Section-8 Company / NGO Registration
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Online Section-8 Company Registration in India Starting at just Rs. 8,999/-
Popularly known as Section 8 company is a company registered with charitable objects such as the promotion of Arts, commerce, science, education, sports, protection of the environment, religion, charity, etc. By promoting it as a not-for-profit organization, the Act does not bar the company from profit creation but rather prohibits distributing profit among members. This says that all the income or profit from any activity of the company must be utilized towards charitable purpose for which it is registered.
The charitable company is registered under Section 8 of the Companies Act, 2013, which provides it special status due to its objects. Compared to other types of companies, Section 8 company enjoys various exemptions and relaxations.
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Incorporated for social welfare
A Section 8 company is incorporated for charity, social welfare and social promotion. Their main aim is to promote social welfare and work for society instead of earning profits. Their main objects depict the reasons for their incorporation. The objects could include Sports, Promote commerce, art, science, education, research, social welfare, religion, charity, protection of the environment, or any such other object.
No minimum capital
As compared to other companies, section 8 companies don’t require any prescribed minimum paid-up share capital. It can be incorporated with zero authorised/ paid up capital
Licensed by government
These types of companies are licensed by the central government under section 8 of The Companies Act 2013 and these companies work for society and receive a donation from other general public for the welfare work.
Limited liability
Section 8 Company also forms as a private limited or public limited company having limited liability. Members of this company have limited liability as per their share subscribed. Accordingly, their personal assets cannot be used to pay off any debts on which the company has defaulted.
No dividend distribution
According to the Companies Act 2013, A Section 8 company cannot distribute any dividends to its members. The profits can only be used in promoting their business objectives.
Stamp duty Relaxation
Some states such as Punjab, Gujarat, Delhi, West Bengal etc. are giving registration of Section 8 company with Zero Stamp Duty, however there are other states giving relaxation in stamp duty.
No suffix
Section 8 companies may not use suffixes like the private limited company or limited company.
Tax Benefits
Section 8 company is eligible for getting tax benefits. They can get registered under section 80G and 12AA of IT act thereby allowing them to provide tax exemptions to any donors.
Documents Required for Section-8 Company
- Digital Signatures of all Directors and Subscribers
- DIN No. for all Directors (If already allotted, otherwise it can be allotted later on)
- Identity Proofs for all the Directors and Subscribers (PAN Card)
- Address Proof of all the Directors and Subscribers (e.g. Aadhaar, Bank Statement)
- Photograph of all the Directors and Subscribers
- Any Utility Bill as Address Proof of Registered office of the company
- If Registered Office is Rented, No Objection Certificate/ Rent Deed from the owner of the Property
- Other documents as prepared by the Professional
Step 1: Consent of Directors and Members
Get consent of all the subscribers to become member and Director of the company who are willing to incorporate the company. The person who are becoming the Director of the company (if Individual) shall be Member of the company.
Step 2: Check the name Availability
Name of a Nidhi Company shall end with “Nidhi Limited’. For e.g. ABC Nidhi Limited. Check the name Availability for the proposed company. Rule 8 and 8A of The Companies (Incorporation) Rules, 2014 shall be abided while checking the name of the company. You will need professional expertise to check the name as there are several complexities while doing the same.
Step 3: Apply for DSC
The Digital Signature Certificates (DSC) of all the subscribers and Directors of the proposed Company shall be applied and necessary verification should be done by the applicant.
Step 4: Preparation of MOA and AOA
MOA and AOA of Section 8 Company should be prepared in physical copy with MOA having objects such as promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment etc. and shall mention that company will not distribute dividend to its members.
Completion of Documentation:
Documents including INC 14, INC 15, MOA, AOA, estimate of the future annual income and expenditure of the company for next three years, etc. need to be prepared which will be filed with the Registrar of Company.
Step 5: Filing for Forms
Incorporation Form SPICe PLUS, will be filed with Ministry of Corporate Affairs along with all the attachments.
Step 6: Final Approval
When Ministry finds that all the documents are correct and complete in all respect, they will issue License in Form INC 16, Certificate of Incorporation, PAN, TAN etc. Ministry will also allot DIN on incorporation if the Directors do not have DIN already.
Step 7: Other Registration
On getting Approval from Ministry, Section 8 company becomes eligible for registrations such as Section 11, 12 and 80 G of Income Tax Act, 1961, Niti Aayog etc.
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1. What are the minimum requirements to register a charitable company in India?
To register such company, the promoters have to ensure the following:
1) The main object of the company must be to operate for a charitable purpose and among those prescribed in law
2) Minimum 2 members of the company, who shall subscribe to capital on incorporations
3) Minimum 2 directors in the company, one of which must be Indian citizen and resident
4) The registered office of the company must be situated in India
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2. What is the minimum capital required?
There is no minimum amount of capital prescribed for the charitable company. The promoters may introduce the amount sufficient to start and run business. -
3. How to reserve the name of company?
The name of the company should be formulated as per the naming guidelines. The application for reservation of name is made in web-form called “RUN” with a maximum of 2 unique names. The registrar may ask to re-submit the application with a different name if the names do not fulfill the requirements. -
4. How to obtain approval of Central Government for non-profit company registration?
The promoters shall apply in e-form INC-12 for said approval from Central Government. The form is accompanied with MoA – AoA of the company, declarations from promoters, estimated statement of income & expenditure for next three years, etc. If the application is approved, the approval letter is issued in form INC-16. -
5. Whether physical presence of the promoters is required while registration?
No. The registration process is completely online, the physical presence of the promoters is not required. All the documents and details can be transmitted through the mail or uploaded on our portal. -
6. Can NRIs/Foreign Nationals be a Director in a Section 8 company?
Yes, an NRI or Foreign National can be a Director in a Section 8 Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be an Indian citizen and a resident. -
7. Whether Section 8 company and NGO registrations are same?
The Section 8 company is popularly known as NGO. However, NGOs can be registered as other business structure like trust, society, etc. -
8. Can section 8 or Charitable company declare dividends?
A Section 8 or Charitable Company shall not pay any dividend to its members, but apply the surplus of receipts over payments for the promotion of its objectives. -
9. What is the validity of the registration of Section 8 company?
Once the company is incorporated, it is in existence and active as long as the annual compliances are met with regularly or it is wound-up voluntarily.
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