The process for incorporating a Section 8 Company seems straightforward, but there is a lot of confusion regarding documents amongst many business owners.
The misuse of INC-14 and INC-15 forms causes unnecessary delays, or your application may be denied altogether. The confusion arises because most people do not know how to file these forms and their importance.
In this blog, you will learn the distinctions between INC-14 vs. INC-15 Section 8 Company documents, along with their uses.
Whether it is your intention to register or just require more information, you will definitely be enlightened regarding the same.
Let’s go through it step by step.
What is a Section 8 Company?
Section 8 Company refers to a non-profit organisation that comes under the provisions of the Companies Act of 2013. This organisation works for the benefit of society. For Educational and charitable purposes
Whereas a private company distributes its profit among the members, in the case of a Section 8 company, the profit is utilised towards achieving its principal purpose.
key Features
- No minimum capital requirement
- Limited liability
- Tax exemptions in specific situations
- Distinct legal personality
Due to its structure, the government demands stringent adherence to regulations at the time of incorporation, which led to the introduction of INC-14 & INC-15 forms.
What is INC-14 in a Section 8 Company?
INC-14 is a declaration given by a professional, stating that all the legal formalities have been completed while incorporating the company.
Who Should Sign INC-14?
INC-14 can be signed by:
- Chartered Accountant
- Company Secretary
- Cost Accountant
- Advocate
Use of INC-14
- Legal Verification
- Correctness of Documents
- Professional Verification
In essence, INC-14 is a legal endorsement by a professional.
What is INC-15 in the Section 8 Company?
“INC-15 is a self-declaration from the promoters of the company. According to the declaration, they will fulfil all the conditions of Section 8, including using the profits for the purposes of the organisation and not paying out any dividends to the members.”
Who Signs INC-15?
- Promoters or subscribers of the company
Purpose of INC-15
- Self-declaration of operating as a nonprofit
- Compliance with conditions of Section 8
- Ensuring there will be no profit distribution
Thus, INC-15 is a self-declaration.
INC-14 vs INC-15 Section 8 Company: Key Differences
Having a clear distinction can prevent any errors when filling out the forms. It will make sure that every form serves its intended purpose and is signed by the appropriate individual.
This way, there will be no chance of the application being rejected or needing to be submitted again.
| Basis | INC-14 | INC-15 |
| Nature | Professional Declaration | Promoter Declaration |
| Signed By | CA/CS/CMA/Advocate | Promoters |
| Purpose | Legal compliance certification | Intent and commitment |
| Role | External verification | Internal confirmation |
| Importance | Validates documents | Confirms objectives |
Simple Way to Remember
- INC-14 = Expert confirms legality
- INC-15 = Promoter confirms intention
Both are required and serve different roles.
Why INC-14 and INC-15 Are Important
Many founders consider these documents to be mere formalities. This is a mistake.
These documents ensure your credibility before the Registrar of Companies. Your registration process will fail without them.
Key Reason
- Promotes transparency
- Avoids misuse of non-profit status
- Demonstrates legal compliance
- Increases the chance of acceptance
Therefore, submitting both documents should not be considered an option but a necessity.
When Are INC-14 and INC-15 Filed?
Time is very important when registering a business.
These two types of forms are submitted at the time of incorporation while applying for a Section 8 license.
Filing Stage
- The SPICe+ Form
- At the time of applying for a license
- Before approval
If these forms are missing, your application might face a delay.
Common Mistakes to Avoid
Even a minor mistake can lead to a delay. Some of the mistakes that are often made are as follows:
1. Role Confusion
Many assume both types are thought to have the same function. This is not true.
2. Wrong Signature
INC-14 requires a signature from a professional, not a promoter.
3. Lack of Information
Omissions can result in your application being rejected.
4. Late Submission
Late submissions delay the process.
5. Repetitive Declarations
Generic content without accuracy can rise red flag.
Be sure to review everything before submission.
Step-by-Step Filing Process
This is a basic process that will help you understand where the above structures belong:
1. Apply for name approval
The process starts with selecting a suitable name and then registering via the MCA portal. The name should be relevant to the mission of the non-profit.
2. Prepare incorporation documents
Begin by selecting an innovative and distinctive name and then register through the MCA website. Ensure that the name chosen is in line with the nature of your non-profit organisation.
In addition, it should not be closely related to any other company’s name or brand.
3. Draft MOA and AOA
The MOA and the AOA have to be well written. The Memorandum of Association should state the main objectives of the business.
In particular, one of the objectives will be the purpose of the business which is to conduct itself as a non-profit company.
4. Attach INC-14 (professional declaration)
Here you will have to provide Form INC-14. It is a declaration by a Practicing professional such as a CA, CS, CMA or Advocate stating that all the legal formalities have been completed.
It should be submitted without making any mistakes since this may lead to objections.
5. Attach INC-15 (promoter declaration)
In this step, attach INC-15. This is an undertaking by the promoters that they will comply with all the provisions of Section 8.
This means the promoters will use any profit solely for the purpose of the corporation and without sharing the same among the members. Remember, all the promoters must sign the form.
6. Submit SPICe+ form
After completion of all the steps, the SPICe+ form can be submitted through the MCA portal. All information regarding the company, directors, and incorporation will be found in the SPICe+ form.
Ensure that all the data you provide is accurate before making your submission.
7. Await approval
Once you submit the form, it is examined by the Registrar of Companies. All documentation and declarations are scrutinised for their accuracy.
In case everything looks fine, you get your Section 8 company approval. Otherwise, you might have to make some changes.
Practical Example
Assume that you wish to establish an NGO focused on education.
- Your attorney reviews documents/files INC-14
- You and your partners ensure the purpose-sign INC-15
Together, these two compliance requirements.
How to Draft INC-14 and INC-15 Properly
A Good draft is even more important than what most people think.
For INC-14
- Letterhead to be used
- Compliance to be mentioned
- Signature and stamp to be put
For INC-15
- Clear mention of nonprofit objective
- Language should not be ambiguous
- All promoters to sign
Why Choose MY LEGAL BUSINESS LLP for Section 8 Company Registration
Formation of a Section 8 Company requires precision and legal assistance at all levels. Even the smallest error while filing documents such as INC-14 and INC-15 can lead to rejection.
This is exactly why MY LEGAL BUSINESS LLP has a special role to play.
Expert Handling of Legal Forms
The team takes care of drafting INC-14 as well as INC-15 forms to avoid any chances of rejection and saves your time.
End-to-End Support
Everything starting from approval of the company name to its registration will be taken care of under one roof without having to contact various professionals.
Affordable and Transparent Pricing
You do not have to worry about any hidden costs with MY LEGAL BUSINESS LLP.
Personalised Guidance
Since every company has different goals, you receive personalised advice based on your requirements.
MY LEGAL BUSINESS LLP is your reliable choice for hassle-free registration of a Section 8 Company.
Conclusion
It is very important to understand the importance of having the INC-14 & INC-15 Form for a Section 8 Company in order to get a hassle-free registration process.
If both of them are correctly prepared, then it helps in avoiding delays and creating a good relationship with concerned authorities.
If you are going to make Section 8 Company Registration, then make sure you either prepare these forms yourself or seek professional help. This will help you to avoid unnecessary hassles.
Are you ready to avoid delays in Section 8 Company Registration? Contact us at MY LEGAL BUSINESS LLP today.
Frequently Asked Questions
What is the major difference between INC-14 and INC-15?
INC-14 is a declaration from a professional declaring the legality of the company. INC-15 is a declaration from the promoters that it will be a non-profit company.
Is it necessary to have an INC-14 for a Section 8 Company?
Yes, it is necessary to get this document as it provides the necessary certification for the registrar.
Who is authorised to sign INC-15?
All promoters or subscribers can sign INC-15.
Are INC-14 and INC-15 to be done later?
They are to be submitted during the incorporation process. Any delay may cause problems for approval.
ALSO READ
Difference between Company Limited by Shares and Company Limited by Guarantee
How to choose the right license for your Startup
