All You Need to Know About Section 8 Company Registration

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Section 8 company registration is a unique process for forming a non-profit organization under the Companies Act, 2013, in India. These companies aim to promote charitable objectives, such as education, social welfare, environmental protection, or any other purpose that benefits society. Unlike other company types, a Section 8 company is not focused on profit-making but rather on using its income to advance its objectives.

What is a Section 8 Company?

A Section 8 company is a legal entity dedicated to promoting activities for the greater good. These companies enjoy special privileges, including tax exemptions and reduced compliance requirements. They cannot declare dividends to members or shareholders, as all profits must be reinvested to fulfill the organization's purpose.

Key Features of Section 8 Companies

1. Non-Profit Objective: Focused on charitable, educational, or social activities.
2. No Minimum Capital Requirement: No restrictions on minimum share capital.
3. Limited Liability: Members' liability is limited to their shareholding.
4. Special Tax Benefits: Eligible for tax exemptions under Section 80G and 12A of the Income Tax Act.
5. Separate Legal Entity: Operates independently of its members.

Eligibility Criteria

To register a Section 8 company, you must meet the following criteria:
1. The organization must have a clear charitable or non-profit objective.
2. All profits and income must be used solely for the company’s objectives.
3. No dividends can be distributed to members.

Steps for Section 8 Company Registration

1. Digital Signature Certificate (DSC): Obtain a DSC for all proposed directors to sign digital documents.
2. Director Identification Number (DIN): Apply for DIN for all directors via the MCA portal.
3. Name Reservation: Use the RUN service to propose and reserve a unique name for the company.
4. Prepare MOA and AOA: Draft the Memorandum of Association (MOA) and Articles of Association (AOA) to define the company's mission and internal rules.
5. File INC-12 Form: Apply for a license to operate as a Section 8 company by filing the INC-12 form along with the required documents.
6. Incorporation via SPICe+ Form: Submit the SPICe+ form along with other incorporation documents, including ID proofs, address proofs, and NOC (if applicable).
7. Approval and Certificate of Incorporation: Upon approval from the Registrar of Companies (RoC), you will receive a Certificate of Incorporation and a license under Section 8.

Documents Required

1. PAN card and Aadhaar card of directors.
2. Proof of registered office address (rent agreement or property ownership document).
3. MOA and AOA.
4. Declaration by directors in Form INC-9.
5. Passport-sized photographs of directors.

Benefits of Section 8 Company Registration

1. Tax exemptions and financial benefits.
2. Recognition as a credible organization for social welfare.
3. Ability to accept donations and grants.
4. Minimal compliance requirements compared to other business entities.

Conclusion

Section 8 company registration is an ideal choice for individuals or groups committed to making a positive societal impact. With clear objectives, proper documentation, and adherence to legal procedures, setting up a Section 8 company ensures a structured and recognized platform to achieve charitable goals.