SECTION 8 COMPANY

Section 8 company is a corporation, registered as a Non-Profit Organization (NPO). As per Section 8 (1a, 1b, 1c) of the Companies Act, 2013, a Section 8 company can be established for the “promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object”.

The Act further states that a Section 8 company can purse the above objects subject to the condition that it “intends to apply its profits, if any, or other income in promoting its objects” and “intends to prohibit the payment of any dividend to its members”. In simple terms, a Section 8 company must promote a public cause and the proceeds generated by the entity must solely be used to support the stated public cause(s) only.

ADVANTAGES OF SECTION 8 COMPANY:

• No Minimum Capital Requirement
• Tax Benefits
• Credibility
• Exemption to the donors
• Membership

Checklists of documents required for Registration of SECTION 8 COMPANY:

• Copy of PAN card for Indian Nationals;
• Notarized and/or apostilled passport copy for Foreign Nationals
• Passport/Voter ID/Driving license
• Passport size photographs of all individuals
• Copy of Telephone/Mobile/Electricity bill/Bank statements (less than 2 months old) of Directors 
• Electricity/Gas bill (less than 2 months old) for office premises       
• In case of rented premises a notarized copy of Rent Agreement with a No- Objection Certificate (NOC) for conducting business
• In the case of self-owned premises registered title document
• Mobile no, email id of each Director/shareholder

Registration Process 

1. Name approval: 

• Name for Company is applied through simple web based form. We can apply for total four names - Two names at a time followed with one resubmission chance.
• Name is available for 20 days from the date of approval.

2. Obtaining DSC:

• After applying for name, next step is to apply for digital signature of all directors/shareholders. 

3. Approval of other authorities: 

• The Registrar of Companies might need the applicant towards furnishing the approval or concurrence of any department, regulatory body, appropriate authority, or Ministry of the Central or State Government with respect to the work to be completed.

4. Obtaining Section 8 Company License:

• After the corporation’s name is approved, one requires applying for a Section 8 Company license from the MCA. The Registrar would wait for 30 days for objections, if any, of any person pursuant towards notice published in newspapers. The Registrar might also consult any additional regulatory bodies as well as necessary authorities.
• Afterward, the Registrar of Companies might, at its discretion, grant the license with or without certain conditions. The Registrar shall direct the corporation in order to include in its memorandum, or in its articles, or partly in one and partly in the other, such licensing conditions as might be stated through the Registrar in this behalf.

5. MOA and AOA preparation:

• When the license is obtained, an individual is required to draft Memorandum of association and Articles of Associate. But the object of the corporation should always be a charitable object. Both MOA, as well as AOA, are filed with the MCA with the subscription statement.

6. Submission of Spice forms: 

• After collection of all the necessary documents, preparation of MOA and AOA, the next step is to fill the spice forms, attach all the attachments, affix DSC and submit it on MCA portal. 

7. Allotment of Certificate of Incorporation (COI) with PAN/TAN: 

• The MCA will issue COI if all the documents are in order as required or else will raise objection requiring correction and resubmission. 
• However, PAN and TAN are issued with COI of Company. 

8. Certificate of Commencement of Business: 

• Every Company within 180 days of its incorporation has to file Certificate of Commencement of Business with MCA to commence business.