One of the main benefits of running a section 8 company is that you have an opportunity to serve the community via funds and volunteer work. It’s also an opportunity to solve an issue, which is not good for the community. We respect your dream to make a change while serving society.
Section 8 Company is registered with the Ministry of Corporate Affairs, wherein NGO/Trusts and Societies are registered under the State laws. Section- 8 Company is recommended for the big operational activities like Research Center, Technical College, hospital etc.
According to Section-8 of Indian Companies Act, 1956 (Old section 25 of Companies Act, 1956), a section 8 company can be established ‘for promoting commerce, art, science, religion, charity or any other useful object’, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members.
For a section-8 company, the main instrument is a Memorandum and articles of association (no stamp paper required).
A section-8 Company needs a minimum of three members; there is no upper limit to the number of members.
The Board of Management is in the form of a Board of directors or managing committee.
A section 8 company has various advantages when comparing with Trust or Society like improved recognition and better legal standing.
Section 8 company also has higher credibility amongst donors, Government departments and other stakeholders.
Decision: - Is a Section 8 Company right fit for you to start your non-profit operations.
Management: - Trusts are managed by Trustees but Section 8 Company does not have the concept of Trustees. Hence, Section 8 Companies are managed by the Board of Directors based on the MOA and AOA of the Section 8 Company.
Change Management: -The management of a Section 8 Company can be easily transferred or changed from one person to another. Section 8 Company can also be controlled by shareholders.
Organized & Better Credibility: - A Section 8 Company has improved recognition, Better legal standing, Higher credibility amongst donors, and Support of Government departments.
Uninterrupted Existence: - A Section 8 has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved.
Next step is to understand various other implications.
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.
A Section 8 company must hold a board meeting bi-annually
File annual returns with MCA (Ministry of Corporate affairs)
Audit is mandatory
Profits can be used only for the charitable or not-for-profit purposes mentioned in the MOA.
Minimum 2 for a private company and 7 for a public ltd company.
It’s easy for Section 8 company to get foreign contribution.
Section 8 company requires filing annual return with the income Tax Department
Annual account audit by a CA is mandatory
If Section 8 company benefits & Liabilities satisfy your business requirement, then Section 8 company incorporation might best suit your business needs. Now in order to run Section 8 company a little more preparation and planning will definitely go for a long way.
To Prepare & file business taxes can be very complicated in case of Section 8 company. Our expert CA/CS will help you to prepare and file tax forms correctly with minimal fee and on time.
Our expert CA/CS will help you in annual audits and compliances to complete on time.
1. Fill out basic requirement form
2. We'll collect all your documents and file them directly with the authority
3. You'll receive your completed Section 8Company package by an E-mail
All the proposed Directors and promoters shall apply for the Digital Signature Certificate. They should obtain DSC by applying to the Authority.
DIN will be applied In Incorporation Form-Spice-INC-32 due change in new Process.
Now, the applicant of the Company shall apply for proposed Company name approval. The application for name approval shall be filed in RUN Service with only 2 Names . While applying for the name the applicant shall comply with the provisions of the Companies Act and Rules thereon. The approval received from ROC is valid for 20 days from the date of approval.
After approval of Name, now the application for a license shall be prepared. The first step is to draft the MOA and AOA of the proposed company. The MOA shall be in accordance with the objective and provisions of Act. The MOA and AOA shall be signed by the subscriber to MOA
The final application to grant license shall be made in Form INC-12 with the registrar. The Form shall accompany with following documents:
INC 13 (Memorandum of Association of Proposed Company);
Article of Association of proposed Company;
Declaration as per Form No. INC-14
INC 15 (Declaration by subscribers of the MOA);
Statement of Income & Expenditure for next three years;
List of proposed directors of the company;
Subscriber page of MOA & AOA should be handwritten by subscriber and witness.
After satisfaction of an application, the license is being issued in Form INC 16.
After the issue of license now an application for incorporation of section 8 company shall be made in Form Spice-INC-32:
Memorandum of Association of the Company;
Article of Association of the Company;
Declaration by professional in form INC 8;
affidavit from the Directors for not accepting deposits
Affidavit by each subscriber of the memorandum in form INC 9;
Address Proof of the subscribers i.e. Bank Statement/ Electricity Bill/ Gas Connection/ Postpaid Bill etc;
Identity proof of subscribers i.e. Aadhar Card/ Passport/ DL etc;
Consent to be directors i.e., DIR-2, DIR-8 & MBP-1
Application for Registered Office:
Now, the application for registered office shall be filed with Spice-INC-32 with address proof or can file after incorporation within 30 Days Form INC-22 with the registered office address and Rent agreement/lease agreement, Electricity Bill and NOC.
A copy of PAN Card
MOA of Section 8 company.
Estimated income & Expenditure statement of 3 years.
Notarized Passport copy for foreign nationals (If Any)
Voter's ID/Aadhar Card/Passport/Driver's License
Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
Passport-sized photograph of all Directors
Specimen signature (blank document with signature [Directors only])
For Proposed Registered office (Residential or commercial)
Any Utility bills
Scan copy of Rent agreement with NOC from the owner
Minimum of two directors for private company and 7 for a public ltd company.
Intends to apply all its profit in promoting the objectives
Proof of business
Industry average is up to 20 days, but we have a track record of completing within 10-12 days unless critical things happen in between the process.
Yes, GST registration is mandatory
Yes, after acquiring DIN/DPIN an NRI or Foreign national can become a designated director in Section 8 Company. However, at least one designated director in the Section 8 Company must be a Resident of India
Any premises be it a commercial / industrial / residential where communication from the MCA will be received.
No, you need not to be present at our office or appear at any office for the incorporation of a Section 8 Company. All the documentation has been completed by us. In case of any communication during incorporation, we might use email to receive or send documents to you.
A registration certificate issued by the registrar of the business is valid until you are meeting applicable rules &compliance.
Yes, it is necessary to have a non-profit motive to incorporate a Section 8 company.