Section 8 Company Registration

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OVERVIEW

What is Section 8 company?

Popularly known as Section 8 company is a company registered with charitable objects such as the promotion of Arts, commerce, science, education, sports, protection of the environment, religion, charity, etc. By promoting it as a not-for-profit organization, the Act does not bar the company from profit creation but rather prohibits distributing profit among members. This says that all the income or profit from any activity of the company must be utilized towards charitable purpose for which it is registered.

The charitable company is registered under Section 8 of the Companies Act, 2013, which provides it special status due to its objects. Compared to other types of companies, Section 8 company enjoys various exemptions and relaxations.

BENEFITS

Benefits of incorporation of Section 8 company

Tax and compliance exemptions

With its registration under Section 8 of Companies Act, it obtains a special status – distinct from other entities. Not only the company enjoys tax exemptions, but also the donors can claim an exemption for the donation made (under Income Tax). Apart from tax exemption, the company is also exempted from the applicability of many compliance-related provisions.

Separate legal identity

Being registered as a company, it obtains a separate identity apart from its members. Therefore, it can own and hold the assets and liabilities in its own name irrespective of the connection with the members. The change in members or the directors neither affects its existence or the assets & liabilities or rights & obligations.

Limited Liability

A company registered under Section 8 ensures limited liability to its members. The liability of the members is limited only to the extent of the capital subscribed and unpaid. The losses and obligations do not create a charge over the personal properties of members or directors. This helps the promoters to freely run the non-profit organisations.

No corporate title

Although the company enjoys the benefit of the corporate entity, it is not labelled as the corporate entity. The company does not need to add the suffix “Private Limited” or “Limited” after its name. This exemption is provided so that third parties offer their attention to the company’s purpose and not its status assuming it is profit making organisation.

ONLINE REGISTRATION

Documents required for formation of Charitable Company

Photograph

Latest Passport size photograph of Shareholders and Directors

PAN Card

PAN Card of shareholders and Directors.
Foreign nationals must provide a valid passport.

Identity Proof

Voter ID/ Passport/ Driving License of Shareholders and Directors

Address Proof

Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors

Business Address Proof

Electricity Bill/ Telephone Bill of the registered office address in India

NOC from owner

No Objection Certificate to be obtained from the owner(s) of registered office

Rent Agreement

Rent Agreement of the registered office should be provided, if any

Statement of Income & Expenditure

Estimated Statement of Income & Expenditure for next three years

Formulation of Section 8 Company Name

Unique Name

Mainly it builds the company brand and preferably be a coined word

Business Object

Second part of name should suggest the business activity of the company

Suffix

Its name must include suffix like Foundation, Forum, Federation, Chambers, Association, Council, etc.

Constitution Type

The name does not require to add any suffix like “Private Limited” or “Limited”

Online Registration

Register a company in 3 easy steps

1. Answer Quick Questions

Fill in our questionnaires that take less than 10 minutes
Provide basic details & documents required for registration
Make payment through secured payment gateways

2. Experts are Here to Help

Assigned Relationship Manager
Procurement of Digital Signatures (DSC)
Application for Name Reservation
Documents drafting including MOA and AOA
Application to grant license u/s 8
Certificate of Incorporation

3. Your Company is Registered

All it takes is 25 working days*

*Subject to Government processing time

The Process

Section 8 company registration procedure

Day 1

Application for Digital Signature Certificate

Day 2 - 4

Checking Name availability
Application for Name Reservation under “RUN“
Reservation of Name

Day 5 - 8

Drafting of MoA, AoA & other required documents
Payment of Stamp Duty
Notarization of required documents

Day 9 - 13

Application to grant a license in form INC-12
Government processing time for approval
License under section 8 in form INC-16

Day 14 - 16

Filing application for company registration
Application for DIN Allotment
Application for PAN and TAN of company

Day 17 - 19

Government processing time
Certificate of Incorporation

Frequently Asked Questions

Section 8 Company Registration

2018-07-30T11:55:23+05:30

What are the minimum requirements to register a charitable company in India?

To register such company, the promoters have to ensure the following:
1) The main object of the company must be to operate for a charitable purpose and among those prescribed in law
2) Minimum 2 members of the company, who shall subscribe to capital on incorporations
3) Minimum 2 directors in the company, one of which must be Indian citizen and resident
4) The registered office of the company must be situated in India

2018-07-30T11:55:49+05:30

What is the minimum capital required?

There is no minimum amount of capital prescribed for the charitable company. The promoters may introduce the amount sufficient to start and run business.

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How to reserve the name of company?

The name of the company should be formulated as per the naming guidelines. The application for reservation of name is made in web-form called “RUN” with a maximum of 2 unique names. The registrar may ask to re-submit the application with a different name if the names do not fulfill the requirements.

2018-07-30T11:56:51+05:30

How to obtain approval of Central Government for non-profit company registration?

The promoters shall apply in e-form INC-12 for said approval from Central Government. The form is accompanied with MoA – AoA of the company, declarations from promoters, estimated statement of income & expenditure for next three years, etc. If the application is approved, the approval letter is issued in form INC-16.

2018-07-30T11:58:43+05:30