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YOU NEED TO KNOW HOW TO REGISTER SECTION 8 COMPANY?

Registering a  Section 8 Company, in India involves several crucial steps. Initially, apply for name reservation through the Ministry of Corporate Affairs (MCA) portal. Following that, prepare the Memorandum of Association (MOA) and Articles of Association (AOA) in compliance with Section 8 of the Companies Act. Subsequently, file an application for a license under Section 8, detailing the company’s objectives and activities. Once the application is complete, submit it along with necessary documents to the Registrar of Companies (RoC). Upon approval, the RoC will issue a license and Certificate of Incorporation for the Section 8 company, officially recognizing its non-profit status. Visitofficialwebsite

PROCESS TO REGISTER SECTION 8 COMPANY

1. Decide on the Objectives and Mission:

Before you begin the registration process, you should have a clear understanding of the objectives and mission of your Section 8 company. Section 8 companies are established for promoting non-profit purposes, such as education, art, science, sports, social welfare, and more.

2. Choose a Suitable Name:

Select a unique name for your Section 8 company. The name should reflect the objectives and should not be similar to the names of existing companies or registered trademarks. Ensure that the chosen name is in compliance with the naming guidelines for Section 8 companies.

3. Gather Directors and Members:

A Section 8 company should have a minimum of two directors and a minimum of two members. Directors are responsible for the management and administration of the company, while members can be individuals or other legal entities.

4. Obtain Digital Signatures:

Directors of the company must obtain Digital Signatures (DSC) to sign the digital documents that will be submitted during the registration process.

5. Apply for Director Identification Number (DIN):

Each director needs to apply for a Director Identification Number (DIN) through the Ministry of Corporate Affairs (MCA) portal. DIN is a unique identification number assigned to individuals intending to be directors of companies in India.

6. Apply for Name Approval:

Submit the proposed name of your Section 8 company for approval to the Registrar of Companies (RoC) through the RUN (Reserve Unique Name) form. You can submit up to two names in order of preference. Ensure that the name aligns with the non-profit objectives, and it’s unique and not misleading.

7. Draft Memorandum and Articles of Association:

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) of the company. These documents define the objectives, rules, and regulations governing the company. They must comply with the standard format as provided by the Companies Act.

8. Apply for License under Section 8:

Once the name is approved, you need to apply for a license to operate as a Section 8 company. This application is submitted in Form INC-12 to the RoC. Along with the application, you must attach the following documents:

  • The draft MOA and AOA
  • Declaration in Form INC-14 by a practicing Chartered Accountant or Company Secretary verifying that the draft MOA and AOA conform to the Section 8 requirements.
  • A statement of assets and liabilities prepared by a practicing Chartered Accountant.
  • A statement of estimated future income and expenses for the next three years.
 

9. Approval from RoC:

The Registrar of Companies will review the application and the attached documents. If everything is in order, the RoC will grant a license to the company to operate as a Section 8 company.

10. Apply for Incorporation:

Once you have obtained the license, you can proceed to file the application for incorporation in Form INC-32. You need to submit the following documents with the application:

  • Memorandum of Association (MOA)
  • Articles of Association (AOA)
  • Declaration by the directors in Form INC-14
  • Declaration by a practicing Chartered Accountant in Form INC-15
  • Copy of the license obtained under Section 8
  • Proof of registered office address
 

11. Certificate of Incorporation:

If the RoC is satisfied with your application, they will issue a Certificate of Incorporation. This certificate signifies that your Section 8 company is officially registered and can commence its operations.

12. Apply for PAN and TAN:

After incorporation, you should apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for your company. These are essential for your company’s taxation and financial transactions.

13. Comply with Annual Filing Requirements: 

As a Section 8 company, you must comply with annual filing requirements, which include filing financial statements, annual returns, and other documents with the Registrar of Companies.

14. Start Non-Profit Activities:

Once you have received the Certificate of Incorporation, you can start carrying out your non-profit activities in line with the objectives of the company.

BENEFITS OF REGISTER SECTION 8 COMPANY

Registering a Section 8 company in India comes with several benefits, which make it an attractive legal structure for organizations with non-profit and charitable objectives. Here are some of the key benefits of registering a Section 8 company:

  1. Limited Liability: Members and directors of a Section 8 company have limited liability. Their personal assets are generally protected from the company’s financial obligations, providing a level of security.

  2. Non-Profit Orientation: Section 8 companies are explicitly established for non-profit and charitable objectives, making them ideal for organizations with philanthropic and social welfare goals.

  3. Tax Benefits: Section 8 companies enjoy specific tax exemptions and benefits. These benefits may include exemptions from income tax and other applicable taxes, subject to compliance with relevant regulations.

  4. Corporate Identity: Registration as a Section 8 company provides a legal identity and recognition, enhancing the credibility of the organization in the eyes of donors, partners, and beneficiaries.

  5. Access to Foreign Contributions: Registered Section 8 companies can legally accept foreign contributions, subject to compliance with the Foreign Contribution (Regulation) Act, 2010 (FCRA). This opens doors to international funding.

  6. Transparency and Accountability: Section 8 companies are required to maintain transparent operations, file annual financial statements and reports with regulatory authorities, and undergo audits, ensuring accountability to stakeholders.

  7. Legal Recognition: Section 8 companies have legal recognition and a distinct legal structure tailored to their non-profit objectives, which can aid in partnerships and collaborations with other organizations and government agencies.

  8. Social Impact: The primary benefit is the ability to make a positive social impact by addressing important issues and serving the community in areas such as education, healthcare, social welfare, and more.

  9. Easier Fundraising: Registered Section 8 companies can more effectively raise funds through donations, grants, and other philanthropic means, as donors are often more comfortable contributing to a legally recognized non-profit entity.

  10. Better Access to Resources: Being a Section 8 company may help in obtaining physical infrastructure, facilities, and resources required for running charitable programs and services.

HOW TO REGISTER SECTION 8 COMPANY

How do I form a Section 8 company

  1. Step 1: Obtain Digital Signature Certificate (DSC) …
  2. Step 2: Obtain Director Identification Number (DIN) …
  3. Step 3: Reserve the Company Name. …
  4. Step 4: File the Application for Incorporation. …
  5. Step 5: Obtain a License for Section 8 Company.

How much does it cost to register a Section 8 company in India

Section 8 Company Registration State WiseRegistration Fees
✅ Delhi₹7,499
✅ Goa₹7,499
✅ Gujarat₹7,499
✅ Haryana₹7,499

Can Section 8 company pay salary

Yes, a Section 8 company can pay salaries to its employees. While Section 8 companies are formed for promoting charitable purposes, social welfare, or other non-profit objectives, they are still allowed to have salaried employees. The payment of salaries is a common practice to attract and retain skilled individuals who contribute to the organization’s mission.

However, it’s essential for the Section 8 company to comply with relevant legal and tax regulations. The payment of salaries should be reasonable and in line with industry standards. Additionally, the company must fulfill its statutory obligations, such as deducting TDS (Tax Deducted at Source) from salaries, contributing to provident funds, and adhering to labor laws.

Is GST required for Section 8 company

Section 8 companies in India are generally exempt from Goods and Services Tax (GST) for the supplies of goods or services provided by them. Section 8 companies are formed for promoting charitable purposes, social welfare, or other non-profit objectives. Since their primary focus is on charitable or non-profit activities, they are often exempt from certain taxes, including GST.

It’s important to note that exemptions and regulations can change, and it’s advisable to check for any updates or amendments to tax laws. For the most accurate and current information, you may refer to the official website of the Goods and Services Tax Network (GSTN) or consult with a tax professional who is up-to-date with the latest tax regulations in India.

CONCLUSION OF REGISTER SECTION 8 COMPANY

In conclusion, registering a Section 8 company in India is a significant step for organizations with non-profit and charitable objectives. This legal structure is designed to promote social welfare, education, art, science, sports, religion, charity, or other non-profit causes. The key takeaways regarding the registration of a Section 8 company are as follows:

Overall, Section 8 companies play a crucial role in advancing non-profit and charitable activities in India. Their legal structure provides a solid foundation for organizations committed to making a positive impact on society, and they benefit from legal recognition, limited liability, and tax exemptions. However, it’s important to stay updated on the latest regulations and consult with legal experts for the most current information and guidance regarding Section 8 company registration.

HOW AURIGA ACCOUNTING HELP YOU TO REGISTER SECTION 8 COMPANY

Auriga Accounting or the details of how they assist in registering Section 8 companies. However, here are ten general points that professional accounting and consulting firms might offer in assisting with the registration of a Section 8 company:

  1. Consultation:

    • Providing initial consultation to understand the client’s objectives and requirements for forming a Section 8 company.
  2. Name Reservation:

    • Assisting in the selection and reservation of an appropriate name for the Section 8 company, ensuring compliance with regulatory guidelines.
  3. Document Drafting:

    • Drafting the necessary legal documents, including the Memorandum of Association (MOA) and Articles of Association (AOA), in accordance with Section 8 requirements.
  4. License Application:

    • Guiding through the preparation and submission of the license application under Section 8 of the Companies Act.
  5. Compliance Management:

    • Ensuring adherence to all legal and regulatory requirements throughout the registration process.
  6. Financial Advisory:

    • Providing financial advice and structuring to align with the non-profit objectives of the Section 8 company.
  7. Government Liaison:

    • Interacting with government authorities, such as the Registrar of Companies (RoC) and Central Government, to facilitate approvals.
  8. Tax Consultation:

    • Offering guidance on tax implications and ensuring compliance with tax regulations applicable to Section 8 companies.
  9. Due Diligence:

    • Conducting due diligence to verify the eligibility and compliance of the organization with relevant laws.
  10. Post-Incorporation Support:

    • Offering ongoing support post-incorporation, including compliance management, accounting, and financial reporting.

It’s recommended to contact Auriga Accounting directly or visit their official website for specific details on their services and how they can assist in registering a Section 8 company. Additionally, legal and regulatory information may change, so consulting with them directly will provide the most accurate and up-to-date information.

June 17, 2024

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