Section 8 Companies are those companies through which we work as a charitable organization or Non-Profit Organisation (NPO). The motives of such are social welfare rather than making profits.
In other words, Section 8 Companies works as a charitable trust under the recognition of the Ministry of Corporate Affairs. These companies are registered under the Companies Act 2013.
Advantages of a Sec 8 Company
- No minimum capital requirement
- Donations to a Sec 8 company are easily rebated under 80 G
- Exemptions under company law like Companies auditor is not applicable. Stamp duty registrations are also exempted.
- A Sec 8 Company can convert to a standard Pvt Ltd Company through a process defined in the Act.
Minimum two Directors are required in case you are registering a Private Limited type of Sec 8 company. If you are registering a Limited company type for Sec 8 Company, then a minimum of three Directors are required.
The money earned by a section 8 company can be utilized in charitable projects only. None of the money earned can be moved toward paying the partners of a section 8 company.
Requirements for forming a Sec 8 Company
- Digital Signature of Directors
- DIN ( Director Identification Number )
- Name Availability Check and Application for Name Reservation/Approval
- Office Address Proof of the company is needed
- If the applicant is NRI, then the documents must be notarized, and the passport is compulsory
- Make Application to the focal government for the award of License under section 8 and get the License
- Record Incorporation application for getting Registration Certificate
- The administrative expense of Section 8 Company Registration is INR 6,000/ -
- NGO MOA & AOA
- RD Approval
- NPO CIN
- PAN & TAN
- Bank Account with a Naionliased bank