Section-8 company is a company registered with the Registrar of Companies under the Ministry of Corporate Affairs. The company run their functions only for the welfare of the society and also work to help the poor section of the society and to promote their livelihood. They work for the protection of the earth, environment, other living organisms, and work in the field of art, commerce, literature, education, health, research and development, etc. The company works for non-profit motive, their main objective is only to help the needy without making any profit. The income earned by the company shall be used only for the objective of the company, the company cannot distribute the profit or income from its members as a dividend. The section-8 company can be registered either as a private limited company or as a public limited company, if it is registered as private limited then a minimum of 2 people are required and if it is registered as a public limited then a minimum of 7 people are required at the time of registration but the section-8 company cannot be registered as a one person company. To start the section-8 company there is no minimum capital required which means the company can be started with Rs. 2000/- as well.
Documents Required For Section 8 Company
For Directors & Members
- PAN card
- Passport size Photo
- Id proof (Driving license/passport/voter id card); anyone
- Address proof (Bank statement/electricity bill/telephone bill/mobile bill); anyone but is should not be older than 2 months
For Registered Office Address
- If the property is owned then sale deed or house tax receipt, if rented then rent agreement
- Utility bill (Electricity bill/mobile bill/telephone bill/gas bill); anyone but it should not be older than 2 months.
- NOC from the owner of the property
Registration Process Of Section-8 Company
Step 1 - Name Application
The very first step is to file a name reservation application to the government and if the name is approved it is valid for 20 days only. The final form needs to be submitted within these 20 days otherwise the name will get expired and a new name application has to be filed. There is an exemption given to the section-8 company for using the word “private limited” or “limited” at the end of the name of the company
Step 2 - Apply For DSC
Every director must have DSC before filing the application form for company registration. The directors will have to do video verification and OTP verification for generating the digital signatures
Step 3 - Preparation & Signing Of Documents
After name approval of the company certain documents will be drafted like director’s consent, NOC, memorandum of association, article of association etc and the same will be signed by the directors and members of the company
Step 4 - Final Form Submission
After completion of all the above steps a final form shall be submitted to the registrar of companies in whose jurisdiction the registered office of the company is situated. If the registrar is satisfied with the application, then the registrar will issue a certificate of incorporation, license of the section-8 company. Apart from the certificate of incorporation and license the registrar will allot PAN & TAN to the company and DIN to the directors.
Also Read: Advantages & Disadvantages Of Section 8 Company
It takes around 10-15 days to complete the registration process of the section 8 company. And after its registration, the company has to follow some guidelines of the companies act like the company has to appoint an auditor within 30 days from its registration and has to submit the form INC-20A, and has to do all the mandatory annual compliance every year to avoid penalties.
The section 8 company works for the social welfare of the society without the motive of earning any profit or income. If the company earns any income, they will use that only for the fulfilment of the objective of the company and not to distribute among the members. Due to its social services the company earns trust and support from the general public and they get an easy donation from the public. The section-8 company works only for others and to help, support the weak section of the society.
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