Company registration under Section 8
When a business is registered as a non-profit organisation (NPO), i.e., when it has the goal of promoting the arts, commerce, education, charity, protection of the environment, sports, science, research, social welfare, and religion, it is referred to as a ‘Section 8’ firm. An NPO’s money must be used to advance charity goals rather than to distribute dividends to the organization’s shareholders. These businesses are required to abide by the government’s standards and receive an incorporation certificate from the national government.
Qualities of Section 8 businesses
The following distinctive qualities that most other business kinds lack are present in Section 8 companies:
Charitable goal: Section 8 businesses do not aim to make a profit; instead, they have charitable objectives. They have only good intentions behind them. They work to further a variety of causes, including those related to sport, culture, research, and religion.
No minimum paid-up share capital is required for Section 8 corporations, in contrast to all other types of businesses.
Limited liability: The amount of liability that these corporations’ members may face is limited. Their liabilities cannot, in any case, be limitless.
Government licence: In order for these companies to operate, they must be granted a licence by the federal government. The government also has the authority to revoke this licence.
Privileges: The Companies Act grants these businesses a number of benefits and exemptions since they have charitable objectives.
Members may also be firms pursuant to Section 8, in addition to individuals and groups of individuals.
Establishing a Section 8 corporation
A individual or group of persons may submit an application to the Registrar of Companies with the required paperwork to create a charitable corporation in accordance with Section 8 of the Companies Act. The Central Government may accept such an application if it is satisfied with the terms and conditions set forth in the licence it has issued. The Registrar of Companies will register the company once it has been approved and the applicants have paid the necessary fees.
It’s important to remember that such firms can only be small-scale. All benefits and obligations of a limited company are applicable in this situation. These corporations are also exempt from the requirement that their names contain the words “Limited” or “Private Limited,” unlike all other corporations.
Application requirements for section 8 companies
A person or group of people are eligible to register as a Section 8 Company if they meet the criteria below. The objectives must be verified to the satisfaction of the entire government.
When a company wishes to advance science, industry, commerce, education, the arts, sports, research, belief, charity, social welfare, environmental preservation, or other objectives.
When the company plans to use all (if any) revenues or any money received after incorporation exclusively for the promotion of such causes if a company chooses not to distribute a dividend to its shareholders.
Documents Needed for Section 8 Company Registration
Director’s Identification number (If Available)
Passport Size Photographs
Digital Signature Certificate (If Available)
Articles of Association (If Drafted)
Memorandum of Association (If Drafted)
Members’ Id Proof Such as Aadhar Cards, Passports, and Director Voter ID
Evidence Of Address
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For the quotation of the above or for any other query you may contact the author at 9899595719 or acakunalchhabra@gmail.com
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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