Section 8 Company
Section 8 Company is a legal entity that promotes commerce, art, science, sports, education, research, social welfare, religion, charity, environmental protection, and the likes of it. Though similar to Trusts or Societies, a Section 8 Company is registered under the Ministry of Corporate Affairs for charitable / not-for-profit purposes and administered through the Offices of the Registrar of Companies (ROC).
Incorporation of Section 8 Company under Company Law:
Section 8 Companies Incorporation rules according to companies (Incorporation) Rules, 2014,
Rule 9 to 11 – Reservation of Name;
Rule 12– Application for Incorporation of company
Rule 13– Signing of Memorandum of Articles
Rule 14– Declaration by professionals
Rule 15– Affidavit for subscribers and first directors
Rule 17 – Particulars of first Director of the company and their consent to act as such
Rule 18– Certificate of Incorporation
Rule 38- Simplified Proforma for Incorporating Company 7,9[Electronically Plus (SPICe+)
Apply of name through RUN. We can’t directly go through the spice form for incorporation of section 8 company.
1. SPICe+ Part A represents the section wherein all details with respect to name reservation for a new company has to be entered.
2. SPICe+ Part B represents the section wherein all remaining details required for incorporation of a company has to be entered
In case subscriber is a Body Corporate: –
Board Resolution for subscribing shares, making investment & Authorizing a person to subscribe & Sign MOA
STEP – 3: Preparation of MOA & AOA (Electronic or Physical):
After proper filing of SPICE+ form applicant has to move on filling of information in MOA and AOA form Dashboard Link. All the information which are common in PART-B and MOA/AOA shall be auto fill in MOA and AOA.MOA and AOA are also web-based forms.
After opening of web-based form fill all the information in the MOA/ AOA as per requirement of of Schedule I. After download PDF affix DSC of all the subscribers and professional on subscriber sheet of the MOA & AOA.
Procedure for drafting MOA of section 8 Company start from:
Clause 1 which contain name of the section 25 or 8 company example XYZ Foundation or XYZ association etc.
Clause 2 state to mention state in which registered office of the proposed section 8 Company will be situated example NCT of Delhi for Delhi or State of Haryana for Haryana etc.
Clause 3 of INC-13 i.e. MOA contains charitable object of section 8 company i.e. to establish industrial training center or college or social service center etc. i.e. only object having charitable purpose and restricted company to support with its fund which will make trade union or other company which are observed by its member.
Clause 4 of moa clearly mention that object of the company extend whole of India except J & K.
Clause 5 of the MOA restricted diversion of section 8 company income or property to any of its member or its related party in any form. It has also been clarified that profit of such company can only be utilized for its charitable object. Prudent Remuneration allowed to its member only when he actually provides services to the company.
Clause 6 provides that Memorandum of Association cannot be altered unless alteration has been previously approved by the registrar of company
Clause 7 state liability of the member is limited
Clause 8 state liability of the member is limited
Clause 9 required to maintain certain record and books for expenditure income assets etc. and once in every year accounts shall be examined by auditor about correctness of balance sheet and income & expenditure.
Clause 10 mentioned about dissolution of Section 8 Company and whereas
Clause 11 states section 8 company can be amalgamated only with section eight company having similar object and
Clause 12 contains detail of subscriber of MOA. Format of AOA of section eight company is same as for Private Limited Company registration.
Step 4: Fill details of GST, EPFO, ESIC, BANK Account in AGILE PRO:
All the information which are common in PART-B and AGILE PRO shall be auto fill in AGILE Pro.
EPFO/ ESIC:It is mandatory to apply for ESIC and EPFO.
Bank Account: It is mandatory to open bank account through this form. Bank account branch shall be assigned according to nearest branch to the Registered office of the Company.
Step 5: Fill details of INC-9
Step 6: Filing of forms with MCA
Key Points in Section 8 Company:
REGISTRATION UNDER SECTION 80G: If a section 8 company gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction of 50% from his/its taxable income. The Company has to apply in Form10G to the Commissioner of Income Tax for such registration. Normally this approval is granted for 2-3 years but can be granted earlier depending upon the situations.
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. In No Event Shall I Shall Be Liable For Any Result Arising Out Of Or In Connection With the Use of the Information.