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FAQs related to Section 8 company
Hemlata Khandelwal / 2022-01-27 03:19:30

  1. What is section 8 company? 

The Section-8 company is called a non-profit organization. This is not intended to earn money. The company has a purpose is to take forward areas such as charity, arts, sports, research, and the environment.

Its objects include art, sports, science, education, commerce, social welfare, research, religion, protection of the environment, charity, or any other such thing; Intends to prohibit the payment of dividends to its members to anyone who intends to exert their profits, if any, or other income in promoting their goods.

 

  1. What are the features of Section 8 companies? 

The purpose of No Profit is that only companies registered under section 8 of service companies cannot distribute profits or assets to their members.

 

  • One resident director- A director of the company must be resident in India. A person is called a resident when he stays in India for at least 182 days in a financial year.

 

  • No Minimum Capital Requirement - There is no minimum level of the capital set, so a Section 8 company can be incorporated with capital as required by it.

 

  • Voting Rights - The right of voting to the members of a Section 8 company is based on the number of shares equal to any other company.

 

Laws applicable to an NGO

  • Trust on Indian Trusts Act, 1882
  • Society under the Societies Registration Act 1860
  • Section 8 company under the Companies Act, 2013

 

  1. What are the most important benefits of the Section 8 company? 
  • Stamp duty exemption for Company registration.
  • Tax deduction to donors of the company under section 80 g of income tax.
  • Exemption from minimum paid-up capital requirement.
  • The registered partnership firm may be a member in its capacity.

 

  1. What are the documents required to register a section 8 company?

Required documents

  • Memorandum of Association
  • Digital signature certificate
  • Articles of Association
  • Director identification number
  • ID proof for members (Passport, Aadhaar Card, or Voter ID)
  • A Passport size photo
  • Details of Director (if members are other companies / LLP)
  • Address proof
  • Self-declaration about director's direction in other companies
  • Rent agreement of your registered office
  • Property owner’s NOC 
  1. What are the steps to register a section 8 company in India?
    1. Step No. 1:

The person has to obtain the DSC (Digital Signature Certificate) of the proposed directors of the Section 8 Company. After receiving the DSC, they must file Form DIR-3 with ROC to obtain DIN.

    1. Step No. 2

Attached the Documents for DIN/DSC application:

  • Proof of identity
  • Address proof 
    1. Step No. 3

Now after DIR-3 is approved, ROC (Registrar of Companies) will allot a DIN to the proposed directors.

    1. Step No. 4

File INC-1 form on MCA with the ROC for company name (apply) application.

    1. Step No. 5

After approval, file form INC-12 to apply for a Section-8 company license.

Which documents are required to attach with form INC-12?

Documents to be attached with INC-12:

  • Draft MOA (Memorandum of Association)
  • Draft AOA (Articles of Association)
  • Form INC-14 for declaration by C.A
  • Form INC-15 for declaration
  • An estimate of Income and Expenditure for the next 3 years.

The membership pages of the company's Memorandum and Articles of Association shall be signed by each customer in the presence of at least one witness, mentioning his or her name, address, and occupation, which will authenticate the signature and add his or her name, address, and Business.

    1. Step No.6

 After this as soon as the form is approved, the license under section 8 in section 16 will be issued.

    1. Step No.7

After getting the license, fill-out the form SPICE- 32 on MCA (ROC) for company incorporation with the following attachments:

  • An Affidavit from Co-Clients of all Directors - INC-9
  • Declaration of deposit
  • KYC of all directors
  • Send DIR-2 along with your attachments ie PAN card and address proof of directors
  • Consent letter of all directors
  • Directors interest in other entities
  • Utility bill office address proof
  • NOC (Non-Objection Certificate) if the premises are leased/rented.
  • Draft MOA and AOA

 

If the ROC is satisfied with the forms submitted, it issues a Certificate of company registration in India with a unique company identification number (CIN).

 

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