A Comprehensive Guide to Section 8 Company Registration in India
Are you passionate about making a positive impact on society? Establishing a Section 8 Company could be the ideal vehicle to fulfill your philanthropic aspirations while enjoying the benefits of corporate structure. In this guide, we'll delve into the intricacies of Section 8 Company Registration in India, exploring its significance, process, and benefits.
Understanding Section 8 Company Registration
A Section 8 Company, as per the Companies Act, 2013, is established for promoting charitable objectives such as education, art, science, commerce, social welfare, religion, environment conservation, or any other noble cause. Unlike other companies, Section 8 entities do not distribute dividends to its members; instead, profits are reinvested into the company to further its objectives.
Key Requirements for Section 8 Company Registration
Minimum Members: At least two individuals are required to form a Section 8 Company, while there's no upper limit on the number of members.
Minimum Directors: The company must have a minimum of two directors, and at least one of them should be an Indian resident.
Name Approval: Choosing a unique and indicative name is crucial. The proposed name should not resemble existing companies or violate any trademarks. Once selected, the name must be approved by the Registrar of Companies (ROC).
Memorandum of Association (MOA) and Articles of Association (AOA): Drafting MOA and AOA defining the company's objectives, rules, and regulations is mandatory.
Registered Office: A Section 8 Company must have a registered office address in India, which should be declared at the time of incorporation.
Step-by-Step Process of Section 8 Company Registration
Digital Signature Certificate (DSC): Obtaining DSC for all proposed directors is the initial step towards online registration.
Director Identification Number (DIN): Directors must apply for DIN, which is mandatory for all individuals intending to become directors of Indian companies.
Name Reservation: Application for name reservation must be filed with the ROC through Form INC-1. The proposed name is subject to availability and guidelines provided by the Ministry of Corporate Affairs (MCA).
Incorporation Application: Once the name is approved, applicants can proceed with filing the incorporation application through Form INC-32 along with the necessary documents including MOA, AOA, and consent of directors.
Certificate of Incorporation: Upon scrutiny of the application and documents, if found satisfactory, the ROC issues the Certificate of Incorporation, signifying the formation of the Section 8 Company.
Benefits of Section 8 Company Registration
Tax Exemptions: Section 8 Companies enjoy tax exemptions on income generated from charitable activities under Section 12AA and Section 80G of the Income Tax Act, 1961.
Limited Liability: Members and directors have limited liability, safeguarding their personal assets from the company's debts and obligations.
Credibility and Recognition: Section 8 Companies are esteemed for their philanthropic endeavors, enhancing their credibility and fostering trust among stakeholders.