An organization registered as the Non- profit organization (NPO) can be regarded as the section 8 company. The various objectives of section 8 Company are the promotion of arts, commerce, charity, education, protection of the environment, science, social welfare, sports, research and religion. One of the crucial points to be noted is that the section 8 company shall invest its profits, or any other income received only in promoting its objects. Further section 8 company functions exactly like a limited company including all the rights and obligations that come with such a company. However, one crucial distinction between a company and section 8 company is that it cannot use the words “Section 8” or “Limited” in its name.
- Number of tax benefits u/s 122AA and U/S 80 G are provided to the donor in the section 8 company against the donations made.
- The incorporation process of section 8 company is comparatively is easier.
- There no requirement of minimum paid-up capital for forming Section 8 Company.
- The Stamp duty registration of section 8 company is exempted
- Any registered partnership firm can become a member of section 8 Company in its individual capacity
- The identity of section 8 company is separate from its members thus, the liability of members s limited to their share
Documents required for registering Section 8 Company
- Copy of PAN card.
- Identity proof like Voter ID or Passport or Aadhar card or Driving license (any one).
- Address proof like latest bank account statement or telephone bill or electricity bill not older than two months.
- Passport size photograph
- Registered Address proof of the company, which includes any utility bill not older than two months.
- In case of rented office premise No Objection Certificate (NOC) from the owner.
- Copy of rent agreement in case of rented premises.
Process of registering section 8 Company
Step-1 collection of the documents
Initially, the applicant is required to collect the above-specified documents along with director’s consent in DIR-2.
Step-2Applying for Digital signature certificate
Further, the applicant is required to apply for the Digital Signature Certificate which is required for filling the various forms electronically in the Ministry of Corporate affairs.
Step-3 Obtaining Director’s Identification Number
It is mandatory for every director to obtain the valid DIN from the Ministry of Corporate Affairs by filing Form DIR-3., in case the director does not have DIN.
Step-4 Applying for Company name
The next step is one of the most crucial steps as it involves applying for the valid name of the company. While choosing a name an applicant must adhere to various guidelines as specified by MCA. Further, the Applicant can give maximum six names in order of preference.
Step-5-Drafting MOA and AOA
As soon as the approval is received the Memorandum of Association and Article of Association shall be drafted. It shall be sent to ROC along with other documents in e-Form INC 13 for the issuance of the license under section 8 of the Companies Act, 2013. The subscription pages of both MOA and AOA shall be signed by each subscriber of the memorandum.
Step-6 Application for license under section 8
To incorporate a section 8 company the applicant is required to file an application in form INC 12 along with the prescribed fees to register for obtaining a license. Along with INC-12 following documents shall also be submitted-
- INC-13 Memorandum of Association. Article of Association
- INC-15 Declaration by each Subscriber to MOA (On Non- judicial stamp paper of Rs. 100/- and duly notarized).
- Estimated Statement of Income & Expenditure for Next three years and it should be signed the proposed Promoters.
- List of proposed Promoters and Directors of the Company.
- Subscribers page (AOA & MOA) should be hand written by the Subscriber (s), and witness.
Step-7 Certificate of Incorporation
The applicant shall file the required forms that are INC 7, INC 22 and DIR 12 for the incorporation with the registrar of the companies along with the prescribed fees. In case registrar of the company is satisfied with the contents of the documents that are filed a certificate of registration will be granted in form INC-16.