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Section 8 Company is a type of NGO that works for non-profit and charitable purposes. The income and profit earned from the company is used to promote the objectives of the company and not to be distributed as dividends to its shareholders. It is registered under Companies Act, 2013.

What is Section 8 Company?

Section 8 company is an upgraded form of Society and Trust. It has many benefits over traditional forms of charitable institution registration. Section 8 company is the most popular form of NGO registration in India. It is easy to register, run and manage.

The main purpose of Section 8 company is to promote non-profit objectives such as commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment and other charitable purposes.

Benefits of Section 8 Company

  1. Eligible for grant and donations: The company becomes eligible for various grants offered by the Government of India. Further, Section 8 Companies are also entitled to receive donations from the general public.
  2. Exemption to the donators: Those donating to a Section 8 Company are eligible for tax exemptions under 80G of the Income Tax Act.
  3. Tax Benefits: There are many tax benefits for Section 8 companies in India.
  4. Separate Legal Entity: The identity of the Section 8 Company and its directors are separate which means the entity will continue to survive, even if all the directors of the company become incompetent to carry on the business.
  5. No Minimum Capital: There is no requirement of minimum paid-up capital for the incorporation of Section 8 Company.
  6. Credibility: Section 8 Company creates their own credibility in the market by holding the License issued by the ROC and the various kinds of activity undertaken by them.
  7. Section 8 License: The Registrar of Companies provides License to Section 8 Companies in Form INC-16.

Minimum requirements for Section 8 Company

  1. Minimum 2 directors are required if Section 8 company is incorporated as a private limited company and minimum 3 directors in case of incorporation as a public limited company
  2. At least one director should be the resident of India
  3. Registered office address
  4. The objective of the company should be for charitable or social purpose only
  5. The profit cannot be shared among shareholders

Procedure of Section 8 Company registration

  Step 1. Application for Digital Signature Certificate (DSC)

Section 8 Company incorporation is a complete digital process and therefore requirement of Digital Signature Certificate is a mandatory criteria. Directors as well as subscribers to the memorandum of the company need to apply for a DSC from the certified agencies. Obtaining a DSC is a complete online process and it can be done within 24 hours. This process involves 3 simple verifications that are document verification, video verification and phone verification.

  Step 2. Application for the Name Availability

  Step 3. Application for Section 8 License

For obtaining the license under Section 8 Company, Form INC-12 is required to be filed with the Registrar of Companies. Prior to issuance of Certificate of Incorporation for Section 8 company, approval letter under Section 8 of Part 1 i.e, License under Section(1) of the Companies Act, 2013 is issued from the Ministry of Corporate Affairs. Once the form is approved by the Central Government, ROC will issue a 6-digit Section 8 license number.

  Step 4. Filing of SPICe Form (INC-32)

Post name approval, details with respect to registration of the company has to be drafted in the SPICe+ form. It is a simplified proforma for incorporating a company electronically. The details in the form are as follows:

  1. Structure of the company
  2. Industrial Activity Code and main division
  3. Details of members and subscribers
  4. Address of the company
  5. Particulars for the payment of stamp duty
  6. Attachments for the details mentioned above
  7. Share capital of the company
  8. Application for DIN
  9. Application for PAN and TAN
  10. Declaration by directors and subscribers
  11. Declaration & Certification by professional

  Step 5. Filing of e-MoA (INC-33) and e-AoA (INC-34)

  Step 6. Application for PAN and TAN of the company

Procedure of Private Limited Company Registration