Follow Us :

In India, there are several legal structures available for NGOs or Non-Profit Organizations, including Trusts, Societies, and Section 8 Companies. Among these, Section 8 Companies stand out due to their uniform regulation under the Companies Act, 2013, making them closely monitored and recognized internationally. This article aims to provide a step-by-step guide to incorporating a Section 8 Company, highlighting its significance and benefits.

Understanding Section 8 Company

A Section 8 Company, also known as a Non-profit Company, is incorporated with the objective of promoting various social, charitable, educational, or environmental causes. Unlike other forms of organizations, such as Trusts or Societies, a Section 8 Company prohibits the distribution of dividends to its members, ensuring that any profits earned are reinvested into furthering its objectives.

Procedure for Registration

1. Application for Name Availability:

The process begins with applying for name availability through the web-based form (Spice Part-A) on V3 portal. The proposed name must include terms like Foundation, Association, Federation, etc., indicative of its non-profit nature. A fee of Rs. 1000 is charged for this application, and once approved, the name remains valid for 20 days.

An Easy Guide for Incorporating a Section 8 Company in India

2. Obtaining Digital Signatures:

The next step involves obtaining Class 3 digital signatures for the first directors and subscribers, which are necessary for filing incorporation forms with the Central Registration Centre (CRC).

3. Preparation of SPICe Part-B Form:

Once the name is approved and necessary documents are prepared, the SPICe (Simplified Proforma for Incorporating Company Electronically) Part-B form is filed. Required attachments include Proof of Office Address, NOC for use of office Address, Director / Subscriber ID and Address Proff and 3 Years future Projections of NGO

4. Preparation of Other Forms:

After Submitting the Spice Part-B, Other forms (Agile Pro, INC-13 – eMOA, INC-31 – eAOA and INC-9) is visible on the dashboard. Prepare all the forms one by one and submit the forms.

5. Downloading and submission of the forms:

After submitting all the forms i.e. Spice – Part-B, Agile Pro, INC-13, INC-31 and INC-9, Download all the forms and applying required DSC of the directors / subscribers in each form and upload the forms on the MCA V-3 Portal. After uploading all the forms, file option will become visible. After that file all the forms with the CRC and make the payment of PAN/TAN and Stamp duty. The fees for PAN/TAN is 143 and Stamp duty is depends upon the ROC. If you select ROC Kanpur than the Stamp duty is 1010/- and in you select ROC Mumbai than the stamp duty is Rs. 100/-. Make the necessary payment. After making the payment, the form will be checked by CRC and if found correct than approved by the CRC.

Benefits of Section 8 Company Registration

Exemption from Stamp Duty: Section 8 Companies enjoy exemption from stamp duty on various transactions, reducing compliance costs.

Tax Deductions for Donors: Donors contributing to Section 8 Companies are eligible for tax deductions under Section 80G of the Income Tax Act, encouraging philanthropic support.

Flexible Capital Structure: Section 8 Companies can be formed with or without share capital, allowing them to raise funds through donations, subscriptions, or grants.

No Requirement for “Limited” Suffix: Unlike other company types, Section 8 Companies are not required to add “Limited” or “Private Limited” to their names, enhancing their credibility and recognition.

Conclusion

Incorporating a Section 8 Company in India involves a meticulous process governed by the Companies Act, 2013. Despite the regulatory requirements, the benefits and credibility associated with Section 8 Companies make them a preferred choice for organizations dedicated to social welfare and charitable activities. By following the prescribed procedure and adhering to regulatory norms, aspiring non-profit entities can establish themselves as Section 8 Companies, contributing positively to society while enjoying various statutory benefits.

Author Bio

Hello, I'm Garima Agrawal, a resident of Agra, where I currently lead a dynamic life. Armed with M.Com and M.Ed degrees, I've cultivated a passion for education and business. As the proud owner of MDF Consultancy Services, our platform, www.mydigitalfiling.in, specializes in online digital filing se View Full Profile

My Published Posts

Detailed Analysis on Section 43B(h) How to Check MSME Registration by PAN number माइक्रो और स्मॉल इंटरप्राइजेज (MSME) के लिए नए भुगतान नियम! View More Published Posts

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
April 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
2930