About Section 8 company registration
Section 8 company registration refers to the process of registering a non-profit organization or a company under Section 8 of the Companies Act, 2013 in India. This type of company is registered for the promotion of art, science, commerce, education, research, social welfare, religion, charity, or any other similar purpose.
Section 8 companies are registered as non-profit organizations and are exempted from paying income tax on the surplus generated from their activities. However, the surplus must be utilized for the promotion of the company’s objectives and cannot be distributed as dividends to the members.
To register a Section 8 company, the company must obtain a license from the Registrar of Companies (ROC) by submitting the necessary documents and fulfilling the eligibility criteria. The company must have at least two directors and two shareholders, and it must also have a registered office address.
Some of the advantages of registering a Section 8 company include limited liability, tax exemptions, separate legal entity status, credibility and trustworthiness, access to grants and funding, and perpetual succession
There are two types of Section 8 companies in India, based on their scope and operations:
- Charitable Company: A charitable company is a non-profit organization that is established for charitable purposes, such as the promotion of religion, education, art, culture, or social welfare. This type of company must operate for the benefit of the general public, and any profits generated must be used for charitable purposes.
- Non-profit Company: A non-profit company is a Section 8 company that is established for the purpose of promoting commerce, science, art, education, research, or any other similar objective. This type of company can undertake activities that are not for profit and can generate income for its operations. However, any surplus generated must be used for promoting its objectives, rather than being distributed as dividends to its members.
Both types of Section 8 companies are registered as non-profit organizations and are exempted from paying income tax on the surplus generated from their activities. However, the surplus must be utilized for promoting the company’s objectives and cannot be distributed as dividends to the members. The companies must ensure that they operate within the prescribed regulations and guidelines to maintain their status as non-profit organizations.
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Checklist for section 8 company registration:
To be eligible to open a Section 8 company in India, the following criteria must be met:
- Objectives: The company’s objectives must be for promoting commerce, science, art, education, research, social welfare, religion, charity, or any other similar objective. The primary objective of the company must not be to earn profits.
- Non-Distribution of Profits: The profits earned by the company must be utilized for promoting its objectives, and cannot be distributed as dividends to its members.
- Minimum Directors and Shareholders: The company must have at least two directors and two shareholders. The directors and shareholders can be Indian residents or non-residents.
- Registered Office: The company must have a registered office in India, which can be either owned or rented.
- License from ROC: The company must obtain a license from the Registrar of Companies (ROC) to operate as a Section 8 company. The application must be submitted with the necessary documents and fees.
- Memorandum of Association (MOA) and Articles of Association (AOA): The MOA and AOA must clearly state the objectives and activities of the company.
Documents required for section 8 company registration
- Self-attested Pan card
- Self-attested Voter id or Driving license or Passport
- Self-attested Bank statement or electricity/telephone/mobile bill
- Recent passport size photo
For Registered address of company:
If premise is rented/leased
- Copy of Electricity bill of the owner
- Rent or lease agreement
- Noc from owner of property
If premise is Owned
- Copy of Electricity bill of the owner
- Noc from owner of property
Registration Process of Section-8 company registration
- Name Reservation
- Procurement of Digital signatures
- Preparation of Incorporation documents
- Drafting of MOA/AOA
- Filling of Incorporation documents with MCA
- Filling of Registered office
- Filing of commencement of Business after Incorporation
- Issue of Share certificate to shareholders
- Filing of of Initial LLP Deed with MCA
What will you get from Us:
- Two Class 3 Digital Signatures
- 2 Director Identification Numbers
- Company Name Approval
- Certificate of Incorporation
- License to operate
- Company PAN & TAN
- Company PF/ESI number
- Company Shop and Establishment Registration
- Incorporation Kit
- Hard-copy Share Certificates
- Commencement of Business Certificate
- Bank Account opening document
- Document Formats
- First auditor appointment
Additional benefit *
- Bank Account Opening
- Free Domain
- Free Website up-to 5 pages
- Listing on Social media platform
- Listing on Google my Business for nearby business
- Razor pay/Payu money payment gateway for online payment
Top 10 advantages to register as section 8 company in India
The following are the top 10 advantages of registering as a Section 8 company in India:
- Tax Exemptions: Section 8 companies are eligible for various tax exemptions and benefits, such as income tax, capital gains tax, and dividend distribution tax.
- Limited Liability: The liability of the members is limited to their share capital contribution, which provides protection to their personal assets.
- Credibility: Section 8 companies are regulated by the Ministry of Corporate Affairs, which enhances their credibility and trustworthiness in the market.
- Perpetual Succession: Section 8 companies have perpetual succession, which means that the company continues to exist even if the members change.
- No Minimum Capital Requirement: There is no minimum capital requirement for Section 8 companies, which makes it easier for entrepreneurs to start such companies.
- Easy Transfer of Ownership: The ownership of a Section 8 company can be easily transferred by selling or transferring shares to other members or investors.
- Access to Grants and Donations: Section 8 companies can easily access grants and donations from various sources, such as the government, NGOs, and charitable organizations.
- Corporate Social Responsibility (CSR): Section 8 companies are required to spend a certain percentage of their profits on CSR activities, which can enhance their social impact and goodwill.
- Separate Legal Entity: Section 8 companies have a separate legal entity from their members, which means that the company can sue or be sued in its own name.
- Flexibility in Management: Section 8 companies have greater flexibility in management, as they can appoint professional managers or directors to run the company, in addition to the members.