Section 8 Company Registration is one of the most popular NGO registration choices in India. The reason why it is gaining more popularity is that Section 8 NGO has got several tax benefits such as income tax exemptions, etc.
Hence, if anybody is willing to Start Section 8 Company in India is firstly required to obtain registration under Section 8 of the Companies Act, 2013. For Section 8 Company registration, it’s vital to understand the main object of the company.
Therefore, let’s first discuss the main objects and features of the Section 8 Company and then proceed on to the registration process.
What is a Section 8 Company?
Section 8 Company is a kind of NGO registered under Section 8 of the Companies Act, 2013. The main objective of Section 8 Companies includes the promotion of particular communities and working towards the welfare of others.
Such companies are formed with a charitable aim. The profits of these companies aren’t divided among any of its members. Instead, the profit earned is used for promoting the company’s object and making the company better.
What are its main objectives?
The primary motive of the Section 8 Company is to support one of the less talked areas of the country such as education, art, science, commerce, social welfare, protection of the environment, and more.
All these are done while keeping the interests of the public into consideration. In a nutshell, any company can function as a Section 8 Company if it works towards achieving the goal of social welfare, without any intention of gaining dividend or profit.
Significant Features of Section 8 Company in India
Section 8 Companies are loaded with several significant features. Those are as follows:
- Section 8 Company can never be treated as a small company by anybody;
- The members of the company are not liable for availing any profits or dividend of the company;
- The members of the company can utilize the profit or income only for promoting the company’s object;
- Nobody can incorporate Section 8 Companies using Form INC-29;
- The Central Government grants a special license for Section 8 Companies;
- Section 8 Companies aren’t required to use the suffix ‘Pvt. Ltd.’ or ‘Public Ltd.’ with its name as other companies do;
- According to Section 8 (2) of the Companies Act, 2013, Section 8 Companies can enjoy all the benefits provided to other limited companies and shall be subject to every obligation as others;
- These companies are governed by the Central Government. However, the power of the CG is provided to the ROC (Registrar of Companies).
Checklists for Section 8 Company Registration Online
For Section 8 Company Registration, the applicant needs to submit the following documents:
- Copy of PAN card of all the directors and shareholders of the company;
- Copy of Address Proof such as Driving License, Voter ID card or Passport, etc.
- Recent passport-sized photographs of every shareholder and director of the company;
- The latest utility bills of the registered office such as Electricity bill or Water Bill, etc.
- DIR-2 Form, consent to act as a director;
- Rent agreement, if the registered office is on rent;
- No-Objection Certificate from the Landlord;
- Details of the Directorship of the Directors if engaged in some other companies or LLP.
- Other documents, if asked by the concerned authority.
Several Form Requirements for Section 8 Company Registration
For registering a Section 8 Company in India, the applicant will require several forms as stated below:
|Forms required||Purpose of the Form|
|INC 1/RUN||For company name reservation|
|INC 7||Application for the company registration under Section 8|
|INC 9||An affidavit from every director and subscriber|
|INC 12||Application for the grant of license for operating the company as Section 8|
|INC 13||MOA of the company|
|INC 14||Declaration from a Chartered Account in practice|
|INC 15||Declaration from every entity filing the application|
|INC 16||License for company incorporation as Section 8|
|INC 22||For Registered Office|
|DIR 2||Consent to act as a Director|
|DIR 3||Application to ROC for obtaining DIN (Director Identification Number)|
|DIR 12||Appointment of Directors|
Step by Step Procedure for Section 8 Company Registration
The process of registering a Section 8 Company is very lengthy. Therefore, we recommend you hire a professional for the same. However, you can follow the registration process as we have described below:
Step 1: Acquire DSC
The very first step to Section 8 Company Registration is to acquire a Digital Signature Certificate (DSC) for the proposed directors of the company.
Step 2: File DIR-3 for DIN
Once you have obtained DSC, you need to file the DIR-3 Form for acquiring DIN (Director Identification Number) from the Registrar of Companies. If the ROC finds your application appropriate, it will issue the DIN.
Step 3: File RUN (Reserve Unique Name) for company’s name approval
Getting a company name approved is one of the most crucial tasks in company incorporation. Therefore, as soon as you have acquired DIN and DSC, apply for company’s name approval using RUN service. Here, you can propose a maximum of two names. Further, the ROC will approve one of the names depending on the availability and uniqueness of the name.
Step 4: File INC-12 Form with the ROC
After the ROC has approved the company’s name, you need to file INC-12 along with the following documents to the ROC:
- MOA and AOA of the company;
- Declaration from the practicing CA (Chartered Accountant);
- Declaration from every person filing the application;
- Assessed income & expenses for the next three years.
Step 5: The Grant of License under Section 8
After examining the documents and application form, the ROC will issue the license under Section 8 in INC-16 Form, if he finds everything true and valid.
Step 6: Filing of SPICe or INC-32 with the ROC
On the receipt of the license, the applicant requires filing SPICe INC-32 with the ROC for the company incorporation along with the required documents. Again, the ROC will verify the documents and application. If the registrar feels that the Form satisfies all the criteria, then he will issue the Certificate of Incorporation along with the Corporate Identity Number.
Although the Section 8 Company Registration process is quite complicated, one can get it easily registered if he/she holds all the required documents and files the application using correct forms. Even, after all this, you find the registration process a tedious task, then you must hire a professional.
One of the most crucial things to consider while opting for Section 8 Company incorporation is the company’s object. The benefits and dividend of the company will never get distributed among any of its members. Hence, the intention of each and every director of the section 8 company must be clear and free of any greed.
In case you have any queries regarding the same, you can contact Swarit Advisors.