An association, desirous of being incorporated as accompany with limited liability without the addition to its name of the word “limited or the words “Private limited” are regulated by section-8 of the Companies act, 2013.
A section-8 Company is an organization which registered as a non-profit organization. NPO has the its objective of promotion of arts, commerce, charity, education, protection of environment, science, social welfare, sports, research, religion and intends to apply its profits, if any or other income in promoting its objects. It works like a limited company the only difference is it cannot use the words ‘section-8” or “limited” in its name. The income of these companies must be used to promote only charitable objects and cannot pay any dividend to the members of the company.
WHY TO GET REGISTERED?
- Separate legal entity
- Easy management
- Uninterrupted existence
- Owning property in its own name
- Better creditability
- Tax benefits
- Application for registration
- Applying and obtaining DSCs and DINs
- Name and approval
- Get the incorporation certification within 5-7 days
INCLUSION (WHAT IS INCLUDED IN THE SERVICE?)
- DIN for partners
- Digital signature for partners
- Accurate name search
- Approval of name
- Memorandum of association/ article of association
- Registration fees
- Company PAN/TAN
- Tax exemption, especially to the donors
- No minimum capital requirement
- No stamp duty payable
- Separate legal entity which leads to limited liability
- As it is licensed by central government it is more credible than any other non-profit organization
- The profit of the company could only be used for promoting charitable objects
- Do not intend to dividend to its members
- Such company cannot amend MOA without prior approval from the central government
FREQUENTLY ASKED QUIESTIONS
- What are the main attachments of form INC.12 ?
-the following should be in INC.12;
- The draft MOA of the proposed company
- The draft AOA of the proposed company
- The declaration by an C.A, C.S or advocate in practice
- The declaration by each of the persons making the application
- Is it necessary to have 2 directors for section-8 company?
-yes, at least 2 directors are required for a section-8 company
- Do I need to present physically for the incorporation of section-8 Company?
-no, as the whole process is online you don’t need to be present there
- How much time is required for forming a section-8 company?
– it will take around 20 days to form a section-8 company
- Is it necessary to have a charitable object to register a section-8 company?
– Yes, it is necessary to have a non-profit motive to incorporate a section-8 company.
- ID proof of members (aadhar card,passport,voter ID)
- Passport size photographs
- Address proof (electricity bill, water bill, telephone bill)
- Pan card of each partner
- Bank statement of each partner