Section 8 Companies are the NGOs registered under Companies Act, 2013 to promote arts, commerce, science, research, education, sports, charity, etc. The Section 8 Companies are more credible and trustworthy among stakeholders, Government, etc. Also, Section 8 Companies get more benefits as compared with Trust & Society. Let’s discuss these benefits in detail:
Section 8 Company does not require a prescribed minimum paid-up share capital.
Liabilities of the members of Section 8 Company are limited to their capital contributions.
Section 8 Companies enjoy more credibility as compared to NGOs, societies and trusts because they are recognized by Central Government’s licence.
Section 8 Company is exempted for the payment of stamp duty applicable for registration as applicable in case of other structures such as private limited or a public limited company.
Section 8 company can apply for exemption u/s 12AA of the Income Tax Act. It is also eligible for registration u/s 80G of the Income Tax Act.
Section 8 company can receive the foreign contributions after getting itself registered under Foreign Contribution (Regulation) Act, (FCRA), 2010.
To register your Section 8 Company in India, certain mandatory documents must be there and they are as follows:
Here is the list of what you will get from Startup Movers:
Follow these steps to register your Section 8 Company in India:
To register your Section 8 Company, the first step is to apply to the DSC of all the directors to sign the eForms digitally.
Once the DSC of all Directors obtained, the next step is to reserve the Company's name. This name is reserved under the RUN (Reserve Unique Name) Form and it must include words such as Foundation, Federation, Association, Forum, Chambers, Confederation, Council, Electoral Trust etc.
Next file Form INC-12 to obtain the Section 8 License. On the approval of the application a 6-digit number will be issued for your Company.
Draft MoA & AoA of the Company outlining Company’s objective while AoA defines the Rules & Regulations on which company’s management lays down.
Next you need to submit SPICe+ Incorporation form to the ROC. On the final approval, ROC will issue COI (Certificate of Incorporation) along with a Unique CIN (Company’s Identification Number).
There are certain points that should be kept in mind before registering a Section 8 Company in India. Section 8 Company is restricted to certain things and they are as follow:
Section 8 Company requires a minimum 2 directors for Private Limited Company and they must hold Director Identification Number.
Section 8 Company’s Object must be charitable, choosing any other objective for section 8 company is prohibited.
An Individual or HUF are eligible to start their Section 8 Company all alone.
Unlike a Trust, Section 8 Company is not managed by any specific Trustees but handled by the Board of Directors as per company’s MoA & AoA.
Any Member, Director or Founder is not allowed to draw remuneration in any kind of Cash or anything.
Section 8 Company is made for charity purpose, thus distribution of profit among its members or directors is restricted
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