All About Section-8 Company Registration

Introduction:

India is the largest market in the world which has wide range of trade and commercial domain.India has so many sectors to do business at commercial level like provide education, employment, food, health, social welfare etc. for making profits. If any person in India has ideal business structure for doing work on Non-profit organization(NGO) basis can do so by incorporating section-8 company which is established for promoting arts, commerce, education, health, social welfare, research activity, charity, protection of environment etc.Prior it was known as Section-25 company as per companies Act, 1956 now it is widely known as Section-8 company as per companies Act, 2013.

What are the key features of Section-8 company?

• The main object of section 8 companies to promote all of the above-mentioned fields
• No dividend is paid to its members or owner.
• The term No Profit does not mean that company can not earn profits or income. But the company’s profits must be used to promote all the above-mentioned activity and company cannot use this profit for their personal use at all.

Section-8 company is similar to Trust or Society as it is registered under State Government Regulations while Section-8 is registered under Central Government regulated by Ministry of Corporate Affairs. Various advantages are provided to Section-8 company as compared to society or trust. It also has higher credibility amongst donor, government departments and other stakeholders. In the name of the section-8 company cannot use word Limited or Private Limited and must use words like Foundation, Academy, Association, Federation, Chambers, Confederation, Council, Electoral Trust in accordance with Rules as prescribed by Companies (incorporations) Rules, 2014.

What are the minimum requirements to initiate a section-8 company?

1. Minimum 2 shareholders for private limited or 7 for Public Limited.
2. Minimum 2 directors for private limited and 3 for Public limited.
3. No Minimum capital required
4. Directors and shareholders can be same
5. Address proof of applicants like Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement.
6. Pan Card of all applicants
7. Passport size photograph all the directors
8. Address proof where proposed office
9. Specimen Signature.

What is the procedure for Section-8 company registration?

• DSC/ DIN: First and foremost, stepis to apply DSC application and obtain Din (Director Identification Number)by filing DIR-3 for all proposed directors of the company.
• Name Approval: An application for name reservation is apply with Form- RUN (Reserve Unique name) with Central Registration Centre ROC for approval of proposed section 8 company. In this form applicant can give 2 names in order to preference once it is approved is valid for 20 days. Make sure that you have to use words like Charitable, foundation, Forum, Association, Foundation etc.as per above-mentioned said rules.
• Draft of MOA and AOA: After getting name approval the next step is to draft MOA and AOA as it is constitution of the company and internal rules and regulation respectivelythen filed it with ROC with form- INC-12 for the issuance of license under section 8 of the companies Act2013 which is grant by central government ROC with following attachment:
• Statement of income and expenditure
• List of directors of the proposed company
• Subscriber page of MOA and AOA
• INC-15 Declaration by subscribers of the MOA
• INC-13 (Memorandum of Association)
• Article of Association
• Application for incorporation: After obtaining license from Central government the next step is to file SpiceForm for getting Certificate of incorporation to commence its businessand must attach following documents
• Address proof of registered office
• Rent Agreement
• Consent to act as director in form DIR-2
• NOC
• INC-9
• Id proofs and pan card of the applicant.
• Certificate of incorporation: After filing spice form with the department then concerned ROC is satisfied with all the forms, a Certificate of incorporation (COI) is issued by Registrar of company along with (CIN)Corporate Identification Number.