Section 8 Company Registration

Section 8 Company registration is designed for non-profit organizations that aim to promote various societal causes, such as education, sports, science, religion, research, social welfare, and cultural activities.


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Overview

Section 8 Company registration is designed for non-profit organizations that aim to promote various societal causes, such as education, sports, science, religion, research, social welfare, and cultural activities. Unlike other business entities, a Section 8 Company uses its revenue solely to further its objectives rather than distributing profits among members. This type of company is governed under Section 8 of the Companies Act, 2013. It requires a minimum of two directors for a private limited company and three directors for a public limited company, but does not require a minimum paid-up or authorized capital. This page outlines the key aspects of Section 8 Company registration, including requirements, regulations, advantages, eligibility, necessary documents, the registration process, and why Kickstart Business Advisors is your ideal partner in this journey.

Requirements of Section 8 Company Registration

  • Minimum Number of Directors: A minimum of two directors is required for a private Section 8 Company, and three for a public Section 8 Company.
  • Paid-up Capital: No minimum paid-up capital is required. The company should not include “Limited” or “Private Limited” in its name.
  • MOA and AOA: The Memorandum of Association (MOA) and Articles of Association (AOA) must state the company’s objectives clearly. Any profits earned must be used exclusively for the company’s objectives.
  • Management: Managed by the company’s directors, not trustees or other members.
  • Digital Signature Certificate (DSC): Required for all forms submitted during registration, obtained from government certifying agencies.
  • Director Identification Number (DIN): Required for all proposed directors, obtained by applying through the MCA portal.

Regulations

Section 8 Companies are regulated under the Companies Act, 2013. They must maintain accounts and file returns with the Registrar of Companies. The MOA and AOA must comply with regulations set by the Central Government, and tax and GST provisions must be adhered to.

Advantages of Section 8 Company Registration

  • No Minimum Capital Requirement: Flexibility in capital structure as there’s no minimum threshold.
  • Stamp Duty: Exempt from stamp duty on MOA and AOA.
  • Tax Benefits: Exempt from certain taxes under the Income Tax Act, 1961. Donations to Section 8 Companies are tax-exempt under sections 12A and 80G.
  • Limited Liability: Members are only liable for their share and are not personally responsible for the company’s losses.
  • Legal Identity: Provides a distinct legal identity and perpetual existence.
  • Authenticity: Seen as more credible due to regulation under the Companies Act and compliance with tax laws.

Eligibility

  • Application: Can be made by individuals or Hindu Undivided Families (HUF).
  • Directors: At least one director must be a resident of India.
  • Objectives: Must involve charitable purposes such as education, sports, research, etc.
  • Profit Distribution: Profits cannot be distributed among members but must be used towards the company’s objectives.
  • Remuneration: Members cannot receive remuneration in cash or kind.

Documents Required for Section 8 Company Registration

To start with the process of registration, the applicant first needs to know the documents required for Section 8 Company Registration. These are as follows –

  • Directors and shareholders PAN Card
  • Aadhar Card
  • Bank Statement
  • Utility Bills
  • Driving License/ Passport/ Voter ID
  • Director’s and Shareholder’s photographs
  • Rent Agreement of the Registered Entity
  • DIN & DSC of Directors
  • Memorandum of Association & Articles of Association

Registration Process

The Section 8 registration process includes the following steps:

  • Obtain DSC: For the proposed directors to sign all forms.
  • Obtain DIN: For all proposed directors using form DIR3.
  • Choose a Company Name: Ensure it is unique and complies with MCA regulations.
  • File Incorporation Application: Submit forms INC32 along with MOA and AOA.
  • Submit INC12: For the incorporation application, ensuring compliance with regulations.
  • Receive Certificate of Incorporation: Issued by MCA in form INC16 after successful registration.

Why Kickstart Business Advisors?

Navigating the complexities of Section 8 Company registration can be daunting. Kickstart Business Advisors offers expert assistance to streamline the process, ensuring compliance with all regulations. Our experienced team of lawyers, CA, and CS professionals will guide you through every step, from document preparation to final registration, saving you time and ensuring smooth incorporation.

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