Section 8 Company Registration in India

Section 8 company means a company registered for Social causes such as the promotion of arts, commerce, science, education, sports, protection of the environment, religion, charity, etc.

By promoting it as a not-for-profit organization, the Act does not bar the company from profit creation but rather prohibits distributing profit among members. This says that all the income or profit from any activity of the company must be utilized towards the charitable purpose for which it is registered.

The company is registered under Section 8 of the Companies Act, 2013, which provides it special status due to its objects. Compared to other types of companies, Section 8 company enjoys various exemptions and relaxations.

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    Documents Required for Company Registration

    Photograph

    Photograph

    Latest Passport size Color photograph of all the promoters (Shareholders and Directors)

    Identity Proof

    Identity Proof

    Any of the following ID: Passport, Voter ID/Driving License of Shareholders and Directors.

    Registered office Proof

    Registered office Proof

    Latest & Clear Telephone Bill/Electricity Bill/ /Water/Gas Bill of the registered office address

    Pan Card

    Pan Card

    PAN Card of all shareholders and Directors. Foreign nationals must provide a valid passport.

    Address Proof

    Address Proof

    Latest Bank Statement/Telephone Bill/Electricity or Gas Bill/Water Bill of Shareholders and Directors

    NOC from owner

    NOC from owner

    No Objection Certificate from owner(s) of the premises of registered office.

    How to choose a name?

    UNIQUE NAME

    Mainly it builds the company brand and preferably be a coined word

    BUSINESS OBJECT

    Second part of name should suggest the business activity of the company

    SUFFIX

    Its name must include suffix like Foundation, Forum, Federation, Chambers, Association, Council, etc.

    CONSTITUTION TYPE

    The name does not require to add any suffix like “Private Limited” or “Limited”

    Six Stages of Company Registration in India

    01.

    Firms As Members

    Apart from individuals and associations of persons, Section 8 also allows firms to be members of these companies.

    04.

    Government License

    Such companies can function only if they have the Central Government’s license. The Government can revoke this license as well

    02.

    No Minimum Share Capital

    Section 8 companies, unlike all other companies, do not require a prescribed minimum paid-up share capital.

    05.

    Privileges

    Since these companies possess charitable objectives, the Companies Act has accorded several benefits and exemptions to them.

    03.

    Limited Liability

    Members of these companies can only have limited liability. Their liabilities cannot be unlimited in any case

    06.

    Charitable Objectives

    Section 8 companies do not aim to make profits. Their objectives are purely charitable in nature. They aim to further causes like science, culture, research, sports, religion, etc

    Process & Timeline for Company Registration

    • Application for Digital Signature Certificate
     
    • Checking Name availability
    • Application for Name Reservation
    • Reservation of Name
    • Drafting of MoA, AoA & other required documents
    • Payment of Stamp Duty
    • Notarization of required documents
    • Application to grant a license in form INC-12
    • Government processing time for approval
    • License under section 8 in form INC-16
    • Filing application for company registration
    • Application for PAN and TAN of company
    • Government processing time
    • Certificate of Incorporation

    Frequently Asked Questions​

    A company (NGO) which has main objective is to do social welfare by promoting commerce, education, research, art, science, sports, religion, charity, etc. If any profit generates from working of company then it would be applied for promoting the said object.

    There is no restriction in payment of remuneration to employees / directors of section 8 companies.

    Once the company is incorporated, it is in existence and active as long as the annual compliances are met with regularly or it is wound-up voluntarily.

    A person or an association of persons can make an application under section 8 of companies act to the Registrar of Companies using requisite forms to register a company with charitable objectives

    While the definition of “taxable person under GST” includes a trust, society, or section 8 company. These entities are not engaged in any economic activity just like trading and commerce so they cannot be treated as a taxable person under GST.

    A Section 8 or Charitable Company shall not pay any dividend to its members, but apply the surplus of receipts over payments for the promotion of its objectives.

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