Section 8 Company Registration
You can register your company under section 8 of the Companies Act if it is for the promotion of research, education, science, art, commerce social activities etc. Get your company registered now with corpseed and enjoy various benefits and exemptions from tax liabilities.
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An Overview of Section 8 Company Registration
A company incorporated as section 8 company registration is significantly different from the others. The Section 8 Company gets various exemptions in tax liability and other perks from the central government for promoting research, art, commerce, social welfare etc. in the country. This is a way to facilitate good causes and enable more people to take such noble initiatives. All you need to do is convince the registrar that the objective of your company will be the same as mentioned in section 8 of the Companies Act of 2013. You also need to follow the conditions imposed by section 8 and if at any point in time you fail to comply with such conditions, your licence may be revoked. Section 8 provides for the establishment of NGO companies but also ensures that no one can misuse the provision and claim undue benefits.
What is Section 8 Company?
Section 8 Company is a company formed under the Companies Act and is often referred to as an NGO. Section 8 of the Companies Act provides various conditions and if a company satisfies the same, then it can be registered under section 8 and claim the benefits provided to these companies. The conditions prescribed under this section include the compulsory association of the company with social activities, research and promotion of science, art, commerce etc. The same provision was also provided under section 25 of the Companies Act's older version, which was enacted in 1956.
Section 8 Companies are a legal structure of Non-Profit Organisations (NPOs) or Non-Governmental Organisations (NGOs) with the authority to work across the country. It is similar to a Trust or Society but the only difference is the governing authorities. A Section 8 Company is registered and governed under the Central Government's Ministry of Corporate Affairs whereas Trusts and Societies are regulated under State Government regulations. The companies registered under section 8 of the Companies Act are not required to use the words ‘Ltd.’ or ‘Pvt. Ltd.’ as a suffix in their name. Instead, they can add the word ‘Foundation’ or ‘Association’ as suffixes.
Who Can Register the Section 8 Company?
A company can be registered under section 8 only if it satisfies conditions prescribed by the Companies Act of 2013. The eligibility criteria are as follows-
- It must be incorporated solely for charitable purposes as follows-
- Promotion of commerce, art, science, sports education etc.
- Contribution to research for the common good
- Undertaking social welfare or religious activities
- Protection of the environment
- If the company generates any profits, the same shall only be allowed to spend against the promotion of its own objects.
- It should not pay any dividend to its members in any case.
- A Memorandum of Association must be presented to the central government and kept intact. If any changes have to be done in the same, they must be executed only after prior approval of the central government.
Benefits of Section 8 Company Registration
One of the main benefits of running an NGO by registering a company under section 8 of the Companies Act is that you get an opportunity to serve the community via funds and volunteer work. It’s also an opportunity to solve some ongoing problem that affects the public at large and your act can facilitate those people. The following benefits are provided to the companies registered under section 8 of the Companies Act-
- The company can be formed by only two persons.
- It is a separate legal entity and liability is limited to the company itself. It enjoys the benefits available to a legal entity including the power to sue or be sued.
- The company incorporated under the Companies Act of 2013 has perpetual succession. It means that the company can remain in existence even after the death of its members or departure from the company. It can only be dissolved legally through a proper procedure.
- It does not require any minimum paid-up capital. The promoters of the company may incorporate it with any paid-up capital they wish.
- Various tax benefits are provided to Section 8 companies. These benefits are mentioned under section 12AA and 80G of the Income Tax Act. Also, if any entity donates money to these companies, tax benefits are given to those individuals and organisations for such an amount.
- Section 8 Companies also receive huge amounts of donations as the corporates having more than two crores of annual turnover are required to pay 2% donation to a non-profit organisation as Corporate Social Responsibility (CSR).
Documents Required for Section 8 Company Registration
The following documents shall be required by the promoters of the company for registration under Section 8 of the Companies Act-
- Identity Proof of the Directors
- Address Proof of the Directors
- PAN Card of the Directors
- Passport (For Foreign Nationals)
- Proof of Registered Office Address (Rent Agreement, Lease Deed etc.)
- Utility Bills
- Subscriber Details
- MoA (Memorandum of Association)
- AoA (Articles of Association)
- Digital Signature Certificate
- Director Identification Number
- Application Form
Steps to Follow for Section 8 Company Registration
The Registration of Section 8 Company involves the following steps-
- Step 1: Obtain DSC (Digital Signature Certificate)
It’s necessary to apply for a Digital signature of the designated partners before starting the private limited company registration. The DSC is important as all the documents before submission are required to be digitally signed.
- Step 2: Apply for DIN (Director Identification Number)
The application for DIN is mandatory for each director. The DIN application has to be made in Form DIR-3. This identification number helps in distinguishing directors of the company and is required for various business-related activities.
- Step 3: Name Approval and Its Reservation
Section 8 company name approval is an important step in establishing a company. RUN (Reserve Unique Name) form is filled for the reservation of the name given by Section 8 Company. The name provided must be as per Section 8 of the Companies Act of 2013.
- Step 4: Application for License
Form INC 12 is filed with the RoC of the same state in which the company is being incorporated. It is to be filled for the issuance of a License with the attachments of MoA, AoA, Subscriber’s Declaration, Financial Statement, and List of Directors. It is mandatory that the subscriber page of MOA & AOA should be handwritten along with the signatures of the subscriber and witness. Once the INC 12 is approved, the license is issued in Form INC 16.
- Step 5: Preparation of Form INC 32
This step involves the drafting of SPICe (INC 32), along with the following attachments, Memorandum of Association (MOA) and Article of Association (AOA), Professional’s Declaration Form INC 8, Affidavit by Each Subscriber of the Memorandum in Form INC 9, Subscriber’s Details, Specimen signature in Form INC 10.
- Step 6: Approval of the Documents
Once the SPICe form INC– 32 is approved and Directors are appointed under form DIR 12, the registrar provides the company identification number (CIN) along with the PAN and TAN of the company.
Register Your Section 8 Company with Corpseed!
Corpseed stands as one of India's foremost business compliance management firms, renowned for its comprehensive range of services. We assist you in incorporating your Section 8 company along with many other types of business incorporations. After the incorporation, we also provide services for your compliance fulfilment and annual report submissions. Leveraging our extensive expertise in the field, we provide unparalleled solutions for your business regarding the incorporation of Section 8 companies. When you partner with us, you gain access to a team of professionals ready to navigate the licensing process on your behalf. Simply furnish the requisite information, and our seasoned experts will handle the rest with the utmost efficiency. Corpseed serves as your comprehensive one-stop solution for all your business needs. Our team of experts boasts an extensive knowledge base and rich experience, making them well-versed in every facet of regulatory compliance.
Connect With Corpseed
Connect with the Corpseed team to discuss your requirements at IVR: 7558640644 or hello@corpseed.com. It takes 20–25 minutes to discuss the requirement.
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Once you discuss the requirement, we will align a dedicated Account Manager to understand your business needs and assist throughout the process.
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Track the progress of your application and always know what’s in progress and what’s done.
Job Completed
Once the job is completed, you will receive registrations & certifications directly to your email ID and at your doorstep.
Frequently Asked Questions
Quick answers to common questions about this service.
What is a Section 8 Company?
A Section 8 Company, also known as an NGO, is a company formed under the Companies Act with the purpose of promoting social welfare, research, and other charitable activities.
How is a Section 8 Company different from other types of companies?
Section 8 Companies are distinct because they are formed exclusively for charitable purposes and are eligible for various exemptions in tax liability and other benefits from the central government.
Who can register a Section 8 Company?
A Section 8 Company can be registered by individuals or groups who intend to promote charitable activities such as commerce, art, science, sports, education, research, social welfare, or environmental protection.
What are the benefits of Section 8 Company registration?
Benefits of Section 8 Company registration include limited liability, perpetual succession, flexibility in capital requirements, and various tax benefits under sections 12AA and 80G of the Income Tax Act.
What documents are required for Section 8 Company registration?
The required documents include identity and address proof of directors, PAN cards, proof of registered office address, utility bills, details of shareholders, Memorandum of Association (MoA), Articles of Association (AoA), and an application form.
What are the steps involved in registering a Section 8 Company?
The steps include obtaining a Digital Signature Certificate (DSC), applying for Director Identification Number (DIN), getting name approval, applying for a license, preparing Form INC 32, and obtaining approval of the documents.
Is there a minimum paid-up capital requirement for a Section 8 Company?
No, there is no minimum paid-up capital requirement for a Section 8 Company, allowing promoters to incorporate it with any desired capital.
What is the significance of the Digital Signature Certificate (DSC)?
The DSC is necessary for digitally signing all documents during the registration process of a Section 8 Company.
Can a Section 8 Company distribute dividends to its members?
No, a Section 8 Company is not allowed to pay dividends to its members. Any profits generated must be reinvested in furthering the company's charitable objectives.
What government authority governs Section 8 Companies?
Section 8 Companies are registered and governed under the Central Government's Ministry of Corporate Affairs.
How can Section 8 Companies receive donations?
Section 8 Companies can receive donations from corporations under Corporate Social Responsibility (CSR) obligations, which require companies with more than two crores of annual turnover to contribute 2% of their profits to non-profit organizations.
What happens if a Section 8 Company fails to comply with the conditions imposed by Section 8?
If a Section 8 Company fails to comply with the conditions, its license may be revoked by the government.
Can foreign nationals be directors of a Section 8 Company?
Yes, foreign nationals can be directors of a Section 8 Company, and they need to provide their passport as identity proof.
What is the difference between a Section 8 Company and a Trust or Society?
Section 8 Companies are governed by the Central Government, whereas Trusts and Societies are regulated by State Government regulations. Additionally, Section 8 Companies can use the suffix 'Foundation' or 'Association' in their names.
What is the primary purpose of Section 8 Company registration?
The primary purpose of Section 8 Company registration is to facilitate charitable and noble initiatives by providing legal recognition and various benefits to organizations dedicated to promoting social welfare, research, and related activities.
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