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Section 8 Company

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Section 8 Company

 What is a Section 8 Company ?

Section 8 Company is named Section 8 Companies Act, 2013, which pertains established and A section 8 company online may be incorporation with object to the promote 'for promoting commerce, research, art, science, education, social welfare, religion, sports, charity, protection of environment or any such as other object', provided profits, if any, or other income applied for the promoting only objects of the company & no dividend is a paid to the members. So, Section 25 Company or Section 8 Company online is a company registered under the Companies Act, 2013 for the charitable or not for profit purposes.

Documents required for registration of section 8 company

  • PAN Card
  • Identity proof of the Directors (PAN Card,Aadhar Card, etc.).
  • Address Proof of Directors(Driving License, Passport , Bank Statement and Aadhar or electricity bill).
  • Digital Signature Certificate or DSC if any.
  • Director Identification Number or DIN if any.
  • Memorandum of Association/MoA.
  • Articles of Association/AoA.

 process

  • Step 1:- Obtaining DIN and DSC Director Identification Number (DIN) and Digital Signature Certificate (DSC) required for the proposed Directors of the Section 8 Company. DSC & DIN to be obtained for proposed Directors within working 5-to-7 Days.
  • Step 2:- Name Approval and License Once DSC and DIN available for the least 2 Directors, application for the reservation of name for section 8 company made to Ministry of Corporate Affairs MCA. And name reserved; a license obtained prior to the incorporation.
  • Step 3:- Section 8 Company Registration Once the license obtained, registration documents submitted to the Ministry of Corporate Affairs MCA along with in application for the registration. MCA will be usually approving application for incorporation in the 5-to-7 Days, subject to the processing time.

Advantage of Section 8 Company :

Tax benefits

A Section 8 Company registration is a non-profit organization that is why they are exempted from some provisions of income tax. They also required to the pay less stamp duty as the compared to other organizations.

Use of title

Unlike the other companies, who have use the title as ‘limited company’, Company Registration Certificate Cost of the IT Act exempts them for use of the any suffix or title, they can still exercise their are functions without informing to the public of their limited liability status.

Ease at Transfer of title/ownership

Unlike the limited liability companies who are not allowed to the transfer ownership or title, but per section 8 of the Income Tax Act, 1961 allows the transfer of ownership or title of both movable & immovable interest with in no hurdles or restrictions of the any sort.

Share Capital

Unlike the other limited companies like public, private, or one person, companies registered under the section 8 doesn’t required much be share capital. and directly funded from the subscriptions or donations made to them.

Separate Legal entity

A Section 8 Company registration online also are holds its own identity like other companies structures, and has its own separate legal entity standing from the member. A Section 8 Company also has been perpetual existence.
Included in Section 8 Company Registration Package
  • Personal Consultation.
  • DSC for two Directors.
  • DIN for two Directors.
  • Name Search & Approval.
  • AOA  and MOA .
  • Payment Government Fees.
  • Registration Certificate.
  • Company PAN Card.

Minimum Requirements for Section-8 Company:

From all Directors and Shareholders
  • 2 shareholders.
  • Minimum 2 directors. Directors and Shareholders could be same.
  • Minimum 1 Director should be Indian resident.
  • And no minimum capital required.
  • Income tax PAN.
  • Identity Proof (Aadhar Card /Voter ID, etc).
  • Passport (mandatory).
  • Proof of residence (Telephone/ Bank Statement/ Electricity/ Mobile Bill).
  • And Registered Office Address Proof (Rent agreement).
  • Documents claiming to the ownership such as Sale Deed or House Tax receipt along with NOC.

Frequently asked questions :-

Q1. The time taken to register Section 8 company ?
It takes around 30 to 45 working days to the register a Section 8 company online. This duration can be lesser in case Regional Director approves to the application earlier.
Q2.Can a single Individual form Section 8 company?
No, at least 2 Members or Promoters required to the incorporate Section 8 company.
Q3 How many Directors required to the incorporate a Section 8 company ?
Minimum 2 Directors are required to incorporate a Section 8 company registration as “Private Limited” and minimum three directors if incorporated as “Public limited
Q4 Is it necessary to have charitable object to the register a Section 8 company?
Yes, it important to have non-profit motive to the incorporate Section 8 company.
Q5. What are key features of a section 8 company ?
The key characteristics of NGO section 8 company process are: • Object: - It operates for common welfare of masses at large, for the promotion of commerce, art, social welfare, education, research, science, charity, sports, protection of environment or any such as other object. • Profit Earning: - The objective is not earning profit. If profit is earned during course of operation, and same is not to shared among owners or members rather utilized for attaining objects for which NGO was formed. • Utilisation of funds and earnings:- The profits, if any, or other income is a used towards promoting of the specific objects of NGO. Further there is restriction on declaration of profits dividend to the members.
Q6 Can a company with unlimited liability registered a Section 8 Company?
No. Rule 20(1) of Companies (Incorporation) Rules, 2014 provides only limited company registered under this Act or under any previous company law make application to Registrar for issue of the license. so, a company with unlimited liabilities can’t registered a section 8 company.  
Q7 Can a company register under Section 8 converted into any other company ?
Yes, a Section 8 Company can be converted into the other company including one person company as prescribed under Section 8(4)(ii) read with the Rules 21 & 22 of Companies (Incorporation) Rules, 2014. This is a further subject to the restrictions & compliances as per other applicable laws including Income-tax Act, 1961.  
Q8 Whether an Articles of Association of a Section 8 Company can have entrenchment clause ?
Yes, an Articles of Association or AoA of Section 8 Company can have entrenchment clause in the terms of provisions of section 5(3).
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