Section 8 Company Registration
Register your Section 8 Company today and channel your passion into purpose-driven initiatives that leave a lasting impact.
Introduction
Section 8 Company, as per the Companies Act, 2013, is a legal entity formed for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other such object. These companies are formed with the objective of promoting social welfare or charitable activities and are exempt from using the suffix "Limited" or "Private Limited" in their name. Section 8 Companies operate as non-profit organizations and reinvest their surplus income into achieving their objectives rather than distributing dividends to shareholders.
Eligibility and Requirements
To register a Section 8 Company in India, certain eligibility criteria must be met:
01
Charitable Objectives: The primary objective of the company must be to promote charity, education, science, art, social welfare, religion, environment protection, or any other similar objective.
02
Non-profit Motive: The company must intend to apply its profits, if any, or other income towards promoting its objectives and not distribute any dividend to its members.
03
Minimum Directors and Members: A Section 8 Company must have a minimum of two directors and two members (individuals) in the case of a private company, and a minimum of seven directors and seven members in the case of a public company.
04
Registered Office: The company must have a registered office address in India.
Steps for Registration:
Digital Signature Certificate (DSC)
Obtain DSC for the proposed directors and subscribers of the company.
Director Identification Number (DIN)
Apply for DIN for the proposed directors of the company.
Name Approval
Apply for name availability through the RUN (Reserve Unique Name) service on the MCA (Ministry of Corporate Affairs) portal. Ensure the chosen name complies with Section 8 Company naming guidelines.
Incorporation Documents
Prepare and file incorporation documents, including the Memorandum of Association (MoA) and Articles of Association (AoA), with the Registrar of Companies (RoC).
RoC Approval
Upon verification of the documents, the RoC will issue a Certificate of Incorporation, and the company will be officially registered as a Section 8 Company.
Apply for Tax Exemption
After incorporation, the company must apply for tax exemption under Section 12A of the Income Tax Act, 1961, to avail of tax benefits available to charitable organizations.
Advantages of a Producer Company
01
Tax Benefits: Section 8 Companies enjoy various tax benefits, including exemption from income tax on surplus income applied towards charitable activities.
02
Limited Liability: Members of Section 8 Companies have limited liability, restricting their liability to the amount of their unpaid subscription.
03
Credibility: Registration as a Section 8 Company enhances the credibility and trustworthiness of the organization, making it easier to attract donations and grants.
04
Continuity: Section 8 Companies have perpetual succession, ensuring continuity of operations irrespective of changes in membership or management.
Post-Incorporation Obligations
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Compliance with Companies Act: Ensure compliance with the provisions of the Companies Act, 2013, and other applicable regulations for Section 8 Companies.
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Annual Compliance: File annual returns and financial statements with the RoC and comply with statutory requirements for companies.
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Utilization of Funds: Utilize the funds received for charitable purposes and maintain proper records of expenditure to demonstrate compliance with regulatory requirements.
While Section 8 Company registration offers several advantages, it also comes with certain restrictions and regulatory obligations. It is essential for Section 8 Companies to adhere to the objectives specified in their MoA and AoA and utilize their resources effectively towards achieving their charitable goals.