Section 8 Company
Section 8 Company Registration
The main goal of forming a Section 8 corporation is to promote non-profit goals including trade, business, the arts, charity, education, religion, environmental protection, social welfare, sports research, and so on.
A minimum of two directors are required to form a Section 8 Corporation. In addition, in the case of a Section 8 Company, there is no requirement for a minimum paid-up capital.
In India, a non-profit organisation can be registered with the Registrar of Societies or as a non-profit company under the Company Act, 2013, Section 8 Company.
If this firm makes any earnings, they are used to further the company’s goals rather than being paid as dividends to its shareholders.
Under the previous Companies Act, 1956, a Section 8 Company was the same as a Section 25 Company of the new Companies Act of 2013. It has now been renamed Section 8.
Section 8: Eligibility of Businesses
Who can Incorporate a Section 8 Company?
If an individual or group of individuals has the following goals, they can file for Section 8 Company Registration. The goals must be validated to the satisfaction of the government at large.
- If the company’s goal is to promote science, business, education, art, sports, research, charity, social welfare, environmental protection, or any other goal, it must declare it.
- If the firm intends to invest any earnings or income produced after incorporation only in the advancement of such goals; if the company does not intend to issue dividends to its shareholders.
Documents Required for Section 8 Company
- Director Identification Number Registration (DIN)
- Memorandum of Association Articles of Association Passport size Photographs Digital Signature Certificate
- Aadhar Card, Passport, and Voter ID are examples of member identification.
- Director Address Proof Specifications
How to obtain Digital Signature for Directors?
In India, a Trust is controlled by the trustees mentioned in the Trust Deed. Section 8 Company will be governed by the Board of Directors, similar to a Private Limited Company. During the process of incorporation, the DSC is obtained for the proposed directors. The following documents must be submitted.
- PAN or Aadhar card.
- Drivers License/ Passport/ Election ID/ Government Issued ID.
After submitting these documents, the applicant must complete an OTP and eKYC procedure to obtain a DSC in their name.
Section 8 Company Name Approval
- Simultaneous to the Digital signature application processing, an application for name approval can be initiated for the Section 8 Company to the MCA.
- The name of a Section 8 Company must end with the words like Foundation, forum, association, federation, chambers, council, electoral trust. Etc.
- The Name approval process can be completed within with24-72 hours.
- Memorandum of Association and AOA (Articles of Association)
- They are drafted after obtaining the name approval and other documents included in INC12 filed with the ROC.
- It is necessary to sign and mention his name, description, address, and occupation in the MOA and AOA subscription.
- It is necessary to have one witness present who will attest the signature.
Process of Incorporation
Step by step procedure to incorporate a Section 8 Company
- In the first step, we obtain the DSC for the proposed Directors of the Section 8 Company.
- After obtaining the DSC, file form DIR 3 with the ROC for getting a Director Identification Numbers.
- After the DIR 3 is approved, the ROC will allot the Director Identification Number to the proposed Director.
- To apply for a company name, it is necessary to file Form INC 1 with ROC.
- It is required to file Form INC 12 after receiving approval to apply for a licence for the Section 8 Company. Following approval, a Section 8 licence will be given in Form INC 16.
- After obtaining the licence, file SPICe Form 32 with the ROC for incorporation, together with the affidavits, declarations, KYC, permission letter, draught MOA, and AOA.
The ROC issues a Certificate of Incorporation if the filed forms satisfy the ROC.