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Section 8 Company Registration

Section 8 Company

Section (8) companies refer to those companies whose aim is not earn profit, they are mainly established with the purpose of social welfare. According to the companies act 2013, section 8 companies can be formed either as Private Limited company, LLP or Public Limited Company. This company established for the promotion of art, commerce, science, sports, education, protection of environment, research, social welfare, religion and charity or any such other object. This company is not set up for the purpose of profit. If the company makes any profit, then its dividend is not distributed among the members. A non- profit organization can be registered as a society under the registrar of societies or as a trust.

Section (8) companies have to pay tax like other companies. The income tax act 1961 gives all categories equal treatment. Section 80 G offers income tax exemptions as incentives for donation made to charity organizations. The donations in section 80G are eligible for deduction of up to either 100% or 50%. Non -profit organizations can receive the deduction under 80GGA on donations made to scientific organizations for scientific research organizations and rural development.

If you are thinking of registering a Section 8 company then we can help you and it is a great idea for any start-up to start their new business with a Section 8 company.

Know the basics

Minimum Requirements

Shareholders

Minimum 2 Shareholders (These Shareholders can be the directors)

Directors

Minimum 2 Directors (At least one of these directors should be Resident of India)

Capital

No minimum capital required

Documents required for a sec 8 company

  • PAN Card is mandatory for registration of sec 8 company
  • Passport size photographs of all directors
  • Aadhar Card
  • Bank Statement 1st page (signated by the Bank)
  • NOC
  • Electricity Bill or Rent Agreement for residential proof
  • Digital Signature Certificate (DSC)

Procedure for Section 8 Company Registration

  • 1.Digital Signature Certificate (DSC)

    Get Digital Signature Certificate (DSC) of all directors and promoter

  • 2.Get directors identification number (DIN)

    The DIN is an essential document for company registration. The following documents are required for the DIN:

    • Electricity bill/ Bank statement/Gas bill/Mobile Bill
    • Copy of PAN self attested
    • Copy of Passport
  • 3. Name Approval

    For the registration of a non- profit organisation, it is mandatory to determine its name. First of all, some names have to be selected by the directors. This name should not be similar to any other company or firm name only then this name will be recognised.

  • 4. Selecting head office location

    First of all it is necessary to have a proper address for the registered office of the Section 8 Company. The registration of companies will send to the correspondence office address.

  • 5. Execution of company registration documents

    after the name of the company is approve the company corporation documents are executed by the promoters in the prescribed format.

  • 6. Submission of documents to the ROC

    after the memorandum of association (MOA) and article of association (AOA) are ready the company should be submitted to the rock centre for registration.

Advantages of a Section 8 Company

  • No minimum capital is required to set up this company
  • There is no restriction on transfer of ownership of these companies
  • Company’s existence is difference from its members. On a company can be sued by any creditor but not on its members.
  • This company can get more tax benefits than others. Section 80 G offers income tax exemptions as incentives for donation made to charity organizations.
  • These companies do not have to pay any stamp duty.
  • It is not mandatory for the Sec 8 company to write the words “Limited” or Private Limited” at the end of its name.

Frequently Asked Questions

  • Q1.CAN A SINGLE INDIVIDUAL FORM A SECTION 8 COMPANY?

    Get Digital Signature Certificate (DSC) of all directors and promoter

  • Q2.CAN BODY CORPORATE OR COMPANY BECOME DIRECTOR IN A SECTION 8 COMPANY?

    No, only Individual person can become a Director in a Section 8 company.

  • 3. WHAT IS THE MEANING OF RESIDENT IN INDIA?

    Resident in India means any person who has stayed in India for a total period of not less than 182 days in the previous financial year.

  • Q4. WHAT WORDS SHALL BE THE PART OF A SECTION 8 COMPANY NAME?

    The name of section 8 company shall include the words Federation, Chambers, foundation, Forum, Association, Confederation, council, and the like etc.

  • Q5. CAN I USE “PRIVATE LIMITED” OR “LIMITED” AT THE END OF THE SECTION 8 COMPANY NAME?

    No, words like “Private limited” or “Limited” should not be there in the company name, if it is a Section 8 Company.

  • Q6. CAN I PAY DIVIDEND OR OTHER BENEFITS IN MONEY TO ANY OF THE MEMBERS OF SECTION 8 COMPANY?

    No, Dividend or other benefits shall not be given by the Section 8 Company to any of its members.

  • Q7. IS IT NECESSARY TO HAVE 2 DIRECTORS FOR SECTION 8 COMPANY REGISTRATION?

    Yes, you need a minimum of two directors for a section 8 company registration.

  • Q8. IS IT NECESSARY TO HAVE A CHARITABLE OBJECT TO REGISTER A SECTION 8 COMPANY?

    Yes, it is necessary to have a non-profit motive to incorporate a Section 8 company.