Section 8 Company in Madurai

Section 8 Company Registration

A Section 8 Company is a non-profit organization dedicated to promoting charitable activities, arts, science, education, and sports. The profits of such companies are utilized to further these objectives and are not distributed among the members.

Taxless.in offers comprehensive services for registering Section 8 companies in India. Our expert team ensures a smooth and professional registration process for establishing your Section 8 Company. Contact us today for efficient Section 8 Company registration services.

Definition of Section 8 Company – Companies Act, 2013

As per the Companies Act 2013, a Section 8 company is an organization with the objective of promoting arts, commerce, science, research, education, sports, charity, social welfare, religion, environmental protection, or similar activities. These entities utilize their profits for mission fulfillment and do not distribute dividends to their shareholders.

Overview of Section 8 Company Registration

A Section 8 Company, under the provisions of the Companies Act 2013, is formed to promote non-profit activities such as education, social welfare, environmental preservation, arts, sports, charity, and more. Essential aspects of Section 8 Company registration include:

• Minimum Directors: A minimum of two directors is required.
• Capital Requirement: No minimum capital requirement for incorporation.
• Non-Profit Objectives: Objects include trade, arts, commerce, education, charity, environmental protection, sports research, and social welfare.
• Compliance: Must comply with the Companies Act 2013, maintain accounts, file returns with ROCs, and adhere to GST and IT Act.

Benefits of Opening a Section 8 Company in India

Incorporating a Section 8 company offers several advantages:

1. Tax Exemption: Section 8 companies registered under section 12AA of the Income Tax Act enjoy 100% tax exemption.

2. No Minimum Capital Requirement: Section 8 entities are flexible in structuring their capital without a minimum requirement.

3. Separate Legal Entity: Section 8 companies have a distinct legal identity, providing credibility and autonomy.

4. Increased Credibility: Strict legal compliance enhances credibility, making Section 8 entities more trustworthy.

5. No Title Required: Section 8 companies have the freedom to choose a name without the mandatory affixation of "Section 8."

Eligibility Criteria for Incorporation of the Section 8 Company

To establish a Section 8 company, specific eligibility criteria must be met:

1. Indian National or HUF: An Indian national or Hindu Undivided Family (HUF) can incorporate a Section 8 Company.

2. Minimum Directors: At least one director is required.

3. Objectives: Objectives should align with promoting art and science, sports, charitable activities, education, or providing financial assistance to lower-income groups.

Mandatory Legal Requirements for Section 8 Company

Before applying for Section 8 company incorporation, certain legal requisites must be fulfilled:

1. Number of Directors: A minimum of two directors for a private limited company; three for a public limited company.

2. Number of Members: Capped at 200 for private limited companies; no limit for public limited companies.

3. Capital Requirement and Name: No minimum paid-up capital; no mandatory affixation of "private limited" or "limited" in the name.

4. Company Objects: Non-profit objectives explicitly stated in the Memorandum of Association.

Documents Required for Section 8 Company Incorporation

Documents needed for Section 8 company incorporation include:

1. Articles of Association (AOA) and Memorandum of Association (MOA)

2. Declaration by the first director(s) and subscriber(s)

3. Proof of office address

4. Certificate of incorporation of an overseas corporate body (if any)

5. Resolution passed by the promoter company

6. Consent of Nominee (INC-3)

7. Residential and identity proof of nominees and subscribers

8. Applicant's identity and residential proof

9. Digital Signature Certificate (DSC)

10. Declaration of unregistered companies

Section 8 Company Incorporation Process

The process involves the following steps:

1. Obtain Digital Signature Certificate (DSC): DSC for proposed directors.

2. Obtain Director Identification Number (DIN): Apply for DIN for proposed directors.

3. Reserve the Company Name: Unique name approval through Form INC-1.

4. File the Application for Incorporation: Use Form INC-32 along with MOA and AOA.

5. Obtain a License: Apply for a license using Form INC-12.

6. Obtain a Certificate of Incorporation: The MCA issues the Certificate of Incorporation through Form INC-16.

Connect with Taxless.in for Section 8 Company Registration

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Donations/Funding of Section 8 Company

• A Section 8 Company cannot collect capital through deposits but can accept donations.

• Foreign contributions require FCRA registration.

• Equity funding involves releasing new equity shares at a premium.

Ensure a comprehensive system to prevent money laundering.

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Section 8 Company FAQ's

1. What is a Section 8 company?

   • A Section 8 company is a non-profit organization established to promote art, science, commerce, charity, sports, education, research, or any other beneficial activity. It operates for the benefit of a specific community or purpose and is exempted from certain provisions of the Companies Act, 2013.

2. Can a Section 8 company make a profit?

   • Yes, Section 8 companies can generate a profit. They are allowed to earn income through subsidies, investments, donations, funding, etc. However, these profits must be used for the company's mission and not for the benefit of its members.

3. What is the difference between an NGO and a Section 8 company?

   • An NGO is an independently operated organization with charitable, educational, religious, or social purposes, usually non-profit. A Section 8 Company is a non-profit entity formed to promote various objectives. While NGOs don't have a profit motive, Section 8 companies can generate profit but must use it for their defined goals.

4. Do I have to be present in-person to incorporate a Section 8 Company?

   • No, physical presence is not required. All documents can be scanned and sent via email. Some documents may need to be couriered to the office.

5. What documents are required for registration?

   • Identity and address proof for proposed Directors, PAN Card for Indian Nationals, No Objection Certificate from the office premises landlord, along with their identity and address proof.

6. How long does it take to incorporate a Section 8 Company?

   • Taxless.in can complete the process in 20-30 days, depending on document submission and government approval speed.

7. How long is the registration of the Company valid?

   • Once incorporated, a Section 8 Company remains active as long as annual compliances are met. Failure to comply may lead to the company becoming dormant and, eventually, being struck off.

8. What is a Digital Signature Certificate?

   • A Digital Signature establishes the sender's identity electronically when filing documents online. It is mandatory for all Directors of a Section 8 Company as per the Ministry of Corporate Affairs (MCA).

9. What is the Director Identification Number?

   • Director Identification Number (DIN) is a unique identification number assigned to all existing and proposed Directors. It is mandatory for all Directors and does not expire.

10. Can NRIs/Foreign Nationals be a Director in a Section 8 Company?

    • Yes, NRIs or Foreign Nationals can be Directors in a Section 8 Company after obtaining a Director Identification Number. However, at least one Director must be a Resident Indian.

11. How many people are required to register a Private Limited Company?

    • A minimum of two people is required to register a Section 8 company in India.

12. What are the requirements to be a Director?

    • The Director must be over 18 years old and a natural person. There are no limitations based on citizenship or residency.

13. Is a Physical Office Mandatory to Establish a Section 8 Company?

    • While a formal office space is not mandatory, a registered address within India is essential for the Section 8 Company, serving as the official communication point with the MCA.