<\/span><\/h2>\n\n\n\nAny Person or Association of Persons (AOP), wants to incorporate a Company with limited liability and meets the criteria laid down u\/s 8, can apply for a License u\/s 8.<\/strong><\/p>\n\n\n\nBasic Conditions for incorporation of Sec. 8 Company<\/u><\/strong><\/p>\n\n\n\n specifies in its objects, to promote-<\/p>\n\n\n\n
\u2022 Commerce<\/p>\n\n\n\n
\u2022 Art,<\/p>\n\n\n\n
\u2022 Science<\/p>\n\n\n\n
\u2022 Sports,<\/p>\n\n\n\n
\u2022 Charity,<\/p>\n\n\n\n
\u2022 Education,<\/p>\n\n\n\n
\u2022 Religion<\/p>\n\n\n\n
\u2022 Research<\/p>\n\n\n\n
\u2022 Social Welfare<\/p>\n\n\n\n
\u2022 Protection of Environment or,<\/p>\n\n\n\n
\u2022 any such other object,<\/p>\n\n\n\n
<\/span>Laws Under Which NGOs Can Register in India<\/u><\/strong><\/span><\/h2>\n\n\n\nIn India, Non-Governmental Organizations (NGOs) can be registered under three primary legal frameworks, depending on their objectives and operational structure.<\/p>\n\n\n\n
They may be established as a Trust under the Indian Trusts Act, 1882; as a Society under the Societies Registration Act, 1860; or as a Section 8 Company under the Companies Act, 2013. Each of these forms has its own legal requirements, governance structure, and compliance obligations.<\/p>\n\n\n\n
<\/span>Rights of Sec.8 Company:<\/u><\/strong><\/span><\/h3>\n\n\n\na) A Section 8 Company is not required to add the words \u201cLimited\u201d or \u201cPrivate Limited\u201d to its name.<\/p>\n\n\n\n
b) As per Sec. 8(2), <\/strong>all the Privileges <\/strong>and obligations <\/strong>of Limited Companies shall apply for a Sec. 8 Company.<\/strong><\/p>\n\n\n\nc) As per Sec.8 (3), <\/strong>A firm <\/strong>may be a Member of Section 8 Company.<\/strong><\/p>\n\n\n\n<\/span>Characteristics Of Section 8 Companies<\/u><\/strong><\/span><\/h2>\n\n\n\nRegistering an NGO under Section 8 of the Companies Act, 2013 offers several advantages, including the following:<\/p>\n\n\n\n
\nNo Minimum Capital Needed: <\/strong>A Section 8 Company does not have any mandatory minimum capital for incorporation.<\/li>\n\n\n\nTax Exemptions:<\/strong>Section 8 Companies are eligible for various tax benefits under the Income Tax Act, 1961, including exemptions under Sections 12A and 80G, allowing donors to claim deductions.<\/li>\n\n\n\nExemption from Stamp Duty: <\/strong>Unlike other companies, a Section 8 Company enjoys a significant benefit by being exempt from paying stamp duty on its Memorandum of Association (MOA) and Articles of Association (AOA) during the incorporation process.<\/li>\n\n\n\nLimited Liability:<\/strong> The members of a Section 8 Company enjoy limited liability, meaning they are responsible only to the extent of their shareholding and are not personally liable for the company\u2019s debts or losses.<\/li>\n\n\n\nSeparate Legal Identity:<\/strong> A Section 8 Company holds a separate legal identity, distinct from its members. It remains operational despite changes in membership, and even registered partnership firms can participate as members or directors in their individual capacity.<\/li>\n\n\n\nCredibility:<\/strong> Due to stringent regulatory oversight, Section 8 Companies are perceived as more transparent and credible by donors, government agencies, and other stakeholders.<\/li>\n\n\n\nExemption for donors:<\/strong> Donations made to a Section 8 Company registered under Sections 12A and 80G of the Income Tax Act, 1961, qualify for tax deductions,<\/li>\n<\/ol>\n\n\n\n<\/ol>\n\n\n\n<\/span>Documents Required for Section 8 Company Registration<\/u><\/strong><\/span><\/h2>\n\n\n\nThe proper documentation is required to streamline the process of registration:<\/p>\n\n\n\n
For Directors and Members:<\/strong><\/p>\n\n\n\n\nPAN card<\/strong> (for Indians) \/ Passport<\/strong> (for foreigners)<\/li>\n\n\n\nID proof<\/strong> \u2013 Aadhaar, voter ID, passport, or driving license<\/li>\n\n\n\nResidential proof<\/strong> \u2013 Latest utility bill or bank statements, not older than two months.<\/li>\n\n\n\nPassport-size photo<\/strong> of each director\/member<\/li>\n<\/ul>\n\n\n\nFor Registered office Proof<\/strong><\/p>\n\n\n\nL<\/strong>atest copy of Utility bill (electricity, water, gas, etc.) + No Objection Certificate from the owner.<\/p>\n\n\n\n<\/span>Key Forms Required for Section 8 Company Registration<\/u><\/strong><\/span><\/h2>\n\n\n\nName of the form <\/strong><\/td>Purpose of the Form<\/strong><\/td><\/tr>Spice+ Part A<\/td> For Name Reservation<\/td><\/tr> SPICE+ Part B<\/td> Application for incorporation of the Company<\/td><\/tr> INC 13<\/td> Memorandum of Association (MOA)<\/td><\/tr> INC 31<\/td> Articles of Association (AOA)<\/td><\/tr> Agile Pro<\/td> For GST,PF, ESI and Bank Account Opening<\/td><\/tr> INC-9<\/td> Declaration by subscribers and first directors<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<\/span>Step-by-Step Registration Process for a Section 8 Company<\/u><\/strong><\/span><\/h3>\n\n\n\nThe procedure for registration of a Section 8 company is same as in case of private\/public company.<\/p>\n\n\n\n
STEP 1: <\/strong>Application for reservation of name in Form Spice+ Part A<\/strong>.<\/p>\n\n\n\nUse the Spice+ Part A form on the MCA website to reserve a company name that matches the objective of the company. (Name and Incorporation both can be applied in Spice+ Part B form Also.<\/p>\n\n\n\n
<\/span>Check for name availability before applying to avoid rejection<\/em><\/strong>.<\/em><\/span><\/h3>\n\n\n\nThe following should be noted: –<\/strong><\/p>\n\n\n\n\nThe name of the company should be related with the main objects of the company.<\/li>\n\n\n\n The proposed name should not be covered under the domain of undesirable names specified in Rule 8 of Companies(Incorporation)Rules, 2014<\/li>\n\n\n\n According to Rule 8(7) of the Companies (Incorporation) Rules, 2014, the name of a Section 8 Company should include terms such as Foundation, Forum, Association, Federation, Chambers, Confederation, or other words of a similar nature that reflect its charitable or non-profit character.<\/li>\n<\/ul>\n\n\n\nSTEP 2: <\/strong>Application for incorporation (Form Spice+ Part B)<\/strong><\/p>\n\n\n\nAfter Getting the name approval, applicant can apply for incorporation of a company by filing eformSpice+ Part B along with the following attachments:-<\/p>\n\n\n\n
1. Memorandum of Association;<\/p>\n\n\n\n
2. Article of Association;<\/p>\n\n\n\n
3. A Declaration by the subscriber to the memorandum in Form INC 15<\/p>\n\n\n\n
4. Pan and Id Proof of the Members\/Directors<\/p>\n\n\n\n
5. Address Proof of the Members\/Directors<\/p>\n\n\n\n
6. Projected Income and Expenditure Statement<\/p>\n\n\n\n
6. Proof of Registered office of the company<\/p>\n\n\n\n
7. NOC from the owner of the premises<\/p>\n\n\n\n
STEP 3: <\/strong>Certificate of Incorporation<\/p>\n\n\n\nIf the Concerned Registrar of Companies is satisfied that all the requirements of the Companies Act, 2013 havebeen complied with, a Certificate of Incorporation is issued which carries a distinctive Company IdentificationNumber (CIN).<\/p>\n\n\n\n
Key Exemptions Available to Section 8 Companies<\/u><\/strong><\/p>\n\n\n\nSection\/Provision <\/strong><\/td>Exemption<\/strong><\/td><\/tr>Name Requirements (Section 8(1))<\/td> Exempt from using the words “Limited” or “Private Limited” in the name. <\/td><\/tr> Minimum Paid-up Capital<\/td> No minimum capital requirement. <\/td><\/tr> Annual General Meeting (AGM) (Section 96) <\/td> Can hold AGM at any place in India, not necessarily at the registered office.<\/td><\/tr> Board Meetings (Section 173) <\/td> Required to hold at least one meeting every six months,<\/td><\/tr> CARO (Companies Auditor’s Report Order) <\/td> Exempt from CARO requirements. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<\/span>What to Do After Registration (Post-Incorporation Compliance)<\/strong><\/span><\/h3>\n\n\n\nAfter your Section 8 company is registered, you must follow some rules to stay compliant:<\/p>\n\n\n\n
\nHold at least two board meetings<\/strong> every year<\/li>\n\n\n\nMaintain proper books of accounts<\/strong><\/li>\n\n\n\nGet your accounts audited<\/strong><\/li>\n\n\n\nFile income tax returns<\/strong><\/li>\n\n\n\nFile annual forms like AOC-4<\/strong> and MGT-7<\/strong> with the MCA<\/li>\n\n\n\nAOC-4: Annual filing of financial statements.<\/li>\n\n\n\n MGT-7: Annual return of the company, including details of directors, shareholders, and other key information.<\/li>\n\n\n\n Apply for registrations to avail tax exemptions and benefits.<\/li>\n<\/ul>\n\n\n\n<\/span>Tax Benefits for Section 8 Companies<\/u><\/strong><\/span><\/h3>\n\n\n\nSection 8 companies enjoy several tax-related benefits:<\/p>\n\n\n\n
\nSection 12A Registration:<\/strong> Income is tax-free if used for charity.<\/li>\n\n\n\nSection 80G Registration:<\/strong> Donors get tax deductions<\/li>\n\n\n\nFCRA Registration:<\/strong> Allows receiving foreign donations if registered under FCRA.<\/li>\n<\/ul>\n\n\n\n<\/span>Conclusion<\/u><\/strong><\/span><\/h2>\n\n\n\nRegistering a Section 8 company is a good option for anyone who wants to start a non-profit organization in India. It allows you to work for charitable purposes like education, health, environment, or social welfare. The process involves getting approval from the government, but it also comes with benefits like tax exemptions and credibility. With the right planning and paperwork, setting up a Section 8 company can help you make a real difference in society.<\/p>\n\n\n\n
<\/span>Frequently Asked Questions (FAQs)<\/u><\/strong><\/span><\/h2>\n\n\n\nWhat is a Section 8 Company?<\/strong><\/p>\n\n\n\nA Section 8 company, formed under the Companies Act, 2013 in India, stands out as a non-profit organization dedicated to promote charitable, social, educational, or similar causes without the intent of distributing profits to its members. Its core purpose is to foster initiatives aimed at societal betterment, such as promoting education, health, environmental conservation, or humanitarian causes<\/p>\n\n\n\n
<\/ol>\n\n\n\nWho is eligible to set up a Section 8 Company?<\/strong><\/p>\n\n\n\nA Section 8 Company can be set up by any individual, group of individuals, or legal entities, including companies and societies.<\/p>\n\n\n\n
What are the objectives of section 8 company?<\/strong><\/p>\n\n\n\nThese companies are typically formed for the purpose of furthering a specific charitable or not-for-profit objective, rather than for generating profits for its members or shareholders. The key goal is to serve society and contribute to social, cultural, educational, or environmental causes.<\/p>\n\n\n\n
Is appointing an auditor compulsory for a Section 8 Company?<\/strong><\/p>\n\n\n\nYes, it is mandatory. Section 8 companies must adhere to audit and annual compliance requirements similar to other companies under the Companies Act, 2013.<\/p>\n\n\n\n
Can a Section 8 Company be transformed into another form of company?<\/strong><\/p>\n\n\n\nYes, but such a conversionlike changing into a private or public limited companyrequires prior approval from the Regional Director.<\/p>\n\n\n\n
What is the minimum paid up capital requirement for section 8 company?<\/strong><\/p>\n\n\n\nIn the companies act, 2013, there is no minimum paid up capital requirement is specified.<\/p>\n\n\n\n
Are Section 8 Companies allowed to share profits with their members or shareholders?<\/strong><\/p>\n\n\n\nNo, these companies must reinvest any profits back into their primary objectives and are not permitted to distribute them among members or shareholders.<\/p>\n\n\n\n
Is it possible to change a Section 8 Company into a profit-making company?<\/strong><\/p>\n\n\n\nNo, once registered as a Section 8 Company, it cannot be converted into a for-profit entity.<\/p>\n\n\n\n
Are there specific audit requirements for Section 8 Companies?<\/strong><\/p>\n\n\n\nYes, like other companies, Section 8 entities are required to get their accounts audited annually by a qualified chartered accountant in compliance with the Companies Act, 2013.<\/p>\n\n\n\n
<\/ol>\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"
A Section 8 company, formed under the Companies Act, 2013 in India, stands out as a non-profit organization dedicated to promot charitable, […]<\/p>\n","protected":false},"author":3,"featured_media":138,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-83","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-section-8-company"],"yoast_head":"\n
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