Section 8 companies are nonprofit organizations registered under the Companies Act, 2013 in India. These companies are formed for promoting art, science, charity, education, religion, or any other social cause, with the aim of providing services to the public.
In this article, we will discuss the registration process for Section 8 companies, the eligibility criteria, and the documents required for the same.
Eligibility criteria for Section 8 Company Registration:
- A minimum of two Directors are required to register a Section 8 Company.
- The proposed company must have a unique name. Before applying for registration, one must check the name availability with the Registrar of Companies (ROC).
- The company must have a registered office address in India.
- The proposed company must have a minimum of 7 members for registration.
Documents Required for Section 8 Company Registration:
- Memorandum of Association (MOA): MOA is a legal document that contains the objectives and scope of the company. It is a document that must be filed with the Registrar of Companies at the time of incorporation.
- Articles of Association (AOA): AOA is a document that contains the internal rules and regulations of the company. It is also filed with the Registrar of Companies at the time of incorporation.
- PAN Card: PAN Card is required for all directors and shareholders of the company.
- Identity Proof: Identity proof such as an Aadhaar card, Voter ID, Passport, or Driving License must be submitted to all directors and shareholders.
- Address Proof: Address proof such as electricity bill, telephone bill, bank statement, or Aadhaar card must be submitted for all directors and shareholders.
- Registered Office Address Proof: The company must have a registered office address, and proof of the same must be submitted. A rental agreement, sale deed, or electricity bill can be submitted as address proof.
- Digital Signature Certificate (DSC): DSC is a digital signature used for the signing of electronic documents. All directors must have a DSC for the registration process.
- Director Identification Number (DIN): DIN is a unique identification number assigned to all directors. It must be obtained before the registration process.
Registration Process for Section 8 Companies:
- Obtain Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for all directors.
- Apply for name availability with the Registrar of Companies (ROC) in Form SPICe+.
- Once the name is approved, file the incorporation documents in Form SPICe+ with the ROC along with the MOA and AOA.
- After verification of the documents, the ROC will issue a Certificate of Incorporation.
- Apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) with the Income Tax Department.
Benefits of Section 8 Company:
- Tax Exemption: Section 8 companies are eligible for tax exemption under the Income Tax Act, of 1961, and donors to these companies are also eligible for tax benefits.
- Limited Liability: Section 8 companies have limited liability, which means the liability of the members is limited to the amount of their contribution to the company.
- Credibility: Section 8 companies are registered under the Companies Act, 2013, which adds credibility to the organization and enhances its reputation.
- No Minimum Capital Requirement: Unlike other companies, Section 8 companies do not have any minimum capital requirement for incorporation.
- No Stamp Duty: Section 8 companies are exempted from paying stamp duty on the registration documents.
d tax exemptions, limited liability, and easier access to funding. However, it is important to ensure that the activities of the company align with the objectives of the Section 8 company and that the company is run in a transparent and accountable manner.