Checklist for Section 8 Company Incorporation

Section 8 The Companies Act of 2013's Section 8 allows for the registration of nonprofit organization as a corporation, trust, or society

Incorporation of section 8 company can be for the following Purposes

For the goal of advancing the arts, business, science, education, research, social welfare, charity, the preservation of the environment or any other social welfare-related objective.

• As long as they use their income to advance the company's goals.
• Additionally, it forbids paying dividends to its members.
• Section 8 company is registered to do business for non profit or philanthropic purposes.
• The Ministry of Corporate Affairs is in charge of section 8 company registration, whilst the State Government's Registrar of State is in charge of trust and society registration.

 In contrast to trust and society, Section 8 Company offers additional advantages. Donors, government agencies, and other stakeholders are more likely to trust a business of this type.

Requirements

• The terms "LTD" or "PVT LTD" need not be present in a section 8 company's name.
• With effect from June 5, 2015, there is no longer a necessity for a minimum capital amount under this statute.

Documents

For a section 8 company to be incorporated, the following documents are necessary:

• Identity Proof of all the directors – a copy of the PAN card (Mandatory);
• Address verification options include a copy of your driver's license, passport, phone bill, or electricity bill.
• All the directors' passport-sized photos.
• Rent Agreement if the company's registered office is rented;
• Utility bills for the registered office, Form DIR-2, the director's stake in other entities, and the director's consent to operate as a director.

Section 8 of a Like other businesses, the corporation must meet with annual compliance requirements; if it doesn't, it will be considered dormant and may be removed from the register.

The Procedure of Incorporation of Section 8 Company

The procedures to incorporate a Section 8 company are as follows:

DSC

First, if the company's directors and promoters don't already have them, you should obtain their Digital Signature Certificates(DSC). An application is submitted to the certifying authority in order to get DSC.

DIN

Secondly, get the Directors Identification Number (DIN) for each of the company's directors.

Name Approval

An application in Form INC-1 will be submitted to the company registrar for name approval. The applicant may submit a maximum of six names for approval. The 60-day approval period applies to names. According to the 2014 business incorporation laws, phrases like foundation, association, forum, council, chambers, etc. must be included in section 8 companies.

Draft MOA & AOA

Once the name has been approved, the next stage is to prepare the MOA and AOA, which must then be submitted to the ROC along with other paperwork for the license in accordance with Section 8 of the Companies Act of 2013. The signatories to the memorandum must affix their signatures to the MOA and AOA.

Application for License

For the purpose of issuing a license to the section 8company under the 2013 Companies Act, Form INC 12 is submitted to the ROC.

With the following attachments:

• INC 13 (Memorandum of Association);
• The Article of Association(AoA);
• INC 15 (Declaration by subscribers of the MOA);
• Statement of Income & Expenditure;
• List of directors of the company;
• The subscriber page of MOA & AOA should be hand written by subscribers and witnesses.

After approval of the form, the license is issued in Form INC 16.

Incorporation Application

Incorporation application is filed in form INC 7 along with the following attachments:

• Memorandum of Association;
• The Article of Association;
• Declaration by professional in form INC 8;
• Affidavit by each subscriber of the memorandum in form INC9;
• Address Proof of the subscribers;
• Identity proof of subscribers;
• Specimen Signature in Form INC 10;
• PAN card;
• NOC if there is any change in the name of promoters after name approval;
• Board Resolution authorizing to subscribe to MOA;
• Any other attachments, if any.

Registered Office

Form INC 22 is to be filed for the situation of the registered office of the company along with the following attachments:

• Rent Agreement/ Lease Deed;
• Electricity Bill of not older than 2 months;
• NOC on the letterhead of the promoter for using the premises.
• Appointment of Directors
• Form DIR 2 must be filed with the accompanying attachment for director appointment purposes:
• Consent to act as a director in form DIR 2.

Certificate of incorporation

The registrar shall issue the certificate of incorporation together with the specific Company Identification Number following satisfaction of the forms submitted to the ROC.

Benefits of Section 8 Company Registration

The following benefits can be enjoyed:

1. Separate legal entity - A section 8 company is distinct from its members and is a separate legal entity.
2. Exemption of stamp duty - A Section 8 Company is not required to pay registration stamp duty.
3. Membership - A registered partnership firm is eligible to join as itself.
4. Tax benefits - In India, Section 8 Companies are eligible for a number of tax incentives.
5. Exemption to the donors - Under sections 12A and 80G of the Income Tax Act, donors to a section 8 company are entitled for tax exemptions.

Penalty Provisions

If a company violates this section's requirements, the company will be subject to a fine that cannot be less than ten lakh rupees and cannot be less than one crore rupees, and the directors and officers who committed the violation will be subject to either up to three years in prison or a fine that cannot be less than twenty-five thousand rupees and cannot be less than twenty-five lakh rupees, or both.

Conclusion

A limited company's incorporation process is similar to that of a section 8 business. Section 8 businesses have the most dependable and robust organizational structures because to better laws. Contact jordensky if you have any questions about incorporating a section 8 firm.

FAQ's

Que - Who may submit an application to register a Section 8 company? ‍

Ans - Any person or group of people may submit an application for a section 8 business, provided that:

• The company's mission is to further the values of the arts, sciences, research, culture, education, and general social welfare.
• Following incorporation, the business invests its earnings in advancing its goals.
• The business does not provide shares or dividends to its shareholders.

Que - Who grants a Section 8 company's licence? ‍

Ans - The licence for a Section 8 company may only be issued by the Registrars of Companies of the relevant jurisdictions with permission from the Central government.

Que - Can a One Person Company (OPC) be registered or transformed into a Section 8 Company?

‍Ans - No. OPC cannot be incorporated or changed into a Section 8 company under the Companies Incorporation (Rules), 2014 regulations.

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