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Overview of Section 8 company registration

Overview of Section 8
company registration

A type of not-for-profit organisation registered in India under Section 8 of the Companies Act 2013 is known as a section 8 company. It is a bridge between a for-profit corporation and a non-profit organisation, allowing the latter to engage in economic activities in support of the former's charitable objectives.

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  • To register a Section 8 company, the following steps must be taken:

  • 1. Obtain Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs) for all directors.

  • 2. Choose a unique company name and conduct a name availability check with the Ministry of Corporate Affairs (MCA).

  • 3. Prepare the Memorandum of Association (MoA) and the Articles of Association (AoA) of the company.

  • 4. File the incorporation form (INC-32) along with the MoA and AoA, and the requisite fee, with the MCA.

  • 5. Obtain approval from the Registrar of Companies (RoC).

  • 6. Obtain the Certificate of Incorporation from the RoC once the company is registered.

  • 7. Obtain PAN and TAN for the company.

  • 8. Apply for 80G and 12A registrations if the company intends to apply for tax exemptions.

Benefit of section 8
company registration

There are several benefits of registering a Section 8 company in India:

Tax Exemptions:

Section 8 businesses are a desirable alternative for groups looking to advance charitable and philanthropic purposes since they qualify for tax deductions under the Income Tax Act.

Limited Liability:

Section 8 companies provide limited liability protection to its directors, making it a safer option for individuals looking to start a not-for-profit venture.

Legal Recognition:

A Section 8 company is a legally recognized entity and has the ability to enter into contracts, sue or be sued, and own property in its name.

Reputation:

Registration as a Section 8 company enhances the reputation of the organization and its credibility, as it demonstrates a commitment to transparency and accountability.

Fundraising:

Section 8 companies can engage in commercial activities to generate funds for their philanthropic goals, which provides a sustainable source of funding for the organization.

Easier Compliance:

Section 8 companies are subject to less stringent compliance requirements compared to other forms of non-profit organizations, making it easier to manage the organization.

Essential Forms to file for section 8 company registration-

Essential Forms to file for section 8 company registration-

The following forms are required to be filed for the registration of a Section 8 company in India:

INC-32 (Application for reservation of name) - To declare compliance with the provisions of the Companies Act, 2013.

INC-7 (Declaration of compliance) - To declare compliance with the provisions of the Companies Act, 2013.

MOA (Memorandum of Association) and AOA (Articles of Association) - To state the objects and regulations of the company.

INC-33 (Certificate of Incorporation) - To obtain a certificate of incorporation from the Registrar of Companies (ROC).

DIR-12 (Particulars of appointment of directors) - To provide details of the directors appointed in the company.

INC-22 (Notice of the situation of registered office) - To notify the RoC about the registered office of the company.

Form MSME-1 (Declaration of Micro, Small and Medium Enterprises) - To provide information about the company's status as a micro, small, or medium enterprise.

Document required for section 8 company registration

The following documents are required for the registration of a Section 8 company in India:

1. PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) of all directors.
2. DIN (Director Identification Number) of all directors.
3. Digital Signature Certificates (DSC) of all directors.
4. Proof of registered office address, such as a rent agreement or utility bill.
5. ID and address proof of all directors, such as a passport, voter ID, or driver's license.
6. Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
7. Resolution of the board of directors regarding the formation of the company.
8. Declaration of compliance with the provisions of the Companies Act, 2013.
9. Application for reservation of name, in Form INC-32.
10. Form MSME-1 (Declaration of Micro, Small, and Medium Enterprises) if the company is a micro, small, or medium enterprise.

Procedure of Section 8 company registration –

The procedure for the registration of a Section 8 company in India is as follows:

Step 1-Obtain DIN and DSC for all directors: All directors must obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC).

Step 2-Choose a unique name: Choose a unique name for the company and conduct a name availability check with the Ministry of Corporate Affairs (MCA).

Step3-Prepare the MOA and AOA: Prepare the Memorandum of Association (MOA) and the Articles of Association (AOA) of the company, which outline the objects and regulations of the company.

Step 4-File the incorporation form: File the incorporation form (INC-32) along with the MOA, AOA, and the requisite fee, with the MCA.

Step 5 -Obtain approval from the RoC: Once the incorporation form is filed, the RoC will approve the formation of the company.

Step 6-Obtain the Certificate of Incorporation: After obtaining approval from the RoC, the company will receive the Certificate of Incorporation.

Step 7 -Obtain PAN and TAN: Obtain PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) for the company.

Step 8 -Apply for tax exemptions: If the company intends to apply for tax exemptions under the Income Tax Act, it must apply for 80G and 12A registrations.

PSR Compliance Assistance

The process of registering a Section 8 company involves adhering to many requirements, preparing documents, and complying with pre-incorporation and post-incorporation compliances. Moreover, complying with specific MCA mandates is imperative to avoid incurring hefty penalties and late fees. This process can seem daunting and confusing without professional assistance. PSR Team provides expert service in the online registration process of one’s company on the MCA website. Our team of experts will assist you every step of the way in your journey to get your company registered.

Frequently Asked Questions(FAQ's)

  • 01. What is a Section 8 Company?
    A section 8 company is a form of non-profit organisation that was founded to advance the arts, sciences, education, commerce, social welfare, religion, charity, or any other worthwhile cause and aims to utilise its revenues or income to further these ends.
  • 03. What is the minimum number of members required to form a Section 8 Company?
    The minimum number of members required to form a Section 8 Company is two.
  • 05. What are the documents required for Section 8 Company registration?
    The documents required for Section 8 Company registration include PAN card and Aadhaar card of members and directors, passport size photographs, address proof of members and directors, and Memorandum of Association and Articles of Association.
  • 07. What is the capital requirement for Section 8 Company registration?
    There is no minimum capital requirement for Section 8 Company registration.
  • 02. What is the tax structure for Section 8 Company?
    A Section 8 Company is eligible for tax exemption under Section 12A and Section 80G of the Income Tax Act.
  • 04. Can a Section 8 Company be converted into a for-profit company?
    Yes, a Section 8 Company can be converted into a for-profit company subject to certain conditions and approvals from the concerned authorities.
  • 06. Can a Section 8 Company distribute profits or dividends to its members?
    No, a Section 8 Company cannot distribute profits or dividends to its members. Any profits or income earned by the company must be utilized towards the promotion of its objectives.

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