Section 8 company is a corporation, registered as a Non-Profit Organization (NPO). The major intent contains the promotion of arts, commerce, charity, education, protection of the environment and so forth. Thus, the application of its profits, if any, or other income is utilized for the purpose of promoting the objectives. It functions similarly like a limited company which includes all the rights and obligations that come with such a corporation. It is vital to mention that it differs from a corporation in one very crucial aspect, that it cannot use the words “Section 8” or “Limited” in its name.
These are limited corporations which are registered under the Companies Act and would be treated as limited companies without the phrase “limited” added towards their name. They might have been registered as private limited or public limited companies.
Section 8 Companies are a lawful form for Non-Profit Organizations (NPOs) or Non-Governmental organizations (NGOs). A Section 8 Company has the right to work anyplace in the nation.
Section 8 company registration requirements
• The procedure of registering a Section 8 Company is similar to that of incorporating as an NGO, Trust or Co-operative Society as per the Companies Act 2013.
• An extra condition is there of looking for a license from the central government under Section 8 of the Companies Act, 2013.
• The license, fundamentally, permits them to delete Private/Public Limited from their name. By means of this license, the company becomes entitled to some exemptions from provisions of law and has discounts in the fee.
• When the recommended Section 8 Company was registered as a private limited than a minimum of 2 promoters are needed. But in case it is registered as a public limited Section 8 Company then at least 7 promoters shall be required.
Documents Required For Section 8 Company Registration
• Digital Signature Certificate
• Director Identification Number
• Memorandum of Association
• Articles of Association
• ID proof for members, like Aadhar Card, Passport, Voter ID
• Passport size Photographs
• Director’s details (if Members are other Companies/LLPs)
• Address Proof
Section 8 company registration process
There are also few conditions which must be fulfilled in order to register as a Section 8 Company:
• Registration under the Companies Act, 2013.
• License must be applied to MCA.
• At least 2 Directors for a Private Limited Company and 3 Directors for Public Limited Company are required to be there. The maximum limit is of 15 Directors. Beyond that could be appointed after passing a special Resolution in a general Meeting.
• Minimum 1 director should be a resident of India, that is, have stayed in India for a total period of not below 182 days in the preceding calendar year [(Section 149(3)].
• When the Company has been proposed to be incorporated as a private company or public company respectively, its MoA should have minimum 2 or 3 subscribers.
• One must decide the name that shall be applied for, objects that shall be carried by the Company, planned registered office address, total Directors and promoters, authorized capital, as well as the number of shares to be subscribed through each promoter. They should mention the plan stated to meet your social objectives. The ROC (Registrar Of Company) is enabled to ask about it.
• Whatever the sum of initial capital was proposed for the Company, it should get invested in the Company within 2 months.
• The proprietorship of the property relies on the name of the Company and it could only be sold according to the rules stated under the Companies Act.
• The Section 8 Company might be wind-up only by means of following the bye-laws of the society. On dissolution and after completely settling the debts and liabilities, the resources and property of the society shall not be distributed amongst the members of the company. As an alternative, the remaining funds, as well as property, shall be given or transferred in the direction of some other Section 8 Company, somebody that has a similar object.
• Annual filing of accounts, statements and the returns of the corporation with the ROC are needed to meet the compliance required.
• All the Directors should have their valid DIN (Director s Identification Number) and DSC (Digital Signature Certificate).
Section 8 Company Registration Online
1. Application of DSC and DPIN: All the partners have to apply for Digital signature and DPIN issued by MCA.
2. Name approval: The partner is required to provide 3 different name options to MCA of which one would be selected. The names provided must ideally be unique and suggestive of corporation business.
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 submission: 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. Get Section 8 Company incorporation certificate: It usually takes 15- 25 days to form a Section 8 company and get the incorporation certificate. The Certificate of Incorporation is evidence that a corporation exists. It also includes the CIN (Company Incorporation Number). The Registrar would wait for 30 days for objections, if any, of any individual pursuant to notice published in newspapers. The Registrar may also consult any additional regulatory bodies and necessary authorities. Afterward, the Registrar of Companies at its discretion might grant the license. And such a license might contain conditions as deemed necessary through the Registrar.
7. Apply for PAN, TAN and Bank account: Then an individual must apply for PAN as well as TAN. PAN and TAN are obtained in 7 working days. After this, an individual could submit the Incorporation certificate, MOA, AOA and PAN with bank to open the bank account.
