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.
Requirements for Section 8 Company Registration
Following are some vital requirements for Section 8 Company Registration:
1. Directors:
For Section 8 Company Registration in India, a minimum of 2 Directors is required.
2. Capital Requirement:
There is no minimum paid-up capital for the Registration of Section 8 Company. NGOs in India established as a Section 8 company need not use the words Private Limited or Limited in their name.
3. Management
Section 8 Company is managed by the BoD (Board of Directors) as per AoA & MoA of the Company, unlike other Trusts that are handled by the Trustees as per the Trust Deed.
4. Regulation under various Acts:
Section 8 Company needs to follow the Rules & Regulations prescribed under the Companies Act, 2013. It needs to file returns & maintain Books of Account with ROCs. Section 8 Company can’t make any alterations to the provisions of the Memorandum of Association (MoA) & Articles of Association (AoA) without the prior consent of the Central Government and it should follow the provisions of the GST Law & Income Tax Act.
5. Charitable Objects:
In India, Section 8 Companies are registered with non-profit objectives. The AoA & MoA must mention the purpose for which it is set up. Any profits earned by the Section 8 Company is utilized for the furtherance of its main objectives i.e., charitable purposes in the Company. The profits will not be distributed among its members.
6. DSC and DIN:
DSC or Digital Signatures of all the proposed Company’s Directors are necessary for the Registration because the forms for the Registration process are filed online & should be digitally signed. Apart from DSC, you need to apply for DIN for the Directors and the application for allotment of DIN must be filed in Form DIR-3 or along with the SPICe+ Form for the Registration.
Following are some crucial documents required for the Registration of Section 8 Company:
Identity/Address proof of Directors or Shareholders:
- Passport-size photographs of Directors/Shareholders
- Copy of DL or Voter ID
- Copy of latest bank statement & utility bills
- Copy of Aadhar Card
- Copy of Passport (In case of NRI or Foreign National)
Address proof of Registered Office:
- Copy of latest electricity bill water bill or gas bill (not older than 2 months)
- In the case of a rented office, a Rent Agreement is required
- NOC from the property owner
Other Documents:
- MoA & AoA
- Consent of Nominee (INC-3)
- DSC (Digital Signature Certificate)
- Declaration by the 1st Director Subscriber (an affidavit is not required)
- Copy of Incorporation Certificate of an overseas corporate body (if any)
- A Resolution passed by the promoter company
- Declaration of unregistered companies
- Residential & identity proof of subscribers & nominees