As per the Companies Act, 2013, section 8 companies are established for the promotion of sports, education, science, art, commerce, social welfare, or any other charitable purposes in India, and these companies are registered under the Ministry of Corporate Affairs (MCA), Government of India. After the completion of the registration process, Section 8 companies can work anywhere in India, and also the process of Section 8 Company registration is very easy as compared to Societies and Trust registration. In the blog, we are discussing the process of Section 8 Company Registration in India.
Benefits of Section 8 Company Registration
Below is the list of all the advantages you can avail after the registration process is successfully completed:
Tax Benefits
There are many tax benefits in the Section 8 Company Registration in India.
Exemption from Stamp Duty
There is no requirement of paying stamp duty on the incorporation of Section 8 Company as it is facing the instalment of stamp duty on the AOA and MOA of the Private Limited Business.
Separate Legal Identity
The certification of Section 8 Company has a separate legal entity.
No Least Capital
In India, there is no minimum capital needed for a Section 8 Company registration.
More Credibility
This Company has more credibility than any other form of a charitable organization in India.
Exemption to the Donators
The exclusion is awarded to the donators if the Section 8 Company is registered under Section 80G.
Eligibility criteria for Section 8 Company Registration
You can check the eligibility criteria before the Section 8 company registration, as mentioned below:
A Hindu Undivided Family or a person or a limited company is eligible to start a Section 8 company registration in India.
Two or more persons who are shareholders or directors of the company can fulfil all the conditions of the registration.
All the shareholders and directors of the company must have their valid Digital Signature Certificate (DSC) and Director's Identification Number (DIN).
The company should have an outline plan for the next three years.
Any member of the company cannot withdraw any compensation in the form of cash or kind.
It is the mandatory yearly filing of accounts and the returns of the organization with the ROC to meet the required compliance.
The company can be sold as per the rules and regulations mentioned under the Companies Act, and the ownership of the property lies in the Company's name.
The intension of the registration should be the promotion of social welfare, sports, science & art, education, and financial support to the lower-income societies in India.
Minimum one director of the company shall be an Indian citizen.
Essential documents required for Section 8 Company Registration
Below mentioned are all the necessary documents required for registration:
Digital Signature Certificate (DSC) and Director’s Identification Number (DIN) of the directors.
Aadhar card/Voter ID card/Passport/Driving License of all the members.
PAN card of all the members.
Submit the latest bank statement of all the members and the company.
Latest passport size photos of all the members.
Submit a copy of the rental agreement.
The procedure of Section 8 Company Registration
Before the registration, you must double-check all the documents required for the registration. Following are the steps mentioned to complete Section 8 Company Registration:
Step 1: Applying for Name through SPICe+ Form
You can apply or search the name though SPICe+ Form and Section 8 Company must have words like Federation, Council, Electoral Trust, Foundation, Forum, Chambers, etc. in its name.
Step 2: Obtain MOA and AOA
Memorandum of Association (MOA) is like a charter of the company; it defines the scope of the company's activity. In contrast, an Article of Association (AOA) tells about the internal management system of the company.
An applicant can use INC-13 to file MOA of a company, and there is no proper format prescribed for filing AOA of a Section 8 company.
Each member must sign the AOA and MOA who shall also need to mention their name, address, occupation, etc. and a minimum of one witness is required who will affirm the signature and witness also has to mention his/her name, address, designation, and description.
Step 3: Filing of SPICe+ Form
After obtaining approval from the Central Government, the applicant can file the SPICe+ form. The following are the attachments of the SPICe+ form:
Memorandum of Association (MOA) in INC-13 Form.
Article of Association (AOA) (No specified format).
Declaration of consent by the director in the DIR-2 form.
Affidavit by the subscriber and director in the INC-9 form.
PAN card of subscriber and director.
Aadhar card of director and subscriber.
Any proof of registered office such as agreement of lease, rental agreement or sale deed, etc.
Latest electricity bill, water bill, telephone bill, etc. of the registered office.
No Objection Certificate (NOC) from the owner of the registered office (in case if the registered office is rented).
The license is issued in the INC-16 form.
Note: E-MOA and E-AOA cannot be used for Section 8 Company. Companies are compulsorily required to file AOA and MOA in PDF format in SPICe-32.
Annual Compliances for Section 8 Company under the Companies Act, 2013
The following are the annual compliances of Section 8 Company:
Maintenance of Books accounts.
Mandatory Audit.
Filing Income Tax Return.
Preparation of Financial Statements.
Conduct a minimum of two board meetings in a year.
Filing financial statements in form AOC 4.
Filed an annual return every year with other e-filing forms like MGT 7.
Additional compliance with fulfilling the registration like 12A, 80G, etc.
Conclusion
It is important to get registered as a Section 8 Company under the Companies Act, 2013; the main purpose of section 8 companies is to work for the welfare of the society, and it operates for the charitable objective; that is why it has got many exemptions in tax and others. These companies are established for the promotion of sports, education, science, art, commerce, social welfare, charity, or any other charitable organization in India.