;
8. Consent and Declaration by first Directors in Form DIR-2;
9. PAN card of first directors and subscribers;
10. Aadhar card of first directors and subscribers;
11. Proof of Registered office like Sale Deed/Lease Deed/Rent Agreement etc;
12. Latest Utility Bill of Registered office like Electricity Bill;
13. NOC of owner if registered office is taken on rent/lease.
SPICe 33 and 34 i.e e-MOA and e-AOA can’t be used for Section 8 Company. Section 8 companies are mandatorily required to file MOA and AOA as pdf attachments to SPICe-32.
Benefits of Section 8 Company Registration
Distinct Legal Identity: Section 8 Company is a separate legal entity and is different from it’s members. The Company has perpetual existence. Along with having organized operations and greater flexibility.
Zero Stamp Duty: A Section 8 Company is exempt from the requirement of paying stamp duty on the MoA and AoA of the private or public limited company, which is applicable for registration of other kinds of company structures.
No Minimum Capital Requirement: o minimum capital limit has been mentioned for a Section 8 Company in India. And the capital structure can be altered at any stage as per the growth requirements of the company. This implies that it can be formed without any share capital. The funds necessary for carrying the business operations can be brought, later, in the form of donations and/or subscriptions from members and the general public.
Name: Section 8 Company is not required to suffix “Public Limited or Private Limited”, next to it’s legal name. It can be registered with names such as “Association, Society, Council, Club, Charities, Foundation, Academy, Institute, Organisation, and Federation”.
CARO: Requirements of Companies Auditor’s Report Order or CARO do not apply to this type of company.
Tax Benefits: For Section 8 Companies in India, many tax benefits are granted.
Credibility: Section 8 Companies are more reliable than all other forms of charitable organizations. They are governed by the Companies Act and are regulated strictly. Such as the requirement of a mandatory annual audit, and both the “MOA and AOA” cannot be altered at any stage or situation. The rules on managing the profits and losses of the company make these companies trustworthy.
Exemption to the donors: Those donating to a Section 8 Company are eligible for tax exemptions u/s 12A and 80G of the Income Tax Act.
Membership: A registered partnership firm can become a member in it’s individual capacity and obtain Directorship.
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 RegisterKaro, 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
RegisterKaro 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