As the Government of India is focusing on Ease of Doing Business many steps has been taken by MCA in relation to making easy process of Incorporation of Private/Public Limited companies in India. With the Introduction of Section in relation to CSR Activities in Companies Act 2013, many peoples from Society wants to Incorporate Society/ Trust/ Section 8 Company so that, funds can be raised from companies liable to CSR Funding. In today’s time, many persons want to incorporate Section 8 Company for Social Welfare activities but due to unawareness of its Incorporation Process and Compliances they hesitate from doing the same.

Registration of section 8 company

As per Section 8 of the Companies Act, 2013, where it is proved to the satisfaction of the Central Government that a person or an association of person proposed to be registered under this Act as limited company

(a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object

(b) intends to apply its profits, if any, or other income in promoting its objects and

(c) intends to prohibit the payment of any dividend to its members

will be registered as Section 8 Company.

In simple terms, a Section 8 company must promote a public cause and the proceeds generated by the entity must solely be used to support the stated public cause(s) only.

For Registration of Section 8 Company following Steps should be taken.

Step 1: Decide Name of your NGO/ Section 8 Company according to name approval Guidelines and Check its name availability on the www.mca.gov.in

Step 2: If Similar Name Company is already not registered then go for Name approval through Spice+ Form

SPICe+ part A

Ministry normally take 2-3 working day times for name approval. If name is rejected then resubmit the Form and if approved then go further.

Step -3 Then Prepare SPICe MOA And SPICe AOA and AGILE form along with other mandatory documents

Step-4 In mandatory Documents you have to provide Directors and Share holders

√ DIN Number (If Available)

√ PAN Card

√ Aadhar Card

√ Mail id and Mobile Number

√ Information related to their Education Qualification and Business/ Profession

√ Address proof of the Premises

√ Digital Signature of the Signing Authority

Step-5 After preparation of all documents SPICe+ form is required to be submitted with MCA as approved by Directors/Shareholder and Professional who is being appointed for the Incorporation Purpose.

Step-6 After successful submission of all documents your Application is being verified by Proper officer and if satisfied then your application is approved otherwise case it is rejected and required to be resubmitted again.

Some FAQ’s related to Section 8 Company Registration under Companies Act 2013 and its Compliances after Registration

Q1 – Whether a company registered under Section 8 of Companies Act 2013 can alter the Provision of its MOA or AOA at their discretion?

Ans – Section 8 (4) (i) of Companies Act 2013 prohibits a Section 8 Company from alteration of their MOA or AOA except with the previous approval of the Central Government.

As you know, Section 8 Company is created for Social welfare activities then the surplus amount will be used for Social welfare activities. It cannot be distributed as Dividends to the Shareholders. If due to any reason, this company is amalgamated with any other company then the other company must be section 8 company and must have similar objects.

Q2 – After Section 8 registration whether any Grants/ Donation will be received from MCA.

Ans – MCA is not providing any donation. It is Just a Regulator of all Private/Public Limited company. You have to raise donation/ Grants at your level. If you want to get donation from Government then you have to register under NGO Darpan (Niti Aayog Registration).

Q3- Whether Company Registered under Section 8 of Companies Act 2013 is eligible for getting registered under Section 11 & 12 of Income Tax Act 1961 and Section 80G of Income Tax Act, 1961?

Ans – Yes, Section 8 companies are registered with the object of Social Welfare Activities and they are eligible for registration under Section 11, 12 and 80 G of Income Tax Act, 1961.

Q4- Whether Section 8 Companies are required to do any compliance with MCA?

Ans – Yes, As per Section 8 (2) of Companies Act 2013, all companies registered under Section 8 shall enjoy all the privileges and be subject to all the obligations of Limited Companies.

Q5 – If a company registered under Section 8 defaults in complying with requirements of this Section, what will be the consequences of that defaults.

Ans – As per Section 8 (11) of Companies Act 2013, if a company defaults in compliances then, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than 10 Lakh Rupees but which may extend to Rs.1 Crore and the directors and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 3 Years or with fine which shall not be less than Rs.25000/- but which may extend to Rs.25 Lakh or with Both.

This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be uses as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience gained. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persist kindly intimate us to avoid such error for the benefits of others readers.

The Author can be reached at mail –shivsharma786@gmail.com and Mobile/Whatsapp – 9911303737 / 9716118384

Author Bio

Qualification: CA in Practice
Company: Shiv Kumar Sharma & Associates
Location: Delhi, New Delhi, IN
Member Since: 03 Dec 2018 | Total Posts: 45
My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. I have Qualified my B.Com (H) in 2010 And Cleared CS- Executive Exam in June 2013. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. View Full Profile

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