A Section 8 Company is a company registered under companies act, 2013 the objects of which is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports research, etc. and intends to apply its profits, if any, or other income in promoting its objects; and to prohibit the payment of any dividend to its members.

Section 8 company is similar to a Trust or Society with an exception that a Section 8 Company is registered under the regulations of the Central Government while the Societies and Trusts are registered under the regulations of the State Government.

The Amendments in the Companies Incorporation Rules has brought new and simplified process of Incorporation of Section 8 Companies.

Company registered under Section 8

The various advantages of Section 8 Company Registration are:

> There is no limit over section 8 companies for the minimum capital requirement.

> Section 8 Company is exempted for the payment of stamp duty applicable for registration.

> Numerous tax exemptions are provided to section 8 companies as well as to the donorswho are contributing to Section 8 Companies.

> Any of the registered partnership firms can also be a member in its individual capacity.

> Unlike the names requirements of the private limited or a public limited company, a section 8 company does not mandatorily required to use a suffix next to its name such as Pvt. Ltd or Ltd.

Steps involved in Incorporation of Section 8 companies are:

1. Reserve the proposed names of the company in part-A of Spice+ form. In the form, specify the business activity of the company with two proposed names. In case of Rejection, further two names can be applied within a certain time limit (20 days).

2. The forms for incorporation of the company will be filed online for which we need to apply DSC (Digital Signature Certificate) to sign the forms electronically. DSC has to be applied for each and every shareholder and Director of the Company.

3. Once the name is approved, fill the application form part-B of Spice+ along with the attachments required. The form will contain information like total number of directors and members, Authorized and paid-up capital, registered address of company, directors and member detail. Other forms will become enable to be filed like AGILE form in which detail regarding EPFO and ESIC registration and GSTIN registration details is required.

The documents to be attached in forms are proof of identity and residence of the directors and members, proof of registered address of the company, declaration by the directors etc. In Section 8 Company additional documents need to be attached:

  • The physical copy of MOA draft duly signed by members and witnesses
  • The physical copy of AOA draft duly signed by members and witnesses
  • Declaration in form INC-14 by any practicing professional

After filing all the details, download the forms attach DSC and then upload it on the MCA website.

4. ROC will issue Certificate of Incorporation once the application of Incorporation of the company is approved.

5. The Company shall file for seeking approval for commencing the business within 180 from the date of incorporation of the Company by filing form INC-20A.

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You may contact the author for further information at 7048914151 or [email protected]

Disclaimer: The above article is only for information purpose and is on based on the author’s interpretation of the relevant provision. The same should not be considered as professional advice.

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Qualification: Graduate
Company: TAXWIZERS CONSULTANT PVT LTD
Location: DELHI, New Delhi, IN
Member Since: 06 May 2019 | Total Posts: 16
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