Section 8 Company Registration

Section 8 Company Registration is a type of non-profit organization for the motive of promotion of arts, commerce, research activities, science, education, sports, charity, society’s welfare, religion, environment protection, and other similar kinds of aims.

The income of the company is not distributed for payment of dividends to the members. These types of organizations devote their profit to the expansion of their charitable objectives. The Incorporation certificate is obtained from the central government as per the rules specified thereunder. There is no minimum share capital requirement and limited liability is present. .

Procedure of Section 8 Company Registration

The following steps of the registration process of the company are given below:

Step 1: Obtaining the Digital signature certificate (DSC) of the Subscribers and First Directors:

Digital signatures are required as the forms for the registration are filed only and are digitally signed. The DSC is issued by government-recognized certifying agencies. The application shall be made for the Class 3 category DSC. The cost of obtaining a DSC depends upon the certified bodies.

Step 2:Applying for a Director Identification Number (DIN):

The DIN is applied for the proposed director of the company. The application for allotment of DIN has to be made in Form DIR-3 for section 8 company registration process MCA or with form SPICe+. The necessary attachments to the forms like a self-attested copy of PAN, Identity proof and address proof of the directors with the form. It is filled out online on the MCA website. The form must be attested by a practicing professional, whether a chartered accountant or company secretary.

Step 3: Application for Name Availability in Form RUN

The name of the company Section 8 must include the words like Foundation, Society, Association, Club, Charities, Academy, organization, Federation, Institute, Development, etc. The applicant can propose a maximum of two names at a time. There is one resubmission that is allowed in the RUN facility for Section 8 Company Registration. It is recommended to provide the object clause of the proposed company.

Step 4: Apply for a Section 8 License from the Regional Director in INC-12:

After name approval, the license is applied by the regional director. He will review the objectives, and plans and will grant a permit for company registration. It usually takes 15 days to issue a license to operate as a section 8 company.

Step 5: Preparation of Memorandum of Association, Articles of Association and Other Documents:

Memorandum is the charter of the company defining the scope of its activities. The articles are the document that regulates the internal management of the company. The Section 8 Company Registration online in MOA is made in Form INC-13 while there is no format for AOA. Table F can be adopted for AOA. It should be signed by the subscribers in the presence of at least one witness who shall attest the signatures.

Step 6: Filing INC-12:

The applicants need to file E-Form INC-12 with the following attachments:

• INC-13 – Memorandum of association.
• Articles of association
• INC-14 – Declaration by professionals and applicants
• Details of the succeeding three years of income and expenditure
• Proposed business plan

Step 7: Filing of SPICe+ 32 Form on the MCA Portal

After getting the preparation of MOA and AOA, the Section 8 Company Registration in Form SPICe+ 32 Part B is filled with the requisite documents before the registrar. The services are DIN allotment, PAN allotment, TAN allotment, GSTIN allotment, EPFO allotment, ESIC allotment and opening of Bank account of the company.

Step 8: Certificate of Incorporation:

Once the incorporation form is approved by ROC, a Certificate of Incorporation is issued along with the Corporate Identification Number (CIN), PAN and TAN of the company.

Step 9: PAN, TAN and Opening of a Bank account

The application for PAN and TAN is made with the SPICe+ form. The current bank account should be in the name of the company.

Section 8 Company Registration Documents

The list of documents for section 8 company incorporation are as follows

• Identity Proof: Copy of PAN card for all subscribers and directors to the MOA
• Address proof: Voter ID or passport or driving license or Aadhar card or Telephone bill or Electricity bill which is not older than 2 months.
• Latest bank statement
• Passport size photographs
• E-mail Id & phone number of the members.
• Copy of rental agreement.
• Utility bills of the registered office
• NOC certificate signed by the owner for using the place for business.
• Consent by the director of the company in Form DIR-2
• Director’s interest in other companies/LLPs, if any.

A Company under Section 8 has to comply with the annual compliances like other companies, in case of non-compliance, the company will be treated as a dormant company and it can be struck off from the registrar.

Section 8 Company Registration Requirements

The following are the requirements for incorporation of Companies under Section 8 in India as follows:

• Directors

A minimum of two directors are required when section 8 is to be incorporated as a private company and three directors for a public company. The maximum number of members is 200 in the case of a private company and no limit for a public company.

• Capital Requirement

There is no requirement for minimum paid-up capital in the case of the company under section 8.

• Name requirement

The Non-profit organization established as a Section 8 need not use the words ‘Limited’ or ‘Private Limited’ in their name.

• Charitable objects

Section 8 Company Registration comes with non-profit objectives. The MOA and AOA must have the non-profit objective for which it is formed. In case of any profits earned by the company, it is utilized in the furtherance of its main objectives. The profits are not required to be distributed among its members.

• Management

The office of the company is managed by the Board of Directors (BOD) for the MOA and AOA of the company. Unlike this, trust is managed by the trustees. The members cannot draw any remuneration in form of cash or kind.

• A regulation under various acts

A company needs to follow specific rules and regulations prescribed under the Companies Act, 2013. It is required to maintain the Books of accounts and file returns with the ROC. The company cannot change the provisions of MOA and AOA without the prior approval of the Central government. The provisions of the Income Tax Act and GST law are also followed.

Exemptions Availed To The Section 8 Company Registration

The exemptions list that is available with companies registered under section 8 of the companies act, 2013 are as follows:

• Exemptions availed under the Companies Act, 2013

1. The Company Secretary in the prescribed section of the Act does not apply to companies under Section 8. They are also not required to appoint a CS as the Company Secretary.

2. The requirement of with a minimum paid-up capital for incorporation a private or public limited company has been removed by the Companies (Amendment) Act, 2015.

3. A company section 8 is also not required to appoint an Independent Director.

4. For Section 8 Company registration; Directorship will not be counted for calculating the ceiling concerning a maximum number of directorships as prescribed under the act.

5. A nomination and remuneration committee (NRC) and its stakeholders relationship committee are not applicable for these types of companies

6. A general meeting of the company can be held by giving notice of not less than 14 days instead of 21 days.

7. The provisions relating to the recording of minutes of general meetings, board meetings, and other resolutions do not apply to a company under section 8 of the Companies Act, 2013.

8. A firm can become a member of Section 8 Company registration. The full list of section 8 companies in India 2022 is displayed on the MCA portal.

9. It is also exempted from the application of secretarial standards..

10. A company of section 8 doesn’t need to conduct four meetings every six months. Thus, it allows conducting one meeting in the given timeline

11. The resolutions in relation to the borrowing of money, investing the funds of the company and providing loans or guarantees can be passed by circulation.

• Exemptions available under Income Tax Act, 1961

1.A Company under Section 8 is exempt from paying stamp duty applicable to other companies. The Section 8 Company registration charges for stamp duty are comparatively less for them.

2.The donors can claim a 50% rebate for donations made by them.

3. When a section 8 limited is registered under section 12AA of the Act, the profits will remain untouched from tax implication.n.

4. The central government may release the compliances of tax burden every year from these types of companies..

• Exemptions availed under Indian Stamp Act, 1899

1. The stamp duty on MOA and AOA of the section 8 limited or an increase in share capital is regulated by Indian Stamp Act.

2. States like Maharashtra, Delhi, and others have reduced rates for stamp duty on AOA/MOA or an increase in the share capital of the company.

Section 8 Company Benefits

There are certain advantages of Section 8 Company registration are as follows

• No-Minimum Capital Requirement

Section 8 companies don’t require any amount of minimum share capital. It is licensed by the central government under section 8 companies act, 2013.

• Benefits in Tax

Section 8 companies in India can avail of various tax benefits when the registration is under the given section of the Company law. When the Section 8 Companies Act 2013 is registered in Section 12AA for tax exemption of the Income-tax Act then the profits shall be fully exempted.

• Distinct Identity

The company is a legal structure formed under the Companies Act. Section 8 Companies are incorporated under the rules and regulations provided under the act. In Section 8 Company registration, members don’t have any kind of personal liability to pay the debts of the company.

• No Stamp Duty

When the company registration process is carried out, there is a minimal amount of stamp duty charged by the company

• No Suffix

The companies under Section 8 can be incorporated without the word “Limited” or “Private Limited” at the end of their name. The name of the Companies Act, 2013 companies under section 8 shall include words like ‘Federation, Foundation, Association, Council’, etc.

• Credibility

Companies under Section 8 have more credibility than any other form of a charitable organization. The Companies Act, 2013 has stricter provisions that require a mandatory audit every year.

• Exemption to the Donors

Under section 80G, the exemption is granted to the donors when the company is registered under section 80G.

Section 8 Company Registration Fees after getting the license and incorporation. The Reserve's unique name is Rs. 1000 and the fees of the SPICe+ form depend upon the state in which the company is formed and the authorized capital of the company.