In India, the Section 8 Company is regulated by the Indian Companies Act, 2013, and therefore the rules that are created under that and it is run by the Ministry of Corporate Affairs, Government of India
Section 8 Company is a company that is incorporated for charitable or not-for-profit commitments. A Section 8 Company is, a similar structure to Trust or Society; with the exception that a Section 8 Company gets registered under the Central Government’s “Ministry of Corporate Affairs (MCA)” whereas, other entities like Societies & Trusts are registered under State Government regulations. It has numerous advantages compared to Society or Trust like better recognition and better legal standing. Section 8 company also has greater reliability amongst donors, government departments, and other investors.
Procedure for Incorporation of Section 8 Company
- Step - 1: Application for name reservation via RUN
The Section 8 Company application for name reservation should be requested in the RUN (Reserve Unique Name) facility. You can propose two names at a time and one resubmission is allowed in the RUN facility. The fee for RUN is Rs. 1000/-. it's best to connect the item clause of the projected company.
- Step - 2: Preparation of Memorandum of Association and Articles of Association
A Memorandum of association is that the charter of the corporate and defines the scope of its activities. writing of association of the corporate could be a document that regulates the inner management of the corporate.
Memorandum of Association of Section eight Company should be in form INC-13 whereas there's no format prescribed for Articles of Association for Section eight Company. One will adopt table F provisions.
Memorandum and articles of association of the corporation shall be signed by every member and shall mention his name, address, description and occupation, if any, within the presence of a minimum of one witness Who shall attest the signature and shall likewise sign and add his name, address, description and occupation.
- Step - 3: Application in type INC-12
After approval of name by CRC, one will create an application in type INC-12 to the Registrar for a license underneath sub-section (1) of section 8. Fees for INC-12 is Rs. 2,000/-
- Step - 4: Note of Association in type INC-13;
- Step - 5: Articles of Association; (No specified format)
- Step - 6: Declaration in type INC-14 by CS/CA/CWA in follow, that the draft note and articles of association are involved in conformity with the provisions of section eight and rules created under that which all the wants of the Act and also the rules created under that regarding registration of the corporate underneath section eight and matters incidental or supplemental to it are complied with;
- Step - 7: Declaration by every of the persons creating the appliance in type INC-15;
- Step - 8: Filing of SPICe thirty-two type
After receiving Central Government approval i.e approval of type INC-12, one might move with filing of type SPICe 32.
- Step - 9: License issued in type INC-16;
SPICe thirty-three and thirty-four i.e e-MOA and e-AOA can’t be used for Section 8 Company. Section eight corporations area unit obligatorily needed to file ratite bird and AOA as pdf attachments to SPICe-32.
The minimum requirements that are necessary
- There should be a minimum of 2 shareholders;
- There should be a minimum of 2 directors (Directors and shareholders could be the same person);
- At least one in all the Directors shall be a resident in India;
- There is No demand for Minimum capital
- The Income-tax PAN could be a necessary document just in case of Indian nationals;
- Any one of the Identity Proof be it a citizen ID/Aadhar Card/Driving License/Passport is required; Passport is, however, a compulsory demand for the proof of identity just in case of the foreign nationals;
- Any one of the Proofs of Residence (Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement);
- The Registered workplace address proof (that is that the rent agreement in conjunction with latest rent receipt and a replica of the newest utility bill within the name of the property owner and a no objection certificate from the owner of the premises, just in case the premises ar rented);
- In case the premises ar in hand by either the Director and therefore the Promoters, any of the documents establishing the possession like Sale Deed/House Tax receipt etc in conjunction with the no objection certificate.
Benefits of Section 8 companies
- Section 8 companies get huge tax benefits.
- Changes in Board members for Section 8 company can easily and swiftly be made with ROC.
- It is managed by the board of directors.
- Transparency in work is high compare to Trust / Society registration.
- Most preferred from the point of view of foreign contribution.
- Maximum subsidies by the government.
- All properties are held in the name of Company.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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