Section 8 Company
KEY FEATURES OF SECTION 8 COMPANY
HOW IT IS GOVERNED
It's governed by Indian Companies Act, 2013.
COMES UNDER WHOSE JURISDICTION
Regional Director & Registrar of Companies of concerned state.
WHAT IS MAIN DOCUMENT REQUIRED
MOA & AOA
WHETHER STAMP DUTY IS CHARGED
No Stamp Duty Required
MINIMUM MEMBERS REQUIRED
2
MANAGED BY WHOM
Board of Directors
LEGAL TITLE HELD BY WHOM
Properties held in the name of Society
WHAT IF IT BECOMES INEFFECTIVE/DISSOLVED
On Dissolution, funds, and property not transferred to members of Co. but to some other similar section 8 Co.
DOES ANNUAL RETURN NEED TO BE FILED
Required to be filed with ROC
ONLINE FILING FACILITY AVAILABLE?
Available
LEVEL OF DIFFICULTY OF COMPLIANCE AND TIME INVOLVED?
Easy, Time saving and transparent procedure
TIME TAKEN FOR REGISTRATION?
20-30 working days
COST INVOLVED
High
CAN 12A AND 80G BE TAKEN?
Yes
WHETHER PREFERRED FOR GOVT. SUBSIDY/GRANT?
High preference
WHETHER PREFERRED FOR FCRA REGN?
High preference
TRANSPARENCY IN WORK
Very High because everything is online
DIFFICULTY IN CHANGING TRUSTEES OR BOARD
Easy
DIFFICULTY IN CHANGING REGISTERED OFFICE
Easy
CAN IT BE DISSOLVED
Can be dissolved
ABOUT SECTION 8 COMPANY
Section 8 Company is a Company licensed under Section 8 of the Companies Act, 2013 (the Act, erstwhile known as Section 25 Company under the Companies Act, 1956, which has main object;
- For promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object,
- provided the profits, if any, or other income is applied for promoting only the objects of the company and
- No dividend is paid to its members.
- Therefore, Section 8 Company is a company registered for charitable or not-for-profit purposes.
Section 8 Company has various advantages when compared to Trust or Society. Section 8 company also has higher credibility amongst donors, Government departments and other stakeholders.
Further, the key feature of a Section 8 Company is that name of the Company can be incorporated without using the word “Limited” or “Private Limited” as the case may be.
(Note: Requirement of minimum capital under the Act shall not apply to Section 8 Company vide Notification of June 5, 2015).
PROCEDURE FOR REGISTRATION OF SECTION 8 COMPANY
- Minimum two people required for registration of Section 8 Company.
- Obtaining Digital Signature Certificate (DSC) for proposed Directors not having Directors Identification Number (DIN)
- Obtaining DIN from Ministry of Corporate Affairs by filing Form DIR-3, if not having DIN.
- Filing of Form INC-1 for Reservation of Name.
- Post approval of name from the concerned Registrar of Companies, file Form INC-12 [pursuant to Section 8 (1) of the Act and Rule 19 of Company (Incorporation) Rules, 2014] (the Rules)
PROCEDURE FOR REGISTRATION OF SECTION 8 COMPANY
- Draft Memorandum of Association of the proposed company in Form INC-13
- Draft Articles of Association of the proposed company
- Declaration by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant in Form INC-14
- Declaration from each person making application in Form INC-15
- Estimated Income and Expenditure for next 3 years.
- Note: Form INC-12 is in physical mode and the e-form is not yet available on MCA21 Portal. Thus, the same needs to be filed in Form RD-1 with prescribed fees.
ATTACHMENTS TO FORM RD-1
- Form INC-12
- Draft Memorandum of Association of the proposed company in Form INC-13
- Draft Articles of Association of the proposed company
- Declaration by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant in Form INC-14
- Declaration from each person making application in Form INC-15
- Estimated Income and Expenditure for next 3 years
- The Central Government after examining grants the license in Form INC-16
- After obtaining the license, following forms need to be submitted with prescribed attachments
- Form INC-7
- Form INC-22
- Form DIR-12
- Post Scrutiny of the submitted forms and documents the Corporate Identification Number (CIN) will be issued by the concerned Registrar of Companies.
LIST OF DOCUMENTS REQUIRED
Identity Proof
Copy of Permanent Account Number (PAN) of all Directors/Promoters (Mandatory)
Address Proof
Copy of valid Passport / Driving Licence / Aadhar / Telephone Bill / Electricity Bill (not older than 2 months)
Photographs
Latest passport size photographs of all Directors/Promoters
Registered Office Proof
Rent Agreement or Leave & Licence Agreement, if registered office premises is taken on rent
Utility Bill
Utility Bill of proposed registered office
Director Consent
Consent to act as Director in Form DIR-2
Directorship Details
Directors' directorship details in other Companies/LLPs, if any.