Section 8 Company Registration
About Section 8 Company Registration
Registration of section 8 Company
At A2Z FINEDGE, we provide exceptional taxation compliance and filing services tailored for individuals and organizations seeking professional guidance. With a team of seasoned experts including Chartered Accountants (CAs), Company Secretaries (CSs), MBAs, lawyers, and advocates, we ensure a smooth and efficient registration process. Here, we present an exhaustive guide to understanding and registering a Section 8 Company.
What is a Section 8 Company?
A Section 8 Company is a legal entity formed under the Companies Act, 2013, with the primary objective of promoting commerce, arts, science, sports, education, research, social welfare, religion, charity, environmental protection, or similar purposes. Unlike other companies, it operates without the intention of earning profits, and any surplus generated is reinvested to further its objectives.
These companies are granted certain exemptions under the Companies Act due to their non-profit nature. They cannot distribute dividends to their members, making them ideal for organizations aiming to contribute to societal development.
Key Points About Section 8 Company
- Non-Profit Nature: Section 8 Companies exist to promote social and charitable causes rather than generating profits.
- Limited Liability: The liability of its members is limited to their shareholding.
- Separate Legal Entity: It enjoys a distinct legal identity, allowing it to own property, incur debts, and enter into contracts independently.
- Perpetual Succession: The company’s existence is unaffected by changes in membership or leadership.
- No Minimum Share Capital: Unlike other companies, Section 8 Companies do not require a minimum share capital.
- Tax Benefits: These companies often enjoy tax exemptions under the Income Tax Act, 1961, subject to compliance with prescribed regulations.
- Name Usage: Section 8 Companies do not need to use “Private Limited” or “Limited” in their name.
Mandatory Legal Requirements for Section 8 Company
To establish and operate a Section 8 Company, the following legal requirements must be fulfilled:
- Central Government Approval: Obtain a license under Section 8 of the Companies Act, 2013, from the Central Government, which validates the company’s objectives and operations.
- Minimum Membership and Directors:
- A minimum of two members and two directors for a private company.
- A minimum of seven members and three directors for a public company.
- Directors and members can be the same individuals.
- No Profit Distribution: Profits or surplus generated by the company must be strictly utilized to advance its objectives. Distribution of dividends to members is prohibited.
- Documentation Requirements:
- A Memorandum of Association (MoA) detailing the objectives.
- An Articles of Association (AoA) outlining the operational guidelines.
- Declaration in Form INC-14 and INC-15 stating compliance with Section 8 provisions.
- Digital Signature Certificate (DSC): Mandatory for all directors and authorized signatories to authenticate digital filings.
- Director Identification Number (DIN): All proposed directors must obtain a DIN issued by the Ministry of Corporate Affairs (MCA).
- Unique Name Approval: Reserve a unique name for the company through the RUN (Reserve Unique Name) service to reflect its charitable or non-profit nature.
- Audit and Compliance:
- Conduct annual audits of financial statements.
- Maintain accurate books of accounts as per the Companies Act guidelines.
- Submit annual returns and financial statements to the Registrar of Companies (RoC).
- Prohibition of Activities:
- The company cannot engage in activities unrelated to its objectives.
- It cannot declare or distribute profits to its members or directors.
- Tax Registration and Compliance:
- Obtain a PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number).
- Apply for tax exemptions under Sections 12A and 80G of the Income Tax Act for donations and grants.
- Registered Office Requirements:
- A valid registered office address is mandatory for incorporation.
- Submit address proof, NOC from the property owner, and utility bills not older than two months.
- Licensing and Reporting:
- The company must renew its Section 8 license periodically as prescribed.
- File Form AOC-4 for financial statements and MGT-7 for annual returns every financial year.
- Meetings and Governance:
- Conduct regular board meetings as per the requirements of the Companies Act.
- Ensure proper recording of minutes for all meetings.
- Conversion and Closure:
- Conversion to another company type requires Central Government approval.
- Closure of the company must comply with Section 8 guidelines and MCA regulations.
Advantages of a Section 8 Company
- Tax Exemptions: Significant tax benefits are available under the Income Tax Act for non-profit entities.
- Credibility: Being licensed by the Central Government enhances the credibility and trustworthiness of the organization.
- Funding Opportunities: Easier access to grants and donations from government bodies, corporate entities, and international organizations.
- Limited Liability Protection: Members’ personal assets are protected against company liabilities.
- Legal Exemptions: Exemptions from certain procedural and compliance requirements under the Companies Act.
- No Stamp Duty: Exemption from stamp duty for incorporation documents.
- Perpetual Existence: The company continues to operate irrespective of changes in its membership.
- Professional Management: Structured operations with a formal board of directors enhance efficiency and governance.
Documents Required for Section 8 Company Registration
- Directors and Shareholders:
- PAN Card
- Aadhaar Card
- Passport (for foreign nationals)
- Recent Passport-sized Photograph
- Address Proof (Bank Statement, Electricity Bill, etc.)
- Registered Office:
- Rent Agreement (if rented)
- Utility Bill (not older than 2 months)
- NOC from the property owner
- Company-Specific Documents:
- Memorandum of Association (MoA) detailing the objectives of the company
- Articles of Association (AoA) outlining operational guidelines
- Declaration from Directors (Form INC-15)
Eligibility Criteria for Section 8 Company Registration
- Purpose: The company must aim to promote charitable or non-profit objectives as defined under Section 8 of the Companies Act.
- Number of Members: A minimum of two members for a private company and seven for a public company.
- Directors: At least two directors (private) or three directors (public).
- No Profit Distribution: Profits must solely be utilized to further the company’s objectives.
- Legal Compliance: The company must adhere to the guidelines prescribed by the Ministry of Corporate Affairs.
Step-by-Step Registration Process
- Obtain Digital Signature Certificate (DSC): All proposed directors must have a DSC to authenticate digital filings. You can apply for a DSC through a certified agency by providing identity and address proof.
- Apply for Director Identification Number (DIN): Each director must obtain a DIN by filing Form DIR-3 with the Ministry of Corporate Affairs. This requires submitting personal details, proof of identity, and address along with the DSC.
- Reserve a Unique Company Name: Use the RUN (Reserve Unique Name) service on the MCA portal to reserve a unique name for the company. Ensure the name reflects the non-profit nature of the organization and complies with naming guidelines.
- Draft Memorandum and Articles of Association: Prepare the MoA and AoA detailing the company’s objectives, operational structure, and governance framework. These documents must align with the requirements for Section 8 Companies.
- File License Application: Submit Form INC-12 to apply for a license under Section 8. Attach the MoA, AoA, and declarations from directors (INC-14 and INC-15) confirming adherence to the objectives and compliance with the Companies Act.
- Incorporation Filing: File the SPICe+ Form along with the approved license, MoA, AoA, and supporting documents. This step also includes applying for the company’s PAN and TAN.
- Verification and Approval: The Registrar of Companies (RoC) reviews the application and, upon satisfaction, issues the Certificate of Incorporation along with the Section 8 license.
- Post-Incorporation Compliance:
- Open a bank account in the name of the company.
- Apply for tax exemptions under Sections 12A and 80G of the Income Tax Act if eligible.
- Ensure regular compliance by filing annual returns and financial statements with the RoC.
Frequently Asked Questions (FAQs)
- Can a Section 8 Company generate revenue?
Yes, but all revenue must be reinvested into activities aligned with its objectives.
- Can foreign nationals be directors in a Section 8 Company?
Yes, foreign nationals can be directors, provided they fulfill the eligibility requirements.
- Is there a restriction on the number of directors?
No, but the minimum requirement is two for private companies and three for public companies.
- Can a Section 8 Company convert to a regular company?
Yes, but it requires approval from the Central Government and compliance with specific conditions.
- Are donations to a Section 8 Company tax-deductible?
Yes, donations may qualify for tax deductions under Section 80G of the Income Tax Act, subject to eligibility.
Why Choose A2Z FINEDGE?
- Expert Team: Our team of CAs, CSs, MBAs, and legal professionals ensures a smooth registration process.
- End-to-End Solutions: From documentation to post-registration compliance, we handle everything.
- Transparent Process: No hidden charges; we keep you informed at every stage.
- Timely Delivery: We prioritize efficiency to get your company up and running quickly.
- Continued Support: Our services extend beyond registration to include ongoing compliance and advisory assistance.
Get Started with A2Z FINEDGE Today!
Take the first step toward securing your business’s future with A2Z FINEDGE’s Section 8 Company Registration Services. Let us handle the complexities while you focus on growing your dream business.
A2Z FINEDGE – Simplifying Compliance, Empowering Businesses!
Required Documents
- PAN Card
- Aadhar Card
Section 8 Company Registration
About Section 8 Company Registration
Registration of section 8 Company
At A2Z FINEDGE, we provide exceptional taxation compliance and filing services tailored for individuals and organizations seeking professional guidance. With a team of seasoned experts including Chartered Accountants (CAs), Company Secretaries (CSs), MBAs, lawyers, and advocates, we ensure a smooth and efficient registration process. Here, we present an exhaustive guide to understanding and registering a Section 8 Company.
What is a Section 8 Company?
A Section 8 Company is a legal entity formed under the Companies Act, 2013, with the primary objective of promoting commerce, arts, science, sports, education, research, social welfare, religion, charity, environmental protection, or similar purposes. Unlike other companies, it operates without the intention of earning profits, and any surplus generated is reinvested to further its objectives.
These companies are granted certain exemptions under the Companies Act due to their non-profit nature. They cannot distribute dividends to their members, making them ideal for organizations aiming to contribute to societal development.
Key Points About Section 8 Company
- Non-Profit Nature: Section 8 Companies exist to promote social and charitable causes rather than generating profits.
- Limited Liability: The liability of its members is limited to their shareholding.
- Separate Legal Entity: It enjoys a distinct legal identity, allowing it to own property, incur debts, and enter into contracts independently.
- Perpetual Succession: The company’s existence is unaffected by changes in membership or leadership.
- No Minimum Share Capital: Unlike other companies, Section 8 Companies do not require a minimum share capital.
- Tax Benefits: These companies often enjoy tax exemptions under the Income Tax Act, 1961, subject to compliance with prescribed regulations.
- Name Usage: Section 8 Companies do not need to use “Private Limited” or “Limited” in their name.
Mandatory Legal Requirements for Section 8 Company
To establish and operate a Section 8 Company, the following legal requirements must be fulfilled:
- Central Government Approval: Obtain a license under Section 8 of the Companies Act, 2013, from the Central Government, which validates the company’s objectives and operations.
- Minimum Membership and Directors:
- A minimum of two members and two directors for a private company.
- A minimum of seven members and three directors for a public company.
- Directors and members can be the same individuals.
- No Profit Distribution: Profits or surplus generated by the company must be strictly utilized to advance its objectives. Distribution of dividends to members is prohibited.
- Documentation Requirements:
- A Memorandum of Association (MoA) detailing the objectives.
- An Articles of Association (AoA) outlining the operational guidelines.
- Declaration in Form INC-14 and INC-15 stating compliance with Section 8 provisions.
- Digital Signature Certificate (DSC): Mandatory for all directors and authorized signatories to authenticate digital filings.
- Director Identification Number (DIN): All proposed directors must obtain a DIN issued by the Ministry of Corporate Affairs (MCA).
- Unique Name Approval: Reserve a unique name for the company through the RUN (Reserve Unique Name) service to reflect its charitable or non-profit nature.
- Audit and Compliance:
- Conduct annual audits of financial statements.
- Maintain accurate books of accounts as per the Companies Act guidelines.
- Submit annual returns and financial statements to the Registrar of Companies (RoC).
- Prohibition of Activities:
- The company cannot engage in activities unrelated to its objectives.
- It cannot declare or distribute profits to its members or directors.
- Tax Registration and Compliance:
- Obtain a PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number).
- Apply for tax exemptions under Sections 12A and 80G of the Income Tax Act for donations and grants.
- Registered Office Requirements:
- A valid registered office address is mandatory for incorporation.
- Submit address proof, NOC from the property owner, and utility bills not older than two months.
- Licensing and Reporting:
- The company must renew its Section 8 license periodically as prescribed.
- File Form AOC-4 for financial statements and MGT-7 for annual returns every financial year.
- Meetings and Governance:
- Conduct regular board meetings as per the requirements of the Companies Act.
- Ensure proper recording of minutes for all meetings.
- Conversion and Closure:
- Conversion to another company type requires Central Government approval.
- Closure of the company must comply with Section 8 guidelines and MCA regulations.
Advantages of a Section 8 Company
- Tax Exemptions: Significant tax benefits are available under the Income Tax Act for non-profit entities.
- Credibility: Being licensed by the Central Government enhances the credibility and trustworthiness of the organization.
- Funding Opportunities: Easier access to grants and donations from government bodies, corporate entities, and international organizations.
- Limited Liability Protection: Members’ personal assets are protected against company liabilities.
- Legal Exemptions: Exemptions from certain procedural and compliance requirements under the Companies Act.
- No Stamp Duty: Exemption from stamp duty for incorporation documents.
- Perpetual Existence: The company continues to operate irrespective of changes in its membership.
- Professional Management: Structured operations with a formal board of directors enhance efficiency and governance.
Documents Required for Section 8 Company Registration
- Directors and Shareholders:
- PAN Card
- Aadhaar Card
- Passport (for foreign nationals)
- Recent Passport-sized Photograph
- Address Proof (Bank Statement, Electricity Bill, etc.)
- Registered Office:
- Rent Agreement (if rented)
- Utility Bill (not older than 2 months)
- NOC from the property owner
- Company-Specific Documents:
- Memorandum of Association (MoA) detailing the objectives of the company
- Articles of Association (AoA) outlining operational guidelines
- Declaration from Directors (Form INC-15)
Eligibility Criteria for Section 8 Company Registration
- Purpose: The company must aim to promote charitable or non-profit objectives as defined under Section 8 of the Companies Act.
- Number of Members: A minimum of two members for a private company and seven for a public company.
- Directors: At least two directors (private) or three directors (public).
- No Profit Distribution: Profits must solely be utilized to further the company’s objectives.
- Legal Compliance: The company must adhere to the guidelines prescribed by the Ministry of Corporate Affairs.
Step-by-Step Registration Process
- Obtain Digital Signature Certificate (DSC): All proposed directors must have a DSC to authenticate digital filings. You can apply for a DSC through a certified agency by providing identity and address proof.
- Apply for Director Identification Number (DIN): Each director must obtain a DIN by filing Form DIR-3 with the Ministry of Corporate Affairs. This requires submitting personal details, proof of identity, and address along with the DSC.
- Reserve a Unique Company Name: Use the RUN (Reserve Unique Name) service on the MCA portal to reserve a unique name for the company. Ensure the name reflects the non-profit nature of the organization and complies with naming guidelines.
- Draft Memorandum and Articles of Association: Prepare the MoA and AoA detailing the company’s objectives, operational structure, and governance framework. These documents must align with the requirements for Section 8 Companies.
- File License Application: Submit Form INC-12 to apply for a license under Section 8. Attach the MoA, AoA, and declarations from directors (INC-14 and INC-15) confirming adherence to the objectives and compliance with the Companies Act.
- Incorporation Filing: File the SPICe+ Form along with the approved license, MoA, AoA, and supporting documents. This step also includes applying for the company’s PAN and TAN.
- Verification and Approval: The Registrar of Companies (RoC) reviews the application and, upon satisfaction, issues the Certificate of Incorporation along with the Section 8 license.
- Post-Incorporation Compliance:
- Open a bank account in the name of the company.
- Apply for tax exemptions under Sections 12A and 80G of the Income Tax Act if eligible.
- Ensure regular compliance by filing annual returns and financial statements with the RoC.
Frequently Asked Questions (FAQs)
- Can a Section 8 Company generate revenue?
Yes, but all revenue must be reinvested into activities aligned with its objectives.
- Can foreign nationals be directors in a Section 8 Company?
Yes, foreign nationals can be directors, provided they fulfill the eligibility requirements.
- Is there a restriction on the number of directors?
No, but the minimum requirement is two for private companies and three for public companies.
- Can a Section 8 Company convert to a regular company?
Yes, but it requires approval from the Central Government and compliance with specific conditions.
- Are donations to a Section 8 Company tax-deductible?
Yes, donations may qualify for tax deductions under Section 80G of the Income Tax Act, subject to eligibility.
Why Choose A2Z FINEDGE?
- Expert Team: Our team of CAs, CSs, MBAs, and legal professionals ensures a smooth registration process.
- End-to-End Solutions: From documentation to post-registration compliance, we handle everything.
- Transparent Process: No hidden charges; we keep you informed at every stage.
- Timely Delivery: We prioritize efficiency to get your company up and running quickly.
- Continued Support: Our services extend beyond registration to include ongoing compliance and advisory assistance.
Get Started with A2Z FINEDGE Today!
Take the first step toward securing your business’s future with A2Z FINEDGE’s Section 8 Company Registration Services. Let us handle the complexities while you focus on growing your dream business.
A2Z FINEDGE – Simplifying Compliance, Empowering Businesses!
Required Documents
- PAN Card
- Aadhar Card