Section 8 Company registration or a Non- Profit Company registration is a company which operates with the objective to promote art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any other object, provided it intends to apply its profit if any, or other income in promoting its objects and intends to prohibit the payment of any dividend to its members..in simple terms, a Section 8 Company registration must promote a public cause and the proceeds generated by the entity must solely be used to support the stated public cause only. There are three structures available for the company being registered as Section 8 of the Companies Act 2013 to Section 25 of the Companies Act 1956, a trust or a Society. Section 8 Company is more popular in India as it is easy to register and manage this form of the company as compared to Trust or Society. Some examples of Section 8 Companies are the Federation of Indian Chambers of Commerce and Industry (FICCI), and confederation of Indian Industry (CII).
Just like any other private company registration, a Section 8 Company has its own separate legal entity different from its members. This company also has perpetual existence.
There are various tax exemptions that are provided to Section 8 Company, specifically to the donors who are contributing to Section 8 Company, they can claim the tax exemption against the donation they made to a Section 8 Company.: An exemption is provided to the Section 8 Company registration regarding the payment of stamp duty applicable for registration as applicable in case of other forms such as private limited or a public limited company registration.
The credibility of Section 8 Company registration is more than any other for of Non-Profit company as it is licensed by the Central Government. It has stringent regulations such as no change in MOA and AOA can be done at any stage in Section 8 Company. There is no suffix required to be added at the end of the name of Section 8 Company registration unlike other forms such as Private Ltd Company where you are required to put the words Private Limited at its end.
The first and foremost benefit of registering a Section 8 Company is that there is no minimum capital requirement unlike other entities such as public company, a private company, etc. the capital structure can be altered at any stage as the required for the growth of the section 8 company.
✔ Minimum 2 Shareholder
✔ Minimum 2 Director
✔ One of the directors must be an Indian resident
✔ No Minimum Share Capital requirement
✔Digital signature Certificate for 2 Promoters
✔The Director and shareholder can be the same person
✔Director Identification Number (DIN) for all directors
✔ DSC (Digital Signature Certificate) for director and shareholder
Name of Non-profit (Section 8) Company Registration is a crucial step for new company registration. Two proposed names in order of preference, objective/purpose of business activity along with statutory fees are submitted to MCA. The proposed name should be unique and shouldn’t have punctuation marks. In case MCA has any observation, then the word comes for resubmission, which delays the whole process. Once the name is approved, it is valid for 20 days (including weekends or other holidays), and all other formalities must be completed within this period.
Digital Signature is an online signature used for filing documents online. Digital Signature Certificate (DSC) is required for all shareholders and directors for Non-profit (Section 8) Company Registration. It can be applied in parallel with applying for name approval as there is no DSC requirement in the name application. If the director or shareholder of the Non-profit (Section 8) Company Registration already has DSC, this step can be skipped.
After getting DSC and name approval, the next step is to file forms- Spice + Part, Agile Pro, Spice MOA, Spice AOA, and INC 22 forms with MCA. These forms consist of information regarding Non-profit (Section 8) Company Registration such as registered office, authorized, paid-up capital, shareholding pattern, directors, shareholders details such as an address, education qualification, etc. Some of this information is required to be supported required proof like rent/title deed of registered office, PAN card, etc.
After submitting all the documents and getting verified by the Registrar of Companies (ROC), you will receive a Certificate of Incorporation within 7-12 days. This certificate of incorporation will act as a birth certificate for your company registration, and the company registration process ends here. The certificate of incorporation will consist of name, registered address, 21 digits alpha-numeric number Corporate Identity Number (CIN) approved by MCA, and notified on the registered companies.
After getting the Incorporation certificate for Non-profit (Section 8) Company Registration, a bank account needs to be opened in the name of your company. One needs to submit an incorporation certificate, MOA, AOA, and other necessary documents required by the bank. Before the commencement of business, proposed paid-up capital must be deposited with the bank, and INC-20A needs to be filled with MCA to get the certificate of commencement.
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No, it is not necessary since it has a perpetual existence and it could go on indefinitely until it accomplishes its objectives. Contact us Now.
The whole process of registration is online and you don’t have to be present in person. A scanned copy of documents will get uploaded on the document vault and our patron experts will carry out all registration process for you.
Any individual or organization can become a member of the Section 8 Company including NRIs.
Yes, it is essential to have a non-profit motive to incorporate a Section 8 Company.
Yes, the minimum requirement to incorporate a section 8 Company is 2 directors.
A Digital Signature Certificate (DSC) is the digital equivalent of physical papers or certificates required to sign the form electronically. Yes, as both directors need to sign various documents to incorporate a company, thus all the directors must have DSCs.