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    Section 8 Company

    Section 8 Company is a company registered for charitable purposes. Section 8 Companies are similar to Trusts and Associations. Section 8 companies are registered as either a public or private limited company.

    • Separate legal entity
    • Charitable Objects
    • Limited liability of members
    • Restriction on payment of Dividend
    • Needs to obtain License from Central Government

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    How it works?

    1.

    Learn about the service and get all-inclusive price

    2.

    Pay and submit documents online

    3.

    Our expert will do the requisite filings and get Certificate

    Overview

    Any person or an association of person can register a non-profit organization by forming a trust or society or a section 8 company.   Any person or association of person can register a company under section 8 of the Companies Act, 2013 as a limited company by obtaining a license and adhering the following conditions:  
    1. the objects of such company shall be promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
    2. the profits or any other income earned by such companies shall be applied in promoting its objects
    3. prohibition on payment of dividend to its members
    Though, Section 8 companies are registered as a public or private limited company, they have been exempted by the Central Government from use of the word “Limited” or “Private Limited” (as the case may be) in its name. The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.  

    Features

    • Separate Legal Entity

      As a juristic legal person, both the company and its members have separate legal identity that is distinct from each other.

    • Charitable objects

      Objects of section 8 company shall be promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object

    • Limited liability of members

      The liability of members of a Limited Company incorporated as section 8 Company is limited to the amount of share capital remaining unpaid on the shares held by them.

    • Restriction on payment of Dividend

      Section 8 Companies are restricted from payment of Dividend to its Members.

    • Needs to obtain License

      Section 8 Companies can function only after obtaining License from Central Government and the same can also be revoked by Central Government.

    Things to Know

    Unique Name

    The proposed name selected by you should be unique and should not resemble to the name of an existing company or Limited Liability Partnership. 

    Share Capital Share capital of a company is divided into four parts:

    1. Authorized Share Capital: It means such capital as is authorized by the Memorandum of a company to be the maximum amount of share capital that can be raised by a company.
    2. Issued Share Capital: It means such capital as the company issues from time to time for subscription
    3. .Subscribed Share Capital: It means such part of the capital which is for the time being subscribed by the members of a company.
    4. Paid-up Share Capital: It means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called.  There is no minimum paid-up share capital prescribed for a public/ private company. However, it is suggestible that the subscribers to the memorandum of association shall bring in some capital for carrying on the business operations of the company.
    Directors Director is a person appointed to the Board of a company. Board of Directors of a company are entitled to exercise all such powers and to do all such acts and things as the company is authorized to exercise and do except those which are specifically required to be exercised by a company in general meeting. Section 8 Company can be incorporated as Public/ Private Company and shall have such minimum number of Directors as applicable (two in case of private company and three in case of public company).  
    Subscriber Subscriber means a person who has agreed to subscribe to the share capital of the company and on its registration, whose name is entered as a member in the Register of Members. Minimum seven subscribers are required to incorporate a public limited company and two subscribers are required to incorporate a private limited company. Subscribers of a company can be resident in or outside India. There is no restriction on a subscriber (being an individual) of a public limited company to be a director of the same company or vice versa. Section 8 Company can be incorporated as Public/ Private Company and shall have such minimum subscribers as applicable.  
    Registered Office   It is mandatory for every company to have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. Registered office of the company must be situated in India.

    Process and Timelines

    Step 1.

    1-2 Days

    Obtaining requisite Documents and information

    Step 2.

    1-2 Days

    Obtaining DSC

    Step 3.

    1-2 Days

    Filing of Requisite forms with ROC

    Step 4.

    2-3 Days

    Certificate of Incorporation

    Document Required

      From Directors

    • Copy of PAN (in case of resident);
    • Copy of Passport (in case of non-resident);
    • Copy of proof of identity (Voters ID/ Passport/Driving License) ;
    • Copy of residential proof(Bank Statement/ Telephone Bill/ Mobile Bill/Gas Bill not older than two months);
    • Consent to act as directors*
    • Disclosure of interest in other entities*

      From Subscribers

    • Copy of PAN (in case of resident);
    • Copy of Passport (in case of non-resident);
    • Copy of proof of identity (Voters ID/Passport/ Driving License);
    • Copy of residential proof (Bank Statement/ Mobile Bill/Telephone Bill/ Gas Bill not older than two months);
    • Declaration in Form INC-15*

      From Company

    • Estimate of the future annual income and expenditure of the company for next three years specifying the sources of the income and the objects of the expenditure*
    • Copy of Sale deed/ Property Deed (in case of owned property) or Lease Deed (in case of rented premises)
    • Copy of latest Bank Statement/Telephone or Mobile/Electricity or Gas Bill of registered office (Any one, not older than 2 months)
    • No-objection Certificate from the owner from the owner of the premises for its use as registered office*
    • Memorandum of Association in Form INC 13 and Articles of Association*

    Note 1: In addition to the above documents, a declaration in Form INC 14 shall also be required

    Note 2: *Draft will be provided by our team

    Note 3: Following additional documents will be required in case the company to be incorporated is a subsidiary of another company: • Copy of resolution passed by the Parent company for incorporation of subsidiary company; • No-objection certificate from the parent company for using its name by the subsidiary company; • Certificate of Incorporation of the Parent company

    Why Companies Next

    At Companies Next, we have a dedicated team of professionals for providing quality services with accuracy and within given timelines. We provide a complete transparent and online platform for registration of your section 8 company.   Our section 8 company registration includes:

    • 1 DSC
    • 3 DIN
    • License under Section 8
    • Company Registration fees and stamp duty
    • Certificate of Incorporation
    • Company’s PAN and TAN
    • Company's EPFO and ESIC Registration
    • Professional Tax Registration (Maharashtra)
    • Opening of Bank Account
    • Drafting of Memorandum and Articles of Association
    • Drafting of requisite declaration(s), consent letters, etc.

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    FAQ's

    Section 8 company is a company registered under Section 8 of the Companies Act, 2013 read with allied Rules and has an objective of the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such similar object. Such companies can only apply its profits towards promotion of its objects and is prohibited from payment of dividend to its members.
    Central Government grants license to a Section 8 Company. The power of Central Government related to issuance of license to Section 8 Company has been delegated to the Registrar of Companies.
    The name of Section 8 Company must include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust and the like.
     
     
    Yes, a Section 8 Company can be converted into a company of any other kind subject to requisite approval.
    Once a license is issued to a Section 8 Company, it will be active and in-existence throughout the life of the Company unless revoked by the Central Government.
    No, you are not required to be present at our office or appear at any office for the incorporation of a Section 8 Company. All the documents can be scanned and sent through email and the original hard copy can be couriered to our office.
     
     
    Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued by Income Tax Department of India as a proof of identification for tax purposes. It is mandatory for obtaining Digital Signature Certificate, opening bank account, various statutory registrations, to pay taxes and filing tax returns and many other transactions as prescribed by government time to time.
    Yes, Foreign Direct Investment is allowed in a Section 8 Company. Foreign direct investment in India has mainly two entry routes- Automatic Route and Government Route. Automatic Route is the entry route through which investment by a person resident outside India does not require prior Reserve Bank approval or Government approval.

    Government Route is the entry route through which investment by a person resident outside India requires prior Government approval. Foreign investment received under this route shall be in accordance with the conditions stipulated by the Government in its approval.
     
    Yes, infusion of foreign capital in section 8 company would be considered as foreign contribution and will require prior permission under FCRA, 2010.
    A Section 8 company in formative stage is not eligible for registration. Such a company may apply for grant of prior permission under FCRA, 2010. Prior permission is granted for receipt of a specific amount from a specific donor for carrying out specific activities/projects. For this purpose, the association should meet following criteria:
    1. be registered under an existing statute like the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or section 25 of the Companies Act, 1956 (Now Section 8 of the Companies Act, 2013) etc;
    2. submit a specific commitment letter from the donor indicating the amount of foreign contribution and the purpose for which it is proposed to be given; and
    3. For Indian recipient organizations and foreign donor organizations having common members, FCRA Prior Permission shall be granted to the Indian recipient organizations subject to its satisfying the following:
    • The Chief Functionary of the recipient Indian organization should not be a part of the donor organization.
    • At least 75% of the office-bearers/ members of the Governing body of the Indian recipient organization should not be members/employees of the foreign donor organization.
    • In case of foreign donor organization being a single person/individual that person should not be the Chief Functionary or office bearer of the recipient Indian organization.
    • In case of a single foreign donor, at least 75% office bearers/members of the governing body of the recipient organization should not be the family members and close relatives of the donor.
    The minor shall not be appointed as director of the company. He needs to be over 18 years of age and must be a natural person. Foreign nationals are also eligible to be a director in a Section 8 Company provided that at least one of the director shall be resident of India.
    A Section 8 Company can alter its Memorandum and Articles of Association only with the previous approval of Central Government (power delegated to Regional Director)
    Yes. It is mandatory for all the new companies incorporated w.e.f 23rd February, 2020 to obtain EPFO and ESIC registration.
     
    Yes. All the new companies are required to apply for opening the company’s bank account through the Form AGILE PRO.
     
    No. Registration for Profession Tax  is mandatory only in respect of new companies incorporated in the State of Maharashtra w.e.f 23rd February 2020.
     
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