A BRIEF INTRODUCTION ABOUT SECTION 8 COMPANIES:
In India there are three formats for registration of Non-Profits Organizations, those are mentioned here under:
(a) Section 8 Companies;
Out of the above mentioned three formats, Section 8 Companies are most reliable, credible and popular format of registration of Non-Profits Organizations in India.
Section 8 company is company-
1. whose objectives is to promote arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection or other similar objectives.
2. These companies apply their profits towards the furtherance of their objects and
3. These companies do not pay any dividend to their members.
These Companies are required to obtain License from the Central Government and the Central Government may issue licence on such conditions as it deems fit and allow that person or association of persons to be registered as a limited company under this section
These companies are not required to add with its name the word "Limited", or "Private Limited"
ADVANTAGE OF REGISTRATION OF SECTION 8 COMPANY:
1. SEPARATE LEGAL ENTITY:
Section 8 Companies have a separate legal entity and is different from its members. The Section 8 Company has perpetual existence.
2. NO MINIMUM CAPITAL REQUIREMENTS:
No minimum capital requirements has been specified for Section 8 companies in the Companies Act, 2013. Section 8 companies can alter its capital structure later on as per its requirements.
3. NO REQUIREMENT TO ADD LIMITED OR PRIVATE LIMITED WORD WITH ITS NAME:
Section 8 Companies are registered with limited liability, However it need not to add “Limited or Private Limited” word with its name.
4. TAX BENEFITS:
Section 8 Companies enjoy many tax benefits.
Section 8 Companies are more reliable and credible than other forms of NGO such as Trust and Society.
6. TAX EXEMPTION TO THE DONORS:
Those person who donates to Section 8 Companies are eligible to exemptions U/s 12A and 80G of the Income Tax Act, 1961
PROCEDURE FOR REGISTRATION OF SECTION 8 COMPANIES
1. Filing of Application for Reservation of Name of Section 8 Company:
An application for reservation of name of Section 8 Company shall be made in RUN Form by paying Govt. Fee of Rs. 1000/-. Two Names may be applied in RUN Form, If the names applied is unique one and are not Identical/Similar with an existing Company/LLP/Registered Trademark then MCA shall reserve the same for 20 days otherwise the RUN form filed shall be sent for re-submission and we can apply two new name by re-submitting the RUN form in above mentioned Govt. Fee of Rs 1000/- which has already been paid by us.
The names of Section 8 Company shall include the words such as “Foundation, Federation, Forum, Chambers, Confederation, Council, Electoral Trust” etc.
2. Obtaining Digital Signature Certificates (DSC) of all the Subscribers and First Directors:
After the approval of name of proposed Section 8 Company, the next step is to obtain DSC of all the subscribers and First Directors.
3. Preparation of Registration/Incorporation Documents:
On the basis of KYC documents and various information received from proposed subscribers/drectors of the proposed Section 8 Company, incorporation documents are prepared for registration and Obtaining license for Section 8 Company.
4. Filing of Various E-Forms for Incorporation of Section 8 Company:
The E-forms mentioned here under are filed with MCA for registration and Obtaining License under Section 8 of the Companies Act, 2013.
(A) SPICe form 32: The Following details and information in SPICe Form 32 Shall be filled:
Approved Name of proposed Section 8 Company;
Full Address of registered office or correspondence address;
E-mail ID, Telephone Number, Fax Number, if any of the proposed Company;
Authorized and Subscribed Capital of the Company;
Basic details of Subscribers and First Directors such as their Name, Father`s Name, Date of Birth, Pan Card Number/ Aadhar Card Number/DL/Passport Number, Nationality, Occupation, Place of Birth, Residential Status, E-mail ID, Telephone Number, Present Address, Permanent Address, Duration of Stay at present address, Number of Shares Subscribed by the subscribers and designation and category of First Directors.
Information specific to PAN such as Area Code, AO Type, Range Code, AO Number. etc for allotment of Pan Card Number of the Company;
Information specific to TAN such as Area Code, AO Type, Range Code, AO Number. etc for allotment of TAN of the Company;
Source of Income of the Company viz. Income from Business and Profession, Capital Gain, Income from House Property etc;
Declaration from Practicing Professional certifying the form that all the requirements of the Companies Act, 2013 and rules made there under regarding incorporation have been complied with.
Attachments of SPICe Form 32: Following documents shall attached in SPICe form 32:
DIR-2 duly signed by all First Directors
Copy of Pan Card of all First Directors and Subscribers;
Copy of ID Proof (viz. Aadhar Card/DL/Passport/Voter ID, any one) of all First Directors and Subscribers;
Copy of Address Proof (viz. Bank Statement/Electricity Bill/Telephone Bill/Mobile Bill) of all First Directors and Subscribers;
Proof of registered Office such as Lease Deed/ Rent Agreement/Registry etc.
Latest Utility Bill of the premises where registered office of the company is to be situated such as Electricity Bill/Water Bill/Gas Bill etc.
NOC from the owner, in whose name the premises of the registered office is registered;
Declaration in Form No INC-14 by an Advocate, CS/CA/CMA in practice, that the MOA & AOA have been drawn up in conformity with the provisions of section 8 and rules made thereunder and that all the requirements of the Act and the rules made thereunder relating to registration of the company under section 8 and matters incidental or supplemental thereto have been complied with;
Declaration by each of the persons making the application in Form No. INC-15;
An estimate of the future annual income and expenditure of the company for next three years, specifying the sources of the income and the objects of the expenditure;
Declaration regarding assets and liabilities of the proposed company;
List of Promoters, First Directors and Key Managerial Personnel;
Statement of the grounds on which application is made.
(B) E- Forms INC-9:
Declaration by First Directors and subscribers is filed by this form. No document is attached in this form. This form is filed only after affixing DSC of first directors/Subscribers.
(C) E-Form INC-35 AGILEPRO:
Application for registration under Goods and Service Act, 2016 (GST), PF Registration, ESI Registration and Opening of Bank Account is made through this form.
Attachments of E-Form INC-35 AGILE: Following documents are attached in this form:
Proof of Identity of Authorized Signatory for opening Bank Account;
Proof of Address of Authorized Signatory for opening Bank Account;
Specimen Signature of Authorized Signatory for EPFO;
Passport size photos of all first directors.
FREQUENTLY ASKED QUESTIONS
1. Can a single Individual form a Section 8 company?
Answer: No, at least two subscribers and directors are required to incorporate a Section 8 company.
2. Can body corporate or company become member in a Section 8 company?
Answer: Yes, body corporate or company can become a member in a Section 8 company.
3. Which kinds of words shall be form part of section 8 company`s name?
Answer: The name of section 8 company shall include the words such as “Federation, Chambers, Foundation, Forum, Association, Confederation, Council” etc
4. Can section 8 company pay dividend to its members?
Answer: No dividend can be paid by Section 8 Company to any of its member.
5. What is the minimum capital requirement for registration of Section 8 Company?
Answer: No minimum capital requirements has been specified for Section 8 companies in the Companies Act, 2013. Section 8 companies can alter its capital structure later on as per its requirements.
6. Can One Person Company (OPC) be incorporated as Section 8 Company?
Answer: No, One Person Company (OPC) cannot be incorporated as Section 8 Company.
7. Can Partnership Firm or LLP become member of Section 8 Company?
Answer: Yes, Partnership Firm or LLP can become member of Section 8 Company.