Section 8 Company Registration in India

A Section 8 company is a company that is registered primarily for charitable or non-profit reasons. There are many options available for registering a non-profit organization, and a Section 8 company is one of them. Section 8 companies, being a corporate form of organization, are one of the most popular kinds of charitable/non-profit organizations. It is usually done to promote commerce, arts, science, sports, education, research, welfare, religion, charity, environmental protection, etc. Section 8 Profits of the company shall be applied only to promote its charitable objects and cannot be distributed to its members or shareholders.

Section 8 Company can be either a private or a public limited company and can be incorporated without any minimum paid-up capital.

The company's name can be included without the words "Limited" or "Private Limited, as the case may be. Section 8 Company can be started with at least 2 members/shareholders. It also gets various tax and compliance exemptions. Section 8 company, once registered, can operate throughout the country and is preferred by the government and businesses for providing grants and subsidies due to its strict compliance and transparency. Section 8 Company Registration is the registration of a not-for-profit organization under the Companies Act, 2013. Basically, as per the other two types of NGOs, trust and society, Section 8 Company has more advantages. In this article, we majorly caution about Section 8 company registration and highlight the documents required for its registration.

What is Section 8 Company Registration?

Section 8 Company is one type of NGO; this is registered under the Companies Act 2013 and is governed by the Ministry of Corporate Affairs. This class of NGO enjoys higher credibility with contributors and government departments than the other two classes.

Furthermore, Section 8 company registration is the sole online NGO registration process. When registering a company under section 8, there is no need to use words like 'Limited' or 'Pvt Limited' in their name, and there is no requirement regarding minimum capital.

These are Section 8 Company's main goals?

Section 8 The main objective of the company is to work for the welfare of society, which is less talked about. Such societies and less discussed areas include arts, commerce, science, social welfare, research, protection of the environment, sports, religion, etc.

Also, the prime objective of commencing a Section 8 company in India is to promote all such areas as mentioned herein above, keeping in view the public interest.

What are the functions to be performed by the company?

The Section 8 company performs different non-profit functions including:

• Promotes commerce, arts, research, education, and science
• Works for the social welfare of the people
• Donations for the needy
• Environment protection
• Utilizes his profits in promoting his company's objectives
• It forbids the payment of dividends to its associates

Process of Section 8 company registration in India:

The procedure of Section 8 Companies Act can be described in five effortless steps which are as follows:

Phase 1 - Obtain a DSC

A Digital Signature Certificate is used to sign the online form. All the directors must get the DSC to proceed in the process. If you already have DSC then you can ignore this step.

Phase 2 - Get a DIN

The Director Identification Number is again essential and mandatory compliance for obtaining the certificate of incorporation.

Phase 3 - Company name approval

Select a suitable name for your company and get it approved by filing Form INC-1 with the Registrar of Companies. You can provide a maximum of 6 names for approval. The approved name is valid for 60 days. Section 8 requires the company to incorporate words such as Association, Chambers, Foundation, Council, Forum, etc. depending on the company Rules of Incorporation 2014.

Phase 4 - Draft MOA and AOA

Draft the memo of association and articles of association and file it along with other documents in the ROC in Form INC 12. It must be signed by the customers of the memorandum. Take the help of experienced smart consultants to prepare a good Memorandum of Association that describes all your objectives well.

Phase 5 - Section 8 Application for issue of company registration license

File Form INC 12 with RoC for obtaining NGO Registration under the Companies Act, 2013 along with essential attachments like MOA, AOA, Confession by clients, List of Directors of the company, Income and Expense details.

Phase 6 - Filing SPICe Form INC-32 with ROC

After you have obtained Section 8 company registration, you will need to file SPICe INC-32 with the ROC for the incorporation process. In addition, you will need to attach the following documents:

• KYC of all directors
• An affidavit from each client and director of the company
• Declaration relating to deposits
• Letter of consent from all directors
• DIR-2 Form with proof of address as well as the identity of the directors
• Utility bills not older than two months
• Other documents, as required.

Once the ROC is satisfied with all the criteria, it will issue a Certificate of Incorporation (COI) along with a Corporate Identification Number (CIN).

Benefits of Inclusion of Section 8 Company in India

A Section 8 Company has lots of advantages in making it since it is a non-profit corporation. This kind of company is established to promote arts, commerce, education, charity, protection of the environment, sports, research, social welfare, religion, or any other helpful objective. Have a look at those critical benefits:

• Tax Exemptions: Section 8 Companies enjoy various tax exemptions under the Income Tax Act. This well mitigates the tax liability of the company, allowing more money to be pumped into achieving the company's goals.
• Credibility and Recognition: A Section 8 Company is duly recognized as a legal entity having a charitable object. This status boosts its creditworthiness and might facilitate obtaining financing and grants from government bodies, international organizations, and private donors.
• Limited Liability: Members' liabilities in a Section 8 Company are limited. It means that personal assets are secure and cannot be claimed in case of any financial liabilities or debts of the company.
• Perpetual Succession: A Section 8 Company enjoys its succession, meaning continuance even with a change in members or directors. This is to make sure that an organization is continued irrespective of members.
• Separate Legal Entity: Since a Section 8 Company is a separate legal entity, the Company can acquire, own, and dispose of property in its name. This gives it an organized framework for its operations and ensures continuity regardless of changes in membership.
• No Minimum Capital Requirement: There is no prescribed minimum capital requirement to form a Section 8 Company. This ensures that organizations do not have to bear the burden of raising a sizeable initial investment and hence allows the formation of organizations for the pursuit of various charitable activities.
• Ease of Transfer of Members: Ownership in a Section 8 Company can be easily transferred. The shares can be transferred without any extensive procedural requirements, facilitating smooth changes in management and ownership.
• Exemption from Stamp Duty: Section 8 Companies are exempt from paying stamp duty on the company's incorporation. This reduces the initial cost of setting up the organization.
• Funding and Donations: A Section 8 Company can receive donations and grants from both domestic and foreign sources. The law and legitimacy help raise funds for the company's work and projects.
• Compliance with CSR: Companies having to fulfill Corporate Social Responsibility (CSR) obligations compulsorily are seemingly willing to fund Section 8 Companies, considering their character of having been accorded the status of charitable organizations. This could be genuinely funded by large corporations.
• Governance and Transparency: Since the constitution of the Section 8 Company is under the Companies Act 2013, it is automatically governed by transparency and accountability in the activities conducted by the organization. This ensures that the organization's activities are conducted ethically, conforming to the law.
• Professional Management: The structuring of a Section 8 Company enables professional management and governance. This attracts a skilled and committed individual in the organization to improve its effectiveness and increase its impact.

Filinglounge: Your Trusted Partner for Section 8 Company Registration

Filinglounge will streamline the process of Section 8 Company registration, along with expert support, real-time updates, and complete transparency at a great price never seen before.

Our Services Include:

• Consultation and Name Approval: We provide expert consultation to understand your objectives and assist in selecting an appropriate and unique name for your company.
• Documentation Preparation: Our team prepares all necessary documents, including the Memorandum of Association (MoA) and Articles of Association (AoA), ensuring compliance with legal requirements.
• DIN and DSC Application: We assist in obtaining the Director Identification Number (DIN) and Digital Signature Certificate (DSC) for the proposed directors.
• Filing of Forms:We handle the filing of various forms with the Registrar of Companies (RoC), including Form INC-12 for obtaining a license under Section 8.
• Follow-up and Approval: Our experts follow up with the RoC and other authorities to ensure timely approval and resolve any queries or issues that may arise.
• Post-registration Compliance: We offer ongoing compliance support, ensuring your company adheres to all legal and regulatory requirements.

Get Started Today!

Ready to make a difference? Contact Filinglounge today to begin the process of registering your Section 8 Company. Our experts are here to guide you every step of the way, ensuring a seamless and successful registration experience.