SECTION 8 COMPANY
@ Rs 19999 All Inclusive No Hidden Charge
*Stamp Duty Extra For Madhya Pradesh, Punjab & Kerala
Section 8 company is a non-profit organization which works for the welfare of society, environment, human, etc.
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WHAT IS SECTION 8 COMPANY?
Section-8 Company registered under Companies Act, 2013 for social activity without having any intention for earning a profit. The primary objective of the company is working for the development of the society, protection of the earth and environment, working in the field of art, commerce, literature, sports, all living creatures protection, research, and development, etc. without earning any profit. The company is incorporated in the form of either private limited company or public limited company, but it cannot use the “private limited” or “limited” word at the end of the name of the company. The company cannot distribute the dividends to its member or share the profit. Whatever profit is earned by the company it shall be utilized only for the purpose for which the company is incorporated. In simple term, section-8 Company is a non-profit organization whose motive is to contribute its effort to the society for its development and betterment but under companies act this non-profit organization is known as section-8 Company.
What Do You Get In Section 8 Company
Documents Required For Section 8 Company Registration
Process Of Section 8 Company Registration
- Submit Documents
- Name Approval
- Digital Signature
- Documents Preparation
- License Application
- Company Incorporation
You need to submit all the required documents.
We will verify all the documents and then apply for the name approval through the RUN application form. In one form we can apply for 4 names. Name of the company is subject to Government approval.
After the name approval of the company, we will apply for the Digital Signature. For Digital Signature Video and Mobile Verification will be required.
Once the ROC issues the name, we will draft Memorandum of Association, Article of Association and subscription statement of your company and required documents. We will prepare for license application as well as for company registration.
We will apply for the License of your section 8 company in form “INC-12” along with a memorandum of association & article of association.
After the license is issued by the ROC, we will submit all the documents along with the issued license to the ROC and will apply for the PAN and TAN simultaneously. Once Registrar of Companies duly verifies all the documents submitted, the approval is given, and the Certificate of Incorporation sent to you on your email id.
More About Section 8 Company
SHAREHOLDER: As compared to private limited and public limited company section-8 Company also have shareholders. The minimum limit of shareholders depends upon the category in which the company is registered. If the company is registered in the form of the private limited company, then the minimum shareholder shall be 2 and maximum shall be 200 but if the company registered under the category of the public limited company the minimum limit shall be 7 and maximum no limit. However, the shareholders of the company shall not take part and distribute the profit earned by the company.
DIRECTORS: The provisions for the appointment of the director are same as applicable under the private limited company and public limited company. If it is formed as a private limited company, then a minimum of two directors are required for the registration of the company. If it is registered in the form of a public limited company category, then a minimum of three directors is necessary at the time of registration. However, the maximum limit of the director of the company can be 15.
NAME: It is mandatory to use the word “private limited” or “limited” at the end of the name of the private limited company and public limited company, but the section-8 company has an exception for using such words. Section-8 Company can use the following words at the end of the name of the company:
- Charities; and many other
For example Reliance Foundation, TATA Foundation, etc.
REGISTERED OFFICE: Every company needs a registered office at the time of incorporation of the company. The registered office is mandatory for every company as all the documents and notices shall be sent to that address, and this address shall be mentioned in every document, letterhead, deeds, all other documents of the company
CAPITAL: Now there is no requirement for having the minimum money in the company. The company can use any amount as its capital amount, but the paid-up share capital of the company shall be less than the authorized capital.
OBJECTIVE: Objective means the business activity of the company, and it shall not be for a profit-making purpose. The company will work only for the betterment, development and the protection of the society, nation, environment, living creatures. The main field of the organization can be society, sports, religion, art, commerce, protection of the environment, research and development and all other grounds which gives benefit to the community and the nation. The company cannot share the profit between the members of the company. All the income earned by the company shall be utilized only for the completion of the objective of the company.
- The company's main objective is to promote and develop the society. The company looks at the weaker part of the nation and cures it. Due to its aim, the company gains the trust of the general public due to which the brand value of the company increased.
- The company has non-profit motive objective due to which it enjoys the numerous tax exemption under Income Tax Act, 1961.
- Like the other companies, the section-8 company also enjoys the separate legal entity status. Moreover, the members and the directors of the company are the independent part of the company. Their individual status is different from the status of the company
- The company enjoys all the privileges like the limited company subject to limited liability obligation.
- Relaxation to use the word "private limited" and "limited" at the end of the name.
- There is no minimum capital requirement for the section-8 company, but it can be increased or decreased anytime during the life of the company.
- Easy to get the donation from the general public. The company works for social welfare due to which it receives the financial help from the people in the form of the donation.
- The company is operating for the development and the protection of the society due to which it has to follow specific strict rules and regulations so that the company shall work for the benefit of the community not for the particular person.
- The profit of the company cannot be distributed among the shareholders of the company. Company shall utilize its profit and earned income only for the objective of the company.
- The company shall not distribute any dividend to its shareholders. In private limited company and public limited company the company spread its part of the profit to the shareholders of the company but under this company distribution of dividend is strictly prohibited.
- The company cannot alter its memorandum of association and article of association without the approval of central government.
- The company cannot operate its activity in any field rather than of its objective as mentioned in the memorandum of association.
- Although the company enjoys specific exemption on income under income tax act, 1961 still the company fall under the flat 30 % tax rate. The company has to pay 30% of the income earned during the financial year of the company to the government.
- The government shall revoke the license issued for operating section-8 Company if the company contravenes any provision or shall not follow any guidelines issued by the government or perform its functions fraudulently.
- If the company wants to convert itself from section-8 Company to any other kind of company, then it shall comply all the provisions before its conversion.
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Section 8 Company Registration @19999/-
Frequently Asked Questions
Ques: Which kind of functions can be operated in the section-8 company?
A section-8 can run its function only for the welfare of society. The area in which a section-8 company can operate its functions are:
- Research & Development
- Literature, etc. but only with not profit-making purpose.
Ques: What are the minimum and maximum limit of the members in the section-8 company?
If a section-8 company is registered under the format of a private limited company then the minimum requirement of the member is 2 and the maximum limit of the member is 200 and if it is registered as a public company then the minimum limit is 7 but there is no maximum limit.
Ques: Can a section-8 company change its business activity?
Yes, the section-8 company can change its business activity but it should be for social welfare, but if the company changed its activity from non-profit making purpose to profit-making purpose then firstly it should have to change its status from section-8 company to either private limited or public limited
Ques: What is the minimum requirement of the director in the section-8 company?
The minimum limit is either 2 if it is registered as a private limited company or 3 if it is registered as a public limited company.
Ques: What are the compliances of the section-8 company?
Once a section-8 company gets registered the following compliances need to be followed:
- Open a bank account and deposit the paid-up capital
- Submit Form INC-20A within 180 days from its registration
- Appoint auditor within 30 days from its registration
- File annual report and financial statement after the completion of one financial year
- File Income Tax Return for the period of one financial year.
- Intimate the ROC regarding any changes in the company
Ques: Can a NRI or foreign citizen can incorporate section-8 company in India?
Yes, any NRI or foreign citizen can incorporate a section-8 company in India and can be appointed as a director in the company but at least one director in the section-8 company shall be an India Citizen and must reside in India for the period of at least 182 days in a year.
Ques: Can a section-8 company distribute its profit among its members?
No, the section-8 company cannot distribute its profit to its member it can only use it for its objective.
Ques: Can a section-8 company take foreign donation?
Yes, but before taking any foreign donation it should first have to take FCRA registration from the RBI.
Ques: Can the Central Government cancel the license of the section-8 company after its registration?
Yes, if any time the central government thinks fit that the company has violated any condition for issuing the license or the company is using its profit for the distribution among the member or the motive become the profit-making then the central government can cancel or revoke its license issued.
Ques: What is the validity of the license and registration certificate granted to the section-8 company?
There is no time limit for the validity of the license and registration certificate of the section-8 company, it is valid until the company continues its function.