Incorporation of Section 8 Company

Under Indian law, 3 legal forms exist for NGO or Non-Profit Organizations:

  1. Trusts
  2. Societies
  3. Section 8 Companies

There are several exemption and benefits provided to NPO/NGO under section 8 of the Companies Act 2013.

Section 8 Company

ADVANTAGES OF SECTION 8 COMPANY

Separate Legal Entity

The Section 8 Company has distinct legal identity from its members just like other companies. It also has perpetual existence which means that the entry or exit of any member will not affect the operations in the company.

No Stamp Duty

The section 8 company are not required to pay stamp duty imposed on MOA or AOA of a company.

Exemptions to the donors

The donors who contribute or donate in the section 8 company are alsoeligible to get the tax exemption under section 12A and 80G of the Income Tax Act if the Section 8 Company is registered under the Income Tax Act, 1961 for 80G and 12A.

No Minimum Capital Requirement

There is no minimum capital limit mentioned for a Section 8 Company Registration Cost. The capital structure can be altered at any stage as per the growth requirements of the company. Therefore, it is implied that it can be incorporated without any share capital and later the funds can be arranged for carrying the business operations by donations or subscriptions from members and public. 

DOCUMENTS REQUIRED FOR REGISTERING SECTION 8 COMPANY

For Directors

  • PAN Card
  • Identity Proof

Anyone of the ID Proof Voter Card /Passport/ Driver’s License

  • Proof of Residential Address

Anyone of the Utility BillsBank Statement/Gas Bill/Telephone Bill/ Electricity Bill/ Mobile Bill.It should not be older than 2 months from the date of submission.

For Registered Office

  1. Electricity Bill/Gas Bill/ Mobile Bill/Telephone Bill

The Utility Bill should have the complete address of the registered office and it must not be older than 2 months from the date of submission to MCA.

  1. No Objection Certificate (NOC)

No objection certificate (NOC) must be issued by the person whose name is mentioned in the utility bill. Even if the company is on your own property, NOC is mandatory in all cases.

  1. Rental Agreement/ Lease Deed

If the property is on rent or lease to use the premises as the registered office for the company authorization from landlord is required

HOW TO INCORPORATE A SECTION 8 COMPANY?

Step 1:  Obtain DSC

DSC i.e., Digital Signature Certificate is the digital tool for signing various eForms and scanned documents. It is primarily used by the authorized signatory that is managers,directors, CEO of the company

Step 2:File SPICe+ Form PART A and PART B

The SPICe+ form is the application for the incorporation of the company. The company can be reserved in the Part A of the SPICe+ plus form. However, only one name can be declared for approval in this form.

Part B is for applying incorporation certificate along with other relevant forms.

Step 3:  Issue of Certificate

Once the application for incorporation is approved by the Registrar of Companies (ROC). They will issue the Certificate of Incorporation of the company.

IN CASE OF DEFAULT

If a company makes any default in complying with any of the requirements laid down in this section shall be punishable with fine which shall not be less than ten lakhs but can be extended to one crore rupees and the directors and every officer who is in default shall also be punishable with fine not less than twenty-five thousand rupees but can be extended to twenty-five lakhs.

Frequently Asked Questions (FAQs)

Q1. Who is authorized to issue license to Section 8 Companies?

Ans. ROC of respective jurisdictions are delegated with the powers of Central government to issue license to Section 8 Companies.

Q2. Can a One Person Company Registration(OPC) be incorporated as or convert into a Section 8 Company?

Ans. No. Rule 3 of the Companies (Incorporation) Rules, 2014 prohibits a one-person company to be incorporated as section 8 company or to convert into a Section 8 Company.

Want to Register a Section 8 Company?

At Compliance Calendar LLP, we offer to assist you in all the matters related to registration. Let our expert team handle the legal procedure. While you can concentrate on matters of business operations. If you have any query email us at info@ccoffice.in or call at 9988424211.

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