Section 8 Company Registration
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Section 8 Company Registration
Section 8 Company is a Company licensed under the Companies Act, 2013 which is registered as Non Profit Organization (NGO) which has main object for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
The profits or any other income of the Company cannot be applied elsewhere than promoting the business objects of the company and neither pay any dividend to its members also, therefore, Section 8 Company is a company registered for charitable or not-for-profit purposes.There is also need for obtaining a license from the Government for incorporating such kind of companies, but rest it has all the features like any other limited companies. In essence, unlike a regular company, where owners and shareholders can make profits or receive dividends, no money gets out of a Section 8 company.
Advantages of Section 8 Company Registration
The greatest benefit of section 8 companies is limited liability. Section 8 Companies, are treated as a single entity. If anything happens to the company, its members are not personally affected; members are only liable for unpaid shares.
Section 8 company enjoys significant tax benefits. It could benefit from income-tax exemptions, or from the provision wherein people donating money to these companies receive income deductions in their income-tax liability.
Continuity of Existence
Section 8 companies (NPO) enjoy permanent succession irrespective of its shareholders, because it has its own separate legal entity. Shareholders and employees act “as agents of the company,
Unlike other form of entities like Private and Public companies, there are certain exemptions from the compliances regarding Meetings, filings are granted to section 8 company under the companies act, 2013
No Stamp Duty
Section 8 Companies are exempted from payment of stamp duty, therefore No stamp duty is payable on the Memorandum and Articles of Association if a company is to be registered under these provisions.
No need to use prefix (ltd or pvt ltd)
Section 8 companies are allowed to dispense with the use of term ‘limited’ or ‘private limited’ from their names . This helps the company to enjoy limited liability without disclosing to the public the nature of liability of its member
Documents For Section 8 Company Registration
- Copy of PAN Card
- Copy of Adhar Card/ Voter ID Card
- Electricity / Water Bill
- Landlord NOC (as per format given)
- Passport size photo of directors
- Copy of rent agreement
- Copy of owned property papers (if)
Cost of Section 8 Company Registration
|TAN & PAN Fees||180|
|RD Approval Fees||2000|
|Notary Stamp Charges||500|
Procedure For Registering Section 8 Company
Obtaining DSC & DIN(1-3 Working Day)
- Digital Signature Certificate(DSC) and Director Identification Number(DIN) is required for the proposed Directors of the Company. DIN and DSC can be obtained for the proposed Directors within 5 to 7 days.
Name Approval(2-3 Working Day)
- Our team will get in touch for a unique name and get the name approved.Once the name gets approved, our team will draft Constitutional Documents of proposed Company i.e. MOA and AOA.
Government License(3-7 Working Day)
- Our team shall file the documents required for issuance of license with the authority.Once the license is obtained from the Ministry our team shall proceed for the incorporation of the company.
Document Submission(4-5 Working Day)
- After the review of all the documents required, we will submit the same to MCA and once it gets approved by the ministry we will send the MOA & AOA via mail and DSC through courier.
FAQ’s About Section 8 Company Registration
Who can apply for registration of a Section 8 Company?
Any person or an association of persons intending to register a limited liability company for objects specified below can opt to apply for registration of Section 8 Company. The following have to be proved to the satisfaction of the Central Government that: (a) its objects includes promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object; (b) the company after incorporation intends to apply its profits, if any, or other income in promoting such objects only; and (c) the company intends to prohibit the payment of any dividend to its members.
Who is authorized to issue license to Section 8 Companies?
Registrars of Companies of respective jurisdictions are delegated with the powers of Central government to issue license to Section 8 Companies
Can a Company with unlimited liabilities be registered as a Section 8 Company?
No. Rule 20(1) of the Companies (Incorporation) Rules, 2014 provides that only a limited company registered under this Act or under any previous company law shall make an application to the Registrar for issue of license. Therefore, a company with unlimited liabilities cannot be registered as a Section 8 Company.
Can a One Person Company (OPC) be incorporated as or convert into a Section 8 Company?
No. Rule 3 of the Companies (Incorporation) Rules, 2014 prohibits a one person company to be incorporated as section 8 company or to convert into a Section 8 Company.
Whether existing section 25 companies registered under the Companies Act, 1956 are required to obtain license under section 8 of the Companies Act, 2013?
No, the existing section 25 companies are not required to obtain license under Companies Act, 2013.The existing registrations and licenses issued under the 1956 Act, (upon repeal) shall be protected under section 465 of the Companies Act, 2013