Formation of Company under Section-8 of Companies Act, 2013
1. A company is referred to as Section 8 Company when it is registered as:-
a) A Non-Profit Organization (NPO) i.e. when an object of the company is to promote arts, commerce, science, sports, education, research, social welfare, religion, charity, protection of the environment or any such other object;
b) intends to use its profits (if any) or other income for promoting these objectives.
c) The income of NPO cannot be used for paying out dividends to the company’s members and has to be for the promotion of charitable objectives.
2. An individual or an association of individuals are eligible to be registered as a Section 8 Company and obtain an incorporation certificate from the central government and are liable to adhere to the rules specified by the government. The Central Government may issue the license on such conditions as it deems fit, allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited”.
3. The company registered under section 8 of the companies act 2013 shall enjoy all the privileges and be subject to all the obligations of limited companies.
4. According to the rules, failure to comply with the responsibilities stated by the Central Government may lead to the winding up of the company on the orders of the government. Besides, strict legal action will be taken against all the members of the company if the objectives laid down by the company prove to be bogus.
5. To incorporate a Section 8 Company, a minimum of two directors are required.
6. Section 8 company incorporation has more benefits in comparison to trust and society. This type of company has more credibility among government departments, donors, and other stakeholders.
7. Section 8 company is managed by the Board of Directors as per the MOA and AOA of the company, unlike other trusts that are managed by the Trustees as per the Trust Deed.
Process of Incorporation of Section 8 Companies
- Submission of Name Reservation with objective of Company through Form Spice+ Part A.
- Submission of all documents after reservation of name within 20 days of Approval through Form Spice+ Part B.
Documents Requirement for the Registration of Section 8 Company
- ID Proof of Directors and members (Voter ID Card, Passport, Driving License)
- Address Proof of Directors and members (Bank Statement, Electricity Bill, Telephone/Mobile Bill)
- Contact Details of All Directors
- Object of company to be conducted in detail
- Aadhar Card of All Directors and members
- Pan Card of All Directors and members
- Address Proof of Registered Office i.e Any Utility Bill
- Rent Agreement of Registered Office in the name of Company, if rented.
- Director Identification Number, if registered
- Interest in any entity (Partnership, Company or Proprietorship Firm)
- Bank Details in which company’s account is proposed to open.
- Photograph of all the directors.
- Digital Signature of all the subscribers, if already have.
- The amount of money the shareholders are willing to invest in company after incorporation.
Annual Compliances of Section 8 Company
- Conduct a minimum of two board meetings in a year
- Maintenance of Books of Accounts
- Preparation of financial statements and mandatory audit of accounts by a practicing-chartered accountant.
- Income tax return filing
Filing of annual reports with the Ministry of corporate affairs in form AOC-4 and MGT-7.
To form a Company Under Section 8 you can contact School Support at 9644888899 or can take help of any CA at your local.