What is Section 8 of Companies Act, 2013 – Definition, Features
Section 8 of Companies Act, 2013 deals with the incorporation of Non-profit Organisations in India. The companies Act 2013 is a comprehensive legislation prepared by the honourable Parliament of India, replacing the old Companies Act of 1956. The Companies Act, 2013 contains a detailed account of incorporation of various types of companies such as Private Limited, Public Limited, Non-Profit Organisation, LLP, OPC etc. The Section 8 of Companies Act, 2013 contains all the provisions and procedure of incorporation of Non-Profit companies such as NGOs, trusts and societies.
Table of Content
- What is Section 8 of Companies Act, 2013
- Nature of business of a Section 8 company
- Characteristics of Section 8 company
- Documents Required for Section 8 company
- Registration Fees
- Time required for Section 8 company
- Conclusion
- Related Articles
- FAQs
What is Section 8 of Companies Act, 2013
Section 8 of Companies Act, 2013 deals solely with the Registration and incorporation of Non-profit Organizations or NGOs, trusts and societies on the central level. You can read in detail about Section 8 of Companies Act,2013 from the official section 8 of companies Act, 2013 PDF issued by the Ministry of Corporate Affairs. You can register a section 8 company under the Ministry of Corporate Affairs to set up a Non-profit organisation.
Companies that are incorporated under Section 8 of Companies Act, 2013
The companies that are incorporated under section 8 of the Companies Act, 2013 are majorly Non-profit organisations whose sole objective is to do the welfare of people at large. They are not supposed to generate profits through any sort of transaction.
Section 8 companies are incorporated for spreading awareness about various issues and promoting welfare and areas like sports, education, science, art, research, Technology, Literature, Awards etc. The founders and shareholders of section 8 company cannot share profits and dividends among its members and shareholders.
Characteristics of Section 8 Company
Promote Social Welfare
A Section 8 company is incorporated under MCA for the purpose of promoting welfare of others and promoting sectors like education, agriculture, art and culture, technology, science, entrepreneurship, research, social welfare, charity, religious programs, etc. Their sole objective is to work for the welfare of society and not to earn profits or share profits and dividends among their members.
No Minimum Capital requirement
A section 8 company does not have any minimum paid-up share capital requirement as compared to other types of companies.
Licensed by Govt of India
A section 8 company is incorporated under section 8 of Companies Act, 2013 which is governed by the Ministry of Corporate Affairs. These companies are meant for the welfare of others in the society.
Limited Liability
The members of a Section 8 company have limited liability up to their subscribed capital and share, which means their personal assets will not be used to pay off the losses in the company.
Dividend Distribution
There is a prohibition on the sharing of dividend and profits among the members or shareholders of the company in a Section 8 company.
Usage of Suffix
A Section 8 Company cannot use private limited or limited company in its name, it can only use suffix like foundation, federation, council, organisation, confederation.
Documents requirement for a section 8 company registration
As per the Companies Act, 2013, the companies need to provide legit proof of identity and address proof as part of the registration process.
Identity and Address proof of directors
- Adhar Card
- Driving License
- PAN Card / DIN( Directors Identification Number)
- Email address and Mobile Number
- Utility bills ( such as electricity bill, broadband bills etc)
- Latest Bank statements ( not older than 2 months)
Address proof of Registered Office
- Latest utility bill (Electricity/broadband/ mobile bill )
- Rent agreement
- Obtain No objection certificate( NOC) from the land owner
Section 8 Company Registration Fees
The total fees for section 8 company registration as an NGO starts from Rs 4,999 including Govt and professional charges and it takes around 7-10 working days to get your NGO incorporated.
Time required for section 8 company registration process
Usually, it takes around 7-10 working days to register a section 8 company under Companies Act, 2013. The time required is due to the documents being verified and processed by the Ministry of Corporate Affairs( MCA).
Section 8 Company Registration Fees and Time Required
To register a Section 8 company, an individual needs to pay the required Govt Fee, as well as some professional fee which you need to pay to the lawyer or the professional you are hiring to get your Section 8 Company incorporated. At professional Utilities you can get your Section 8 Company incorporated at a very less fee starting at just Rs 4,999 and it can be incorporated within 7-10 working days.
Conclusion
In conclusion, we would like to mention that a section 8 company can be incorporated as an NGO or a Non-profit organisation whose sole objective will be the welfare of people and to spread awareness about various social causes in the society. A section 8 company is neither registered to make profits, nor it can share dividends with its shareholders and directors of the company.
If you are planning to get your Section 8 company incorporated, you can reach out to our team at Professional utilities and we will help you do the company incorporation with a seamless process.
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FAQs on Section 8 Company
Q1. What is Section 8 of Companies Act, 2013?
The Section 8 of Companies Act, 2013 deals with incorporation of the Non-profit organisations such as NGOs, Trust, Societies etc. The sole ownership of a section 8 company is to work for the welfare of others.
Q2. What companies come under section 8 of Companies Act, 2013?
The companies that are considered under section 8 of Companies Act, 2013, works majorly for the welfare of others and promotion of industries like education, sports, technology, science, art and culture etc.
Q3.Can a section 8 company registered under Companies Act, 2013 share dividends and profits among its members?
No, the members of a section 8 company are restricted to share profits and dividends among its members and shareholders. The sole objective of such companies is to promote the welfare of others.
Q4.What is the time taken to register Section 8 company under Companies Act, 2013?
The usual days taken to register a section 8 company under Companies Act, 2013 is around 7-10 working days, subject to the approval and document verification by the Ministry of Corporate Affairs.
