Section 8 Company Registration
Section 8 Company is defined by Companies Act as one who promote the fields of arts, commerce, education, sports, research, science, religion, environmental protection and other similar objectives. The Section 8 Company was previously described in Section 25 of Companies Act, 1956. The new Act has now prescribes the new objectives that Section 8 Companies have. These companies have no object to make profits. It is purely charitable in nature. There is no minimum paid-up share capital. One of the main aspects is that Section 8 Company has limited liability which protects the assets of the members in Section 8 Company. It functions only if the Central government gives the license to it.
- The object of the company is charitable and so many benefits and exemptions are accorded to it.
- The suffix of the company should be foundation, federation, electoral trust etc.
- Section 8 companies can have the termination by themselves either voluntarily or by the order given by the Central government.
- If the section 8 Company contravenes the provisions then it will incur into penal charges. Sometimes imprison too.
- High fees and Stamp duties are not payable for the sake of registration.
- They can enjoy separate legal status and have perpetual existence.
- At-least two directors and shareholders are necessary.
- The proposed company should have the registered office address.
- Every subscriber and the Director should have DSC.
- The Directors re required to have the DIN.
- The declaration is provided by the auditor.
Documents required for section 8 company registration
- PAN card
- Aadhaar card
- Address proof
- Passport size photo.
Proposed Director and Shareholder – Indian citizen
Proposed Director and shareholder – Foreign national
- Photocopy of Passport
- Photocopy of address proof
- Photocopy of nationality proof
- Two passport sized photos
Register office documents
- Rental agreement if place is on rent.
- Electricity bill must be provided
- NOC certificate from landlord is necessary to operate.
Procedure to register
Step 1: Name Application
An application is filed to reserve the name of the company with ROC.
Step 2: Name approval/rejection
On receipt of the application CRC can reject or accept the application.
Step 3: Application for DSC
DSC to be obtained for all subscribers and Directors of the company.
Step 4: Preparation of MOA and AOA
MOA and AOA must be drafted and digital signature certificate must be attached in both the documents.
Step 5: Forms and Documents filing
Application forms for the registration of Private limited company should be filed with MOA, AOA along with other supporting documents if any. Also prescribed fees should be paid..
Step 6: Certificate of Incorporation
When satisfied the ROC (Registrar of Companies) shall issue the Certificate of Incorporation. Also DIN (Director Identification Number), PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) will be allotted.
No. Company with unlimited liability cannot have registration as Section 8 Company.
Subject to compliance with FEMA regulations, it can open branch offices. Such non-profit companies outside India can register and promote Section 8 Company as separate legal entity in India.
Yes. The Section 8 Company can be converted to other type of company like OPC. It is prescribed under the Section 8(4) (ii) with rules 21 and 22 of Companies rules 2014.
Yes. Section 8(1) of the Companies Act 2013 permits other type of companies to have registration as Section 8 Company.
Yes. Section 8 Company can be holding company of another company..
Yes. AOA of section 8 Company can have entrenchment clause. According provisions of section 5(3).
Any individual, NRI can become member of Section 8 Company. According to Section 8 of the Companies Act 2013, firms can also be member of Section 8 Company.
Any individual, NRI or foreign person can become Director of Section 8 Company. He/she must be natural person with sound mind, above 18 years of age and should possess DIN.