About Section 8 Company Registration in India
Section 8 registration in India refers to the process of incorporating a company under Section 8 of the Companies Act, 2013. This section pertains to the formation of non-profit organizations (NPOs) or companies with charitable objectives, such as promoting education, science, sports, social welfare, religion, charity, and environmental protection. Companies formed under Section 8 enjoy certain privileges, including tax exemptions and limited liability, while they operate primarily for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any such other object, provided the profits, if any, or other income is applied for promoting only the objects of the company.
The registration process for a Section 8 company in India involves several steps to ensure compliance with the Companies Act, 2013. Here’s an overview of the process:
- Name Reservation: The first step is to select a unique name for the company and check its availability with the Ministry of Corporate Affairs (MCA). The name should reflect the objectives of the company and must not infringe on any existing trademarks.
- Memorandum and Articles of Association: Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) outlining the objectives and rules governing the company’s operations. These documents must comply with the requirements specified under the Companies Act.
- Digital Signature Certificate (DSC) and Director Identification Number (DIN): Obtain DSCs for the proposed directors and apply for DINs, which serve as unique identification numbers for directors, from the MCA.
- Application for Incorporation: Submit the application for incorporation along with the required documents, including MOA, AOA, and other supporting documents such as address proof, identity proof of directors, and a declaration by professionals certifying compliance with Section 8 requirements.
- Approval from Registrar of Companies (ROC): The ROC reviews the application and documents submitted. If everything is in order, the ROC issues a Certificate of Incorporation, confirming the formation of the Section 8 company.
- PAN and TAN Application: After receiving the Certificate of Incorporation, apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department.
- Commencement of Operations: Once the Section 8 company is incorporated, it can commence its operations towards achieving its charitable objectives.
Attributes for the NGO Registration in India
Registering a non-governmental organization (NGO) in India involves fulfilling specific attributes and adhering to regulatory requirements set forth by the government. Here are key attributes necessary for NGO registration:
- Mission and Objectives: Clearly define the mission and objectives of the NGO, focusing on areas such as education, healthcare, poverty alleviation, environmental conservation, or social welfare. The objectives should be aligned with the needs of the community the NGO aims to serve.
- Legal Structure: Choose an appropriate legal structure for the NGO, such as a trust, society, or Section 8 company. Each structure has its own set of regulations and requirements, so select the one that best suits the goals and operations of the NGO.
- Governing Document: Draft a governing document, which could be a trust deed, memorandum of association, or articles of association, outlining the objectives, rules, and regulations governing the NGO’s operations. This document should comply with the relevant laws and regulations.
- Board of Trustees or Governing Body: Form a board of trustees or governing body responsible for overseeing the activities and decision-making processes of the NGO. Ensure the board comprises individuals committed to the organization’s mission and possesses diverse skills and expertise.
- Registration Process: Initiate the registration process with the appropriate regulatory authority based on the chosen legal structure. This typically involves submitting the necessary documents, such as the governing document, along with the application form and prescribed fees.
- Compliance: Comply with all statutory requirements, including tax obligations, filing annual reports, and maintaining proper accounting records. NGOs must adhere to the provisions of the Foreign Contribution (Regulation) Act (FCRA) if they receive foreign funding.
- Transparency and Accountability: Maintain transparency and accountability in the NGO’s operations by regularly publishing financial reports, conducting audits, and ensuring effective governance practices.
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Incorporating Firms as Members
In addition to individuals and associations of persons, Section 8 also permits the inclusion of firms as members within these companies.
Absence of Mandatory Initial Investment
Section 8 companies, unlike their counterparts, are not bound by any stipulated minimum requirement for paid-up share capital.
Restricted Liability
In Section 8 companies, members are exclusively subject to limited liability, ensuring that their obligations cannot extend beyond predetermined limits under any circumstances.
Government Authorization
Section 8 companies are only permitted to operate upon obtaining a license from the Central Government. Furthermore, the Government retains the authority to withdraw this authorization if deemed necessary.
Advantages
Given their charitable aims, Section 8 companies enjoy various privileges and exemptions provided by the Companies Act.
Philanthropic Goals
Section 8 companies are not profit-driven entities. Their primary objectives revolve around advancing charitable causes such as science, culture, research, sports, religion, and similar endeavors.
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Process of Private Limited Company Registration
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01
Verifying Name Availability
Registering a name entails ensuring it does not closely resemble an existing company name or trademark. While the Companies Act of 2013 provides some flexibility in selecting a company name, certain regulations and limitations must be adhered to. It’s recommended to provide two preferred names in order of preference. The application process will involve applying the company name rules and guidelines to determine suitability.
02
Obtain digital signature ( dsc)
During the registration process, all the documents are submitted online through MCA Portal. The incorporation forms are required certification of the directors and shareholders using digital signature certificate. All directors and shareholders should have a digital signature certificate to authenticate the documents that are being filed.
03
Drafting Additional Documentation
In addition to the Memorandum of Association (MOA) and Article of Association (AOA), which respectively outline the company’s objectives and internal workings, several other documents are crucial for company registration. These include the Ground of Application, which provides the basis for seeking registration or specific actions from authorities. Declarations serve as formal affirmations of the accuracy and legality of information presented, while affidavits offer sworn statements verifying the truthfulness of disclosed details. Various statements, such as financial disclosures and compliance assertions, further elucidate the company’s standing and adherence to legal requirements. All declarations and affidavits undergo notarization and stamping for legal validity. These additional documents ensure transparency, compliance, and legitimacy throughout the registration process.
04
Submission of Spice 32 Form for Company Formation
Submitting the incorporation form to obtain approval from the central government and the Certificate of Incorporation entails attaching required documents as per Form Spice-32.
05
Granting of License and Certificate of Incorporation
Upon thorough document verification, the Registrar of Companies (RoC) will issue a Certificate of Incorporation along with a central government license, both containing unique six-digit identification numbers.
Documents Required For Private Limited Registration
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Two name of company ( proposed )
Main object details
Capital details ( authorized and paid up)
The copy of pan card
Self –attested copy of identity proof (voter card, passport, driving license)
Self-attested copy of address proof (bank statement, mobile bill, telephone bill, electricity bill not older than 2 months)
Photograph of all subscribers and directors
Email & mobile number
Digital signature
Utility bill for registered office address of the company, such as electricity bill/property tax bill/ telephone bill/mobile bill/gas bill etc.
For rented property ( rent agreement )
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FAQ's
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What is a Section 8 company, also known as an NGO?
A Section 8 company, commonly referred to as an NGO, is an organization whose primary objective is to engage in social welfare activities by promoting various domains such as commerce, education, research, art, science, sports, religion, and charity. In the event of any profit generated from the company’s operations, it is mandated that such profits be utilized solely for furthering the aforementioned charitable objectives.
Is it permissible for directors of Section 8 companies to receive a salary?
There are no limitations on providing remuneration, including salaries, to employees or directors of Section 8 companies.
How does a Section 8 company get registered?
To register a company with charitable objectives under Section 8 of the Companies Act, an individual or an association of persons must submit an application to the Registrar of Companies using the necessary forms specified for this purpose.
Are Section 8 companies subject to GST?
Although the definition of “taxable person under GST” encompasses trusts, societies, and Section 8 companies, these entities typically do not engage in economic activities akin to trading and commerce. Consequently, they are not considered taxable persons under GST.
What distinguishes between Section 12A and Section 80G registrations?
Registering under Section 12A enables a Section 8 company to be exempted from tax liabilities, while Section 80G registration provides tax benefits to individuals who donate to the NGO. This incentivizes more donations, thereby supporting the organization’s objectives.
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