In India, there are 3 legal forms exist for an NGO or Non-Profit Organizations i.e Trusts, Societies and Section 8 Companies.
Indian Trusts have no central law; Indian Societies have different legal and institutional frameworks from state to state while Section 8 companies have one uniform law across the country – Companies Act, 2013. It is this robust Act that regulates the formation, management and accountability of a Section 8 Company, thus making it more closely regulated and monitored than trusts and societies, and recognized all over the world.
A Non-profit Company or Section 8 Company is a Company which:
The fundamental aspect of Section 8 Company is that it is created for the non-profit motive and it forbids the payment of divided. That means income, if any of Section 8 Company must be used for the objects for which Section 8 Company is created.
Application for name availability must be made in “RUN” facility. The name of Section 8 Company shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust, and the like etc. One can propose maximum 2 names at a time and 1 resubmission is allowed in RUN facility. Fees for RUN is Rs. 1000/-. It is advisable to attach the object clause of the proposed company. Name once approved is valid for 20 days.
The next step is to get class 3 digital signatures of first subscribers and directors which are required for filing incorporation form with the ROC.
MOA is the charter of the company and defines the scope of its activities. An AOA is a document which regulates the internal management of the company. MOA of Section 8 Company must be in form INC-13 while there is no format prescribed for AOA for Section 8 Company. One can adopt table F provisions. MOA & AOA of the company shall be signed by each subscriber who shall mention his name, address, description and occupation in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address, description and occupation.
After getting proposed name approval, one may go ahead with filing of form SPICe 32.
Attachments of SPICe 32:
The following are the documents which are required to be attached with the SPICe form for incorporation of Section 8 Company.
1. Memorandum of Association in Form INC-13;
2. Articles of Association; (No Specified format)
3. Declaration in Form INC-14 by CS/CA/CWA in practice, that the draft MOA & AOA have been drawn up in conformity with the provisions of Section 8 and rules made thereunder and that all the requirements of the Act and the rules made thereunder relating to registration of the company under Section 8 and matters incidental or supplemental thereto have been complied with;
4. Declaration by each of the persons making the application in Form INC-15;
5. An estimate of the future annual income and expenditure of the company for next three years;
6. Name Approval Letter received from CRC;
7. Consent and Declaration by first Directors in Form DIR-2;
8. Self-declaration by first subscribers in Form INC-9;
9. PAN card of first directors and subscribers;
10. Aadhar card of first directors and subscribers;
11. Proof of Registered office like Sale Deed/Lease Deed/Rent Agreement etc;
12. Latest Utility Bill of Registered office like Electricity Bill;
13. NOC of owner if registered office is taken on rent/lease.
SPICe 33 and 34 i.e e-MOA and e-AOA can’t be used for Section 8 Company. Section 8 companies are mandatorily required to file MOA and AOA as pdf attachments to SPICe-32.
(Republished with amendments)