In India, a Section 8 Company functions as an NGO dedicated to advancing various fields such as art, science, education, sports, and charitable activities. Unlike Trusts or Societies, profits generated by Section 8 Companies are reinvested to support their stated objectives rather than being distributed to company members. The registration process for a Section 8 Company falls under the jurisdiction of the Ministry of Corporate Affairs (MCA), distinguishing it from Trusts and Societies, which are governed by State Government Registrars.
Opting for Section 8 Company registration through RegisterKaro offers distinct advantages over Trusts and Societies. The Section 8 structure enhances credibility with government departments, stakeholders, and potential donors. At RegisterKaro, our proficient team ensures a seamless registration process for your Section 8 Company. With expertise in documentation, application filing, and efficient incorporation, we alleviate your concerns, making the entire process smooth and effective.
Important Points Regarding Section 8 Company in India
Following are some vital points about Section 8 Company in India:
- NGOs in India can be registered under the Registrar of Societies or as a Non-Profit entity under Section 8 Company of the Companies Act, 2013
- Compliance with the Companies Act is compulsory for Section 8 Company, including Filing returns with the ROCs, maintaining books of accounts, & complying with GST and IT Act Regulations
- Section 8 Company in India cannot utilize profits for purposes other than charitable objectives & cannot distribute them among shareholders of the Company
- Any alterations to the Charter Documents like AoA & MOA require consent from the Government
- Section 8 Companies are identical to the former Section 25 Companies Under the Companies Act 1956 and now, they are recognized as such under the prevailing legislation
Advantages of Section 8 Company Registration in India
1. Separate Legal Entity:
These types of companies in India are considered separate legal entities, which means that they can own property, sue or be sued in their name, and enter into contracts.
2. More Trustworthy & Credibility:
Due to its non-profit nature, Section 8 Companies are often viewed as more credible & trustworthy than other types of Companies.
3. Nil Stamp Duty:
These Companies are exempted from paying stamp duty on their Registration Documents.
4. Minimum Share Capital:
These companies don’t have any minimum capital requirements.
5. No Minimum Capital is Required:
In India, Section 8 Companies do not have a minimum capital requirement and they can adjust their capital structure as per their growth and give them more flexibility.
6. Exemption to Donors:
Tax exemption is only allowed for the donations received by the Section 8 Company under Section 12A & 80G of the Income Tax Act.
Procedure for Section 8 Company Registration
Step 1: Obtain DSC & DIN:
First, the applicant needs to obtain a Digital Signature Certificate of the proposed Directors. Once they receive DSC, file Form DIR-3 with ROC for obtaining DIN. The identity & address proof should be attached for getting DSC. Once DIR-3 is approved, the Registrar of Companies will allot a DIN to the proposed Directors.
Step 2: Filing of INC-12 Application Form:
After getting DSC and DIN, the next step is to file Form INC-12 with the Registrar of Companies to apply for a Licence under Section 8 Company along with the attachment of the required documents. Once the form is approved, a Licence under Section 8 Company will be issued in Form INC-16.
Step 3: Filing of SPICe+ Form:
After getting a License under Section 8, you need to file an SPICe+ Form with the Registrar of Companies (ROC) for the Registration along with the vital documents.
Note: Once the Registrar of Companies is satisfied with the forms submitted, he or she issues a CoI (Certificate of Incorporation) along with a Unique CIN.