Section 8 Company Registration
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Section 8 Company Registration
Many companies have charitable & non-profit objectives unlike making profits through trade & commerce. Such companies are referred to as Section 8 companies and are registered under Section 8 of the Companies Act, 2013.Section 8 companies areregistered with an objective ofpromoting research, social welfare, religion, charity, commerce, art, science, sports, education, and the protection of the environment or any such other object. It is important to note that the profits, if any, or the other income of such companies is applied only for promoting the objects of the company and no dividend is paid to its members.
Few examples of Section 8 companies registered are Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industries (CII). The objective of these companies is to promote growth of trade and commerce in India.
Process of Section 8 Company Registration
Obtain DIN & DSC
The first step is to obtain DSC & DIN of all the directors. Form DIR-3 needs to be filed to obtain DIN.
Name Approval
Application for name availability must be made in “Reserve Unique Name” or Run facility. The name of Section 8 Company shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council or Electoral Trust. Maximum two names can be proposed initially and one resubmission is allowed in RUN facility.
Application for License & COI
Application for License will be made along with MOA which must be in form INC-13 while there is no format prescribed for AOA. After that Certificate of incorporation (COI) has to be applied for.
Filing of SPICe Form
After receiving Central Government approval i.e approval of form INC-12, we go ahead with filing of form SPICe 32 with the RD-1 license and the name approval certificate & after that section 8 company becomes operative.
Advantages of Section 8 company registration
Tax Exemption
The donors who are contributing to Section 8 Companies, they can claim the Tax exemption against the donation under section 12AA and 80G of the Income Tax Act.
No Minimum Capital
There is a prescribed limit over section 8 companies for the minimum capital requirement unlike other entities such as public limited.
Credibility
A Section 8 Company has more credibility as compared to any other Non-profit organization structure like Trust or Society.
Flexible & Organised
Forming a section 8 company is an easy and organised process. There is no physical presence required at any stage.
Documents required for Section 8 Company Registration
- PAN Card of all the proposed directors.
- Aadhaar Card of all the proposed directors.
- Address Proof (Bank Statement, Electricity bill, telephone Bill). In case of foreign director, Passport is mandatory.
- Passport size Photographs of all the proposed directors.
- Business Address Proof
In case the office is an owned place Electricity Bill/ Water Bill/ Registry Copy
In case the office is in a rented property Rent agreement & NOC
Pre requirements for Section 8 Company Registration
- Minimum Directors -- 2 (Atleast 1 director shall be resident in India)
- Minimum Shareholders -- 2
Packages
Basic
What's included
- Section 8 Company Registration
- Digital Signature Certificate (2 Nos.)
- Certificate of Incorporation
- AOA/MOA
- PAN/TAN
- Expert Consultancy
Basic
What's included
- Section 8 Company Registration
- Digital Signature Certificate (2 Nos.)
- AOA/MOA
- PAN/TAN
- Certificate of Incorporation
- GST Registration
- Udyam Registration
- Expert Consultancy
Frequently asked questions
1. How much time is required for Section 8 company registration?
It takes around 25-30 days to register a Section 8 company with license.
2. What is the minimum capital requirement to start a Section 8 company?
There is no minimum capital requirement for incorporating a Section 8 Company in India. But whatever capital you choose, you must invest the same into company within 2 months.
3. Is only registration of section 8 company sufficient for availing income tax exemption?
No, only registration of section 8 company does not result into income tax exemption. As per section 12AA, an application is to be filed to the Income Tax Commissioner along with the necessary documents. If he is satisfied, the tax exemption can be granted to the company.
4. Can I convert my Section 8 Company into a private limited company?
Yes, you can convert it into a private limited by seeking approval from ROC.
5. Can the promoters of the company become its employees as well?
No, a promoter of a section 8 company can’t become its paid employee.
6. How many branches can be operated by a Section 8 Company?
It can open any number of branches as there is no specific restriction; however it is advised to open in limited numbers.
7. Can a Section 8 Company form a normal subsidiary company?
Yes, it can form a subsidiary company.