If you’re planning to establish a non-profit organisation that is dedicated to education, social welfare, or charitable causes, then Company Registered under Section 8. of the Companies Act, 2013, could be a wise choice. Section 8 businesses are made for groups of individuals who are aiming to contribute to the public interest without the aim of earning profit.
This blog will discuss all you must learn about the Section 8 company–its meaning, benefits, features and registration procedure, as well as the documents needed, and how the most reputable CA company can assist you with a easy company registration.
What is a Section 8 Company?
The Section 8 company is a kind of non-profit corporation that has been which is registered by the Companies Act, 2013, which is designed to serve the following objectives:
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Charity
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Education
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Research and science
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Sports
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Culture and art
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Religion
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Environment protection
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Social welfare
These companies put their earnings or profits to the advancement of their goals and do not give dividends to their members.
Key Features of a Section 8 Company
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Non-Profit Goal In contrast to other businesses their primary goal is not making money, but for social improvement.
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Does not require a minimum investment There’s no minimum capital requirement. This gives the flexibility for new entrepreneurs.
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limited liability Members are only liable for liability based on the shares they hold.
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Tax Exemptions Section 8 companies may be eligible for tax exemptions under Section 12AA and 80G.
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separate legal entity It is a legal entity that has an identity distinct and a continuous succession.
Benefits of Registering a Section 8 Company
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Credibility It increases credibility and trust between sponsors, donors and the general public.
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Exclusivity of Stamp Duty: Section 8 companies are exempt from having to pay stamp duty on registration.
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Tax benefits Tax Benefits: Being eligible for tax exemptions aids in greater utilization of funds.
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Govt Support Section 8 companies have access to government CSR and grant funds from corporations.
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global reach Companies that are HTML0-certified are able to attract international donations through an appropriate FCRA registration.
Who Can Register a Section 8 Company?
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Individuals
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Associations
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Partnerships
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Companies (existing or brand new)
Any of these entities may be registered as an Section 8 company if the proposed business meets the goals allowed by this section.
Process of Section 8 Company Registration
The process of registration involves these steps
1. Obtain Digital Signature Certificate (DSC)
The directors of the business need to obtain an official DSC to fill out an online application.
2. Director Identification Number (DIN)
Request a DIN for all of the directors who are proposed if they do not already have one.
3. Name Approval
Name reservation is possible through the RUN (Reserve Unique Name) service on the MCA portal. Names should contain the words Foundation, Forum, Society, Association, etc.
4. Filing SPICe+ Form
Complete the SPICeplus form with all necessary papers and statements. It comprises Part A (name reservation) and Part B (incorporation).
5. MoA and AoA Drafting
Create Memorandum of Association (MoA) as well as Articles of Association (AoA) that clearly outline the objectives of the business.
6. Application for License pursuant to Section 8.
Submit Form INC-12 for an approval by the regional director of the Ministry of Corporate Affairs.
7. Incorporation and Certificate
After approval After approval, it is then possible to obtain the Certificate of Incorporation together with an Section 8 license is issued.
Documents Required for Section 8 Company Registration
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PAN Card for all directors
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Aadhaar card, passport, or voter ID
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Photographs of passport size
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Bank statement or utility bill to prove address
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Documentation of the registration of office (rent agreement/NOC from the landlord)
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MoA and AoA
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Directors and subscribers sign a declaration (Form INC-9)
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Consent to be a Director (Form DIR-2)
Role of a CA in Section 8 Company Registration
The procedure of registration and complying requires various forms, liaison with the government, and legal knowledge. A competent company registration consultant, particularly the most reputable CA company will:
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We will assist you in creating a legally-compliant MoA and AoA
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Verify that all documentation is accurate
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Assistance in licensing and DIN assistance with licensing, DIN DSC applications
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Help with submitting tax exemptions such as 80G and 12AA.
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Maintain compliance throughout the year after registration
If you have a chartered accountant, registration process becomes smooth and efficient process that allows you to concentrate on the task at hand.
Compliance After Registration
Even after registering an Section 8 company must meet regular and annual compliances, like:
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The filing of annual returns is done through the Annual Returns must be filed with the Registrar of Companies (ROC)
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Maintaining accurate books of accounts
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Conducting board meetings as well as annual general meetings.
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Inquiring about renewal of 80G/12AA (if the case is)
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Every financial year
Failure to comply with any of these requirements could result in penalties or even the cancellation of license. Therefore, professional assistance is strongly recommended.
Conclusion
The process of registering a business in Section 8 is a laudable step towards contributing to the society. Whether your goal is to spread education, protect the environment, or provide healthcare, Section 8 registration is a structured and government-recognized way to make a difference.
For a seamless as well-run and legal company registration Always consult the best CA firm who has expertise in corporate and non-profit law as well as governance. Their advice will assist you in setting it up your company correctly, but also assist your compliance throughout the entire process.
