Benefits of Section 8 Company Registration
Tax Exemption & Other benefits
A Charitable Organization with its registration under Section 8 of Companies Act 2013, it obtains a special status – distinct from other types of business entities. Being a charitable Organization, Section 8 company can receive donation from any parties/companies. A section 8 company not only enjoys tax exemptions, but also the donors can claim an exemption for the donation made (under Income Tax). Apart from the tax exemptions the company is also exempted from the applicability of many compliances and related provisions.
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Separate Legal Identity
A section 8 company like any other registered companies has a separate legal identity apart from its members, which allows the organization to hold assets and liabilities in its own name. The change in members or the Directors neither affects its existence or the assets & liabilities or rights & obligations.
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Limited Liability of Members
A Charity organization registered under Section 8 of Companies Act 2013 ensures limited liability to its member. The liability of the members are limited only to the extent of the capital subscribed and unpaid. The losses and obligations of a Section 8 company do not create a charge over personal assets of its members or directors, which helps the promoters to freely run the nonprofit organization.
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No Corporate Title
Even though the Section 8 Company enjoys the benefits of the corporate entities, it is not labeled as a corporate entity, there for it does not have to suffix any terms like ‘Private Limited’ or ‘Limited’ after its name. This exemption is provided for draw attention of third parties and other companies to the company’s purpose and not its status assuming it is profit making organization.
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Documents Required for Registration of a Section 8 (Charitable) company
- PAN Card PAN Card of all Members and Directors
- Passport Foreign Nationals must provide a valid passport.
- Photograph Latest Passport size photographs of all Members and Directors
- Identity Proof Voters ID/ Passport / Driving License of all Members and Directors
- Address Proof Telephone Bill / Electricity Bill / Latest Bank Account Statement of Members and Directors
- Business Address Proof Electricity Bill / Telephone Bill of the registered office address in India.
- No Objection Certificate NOC obtained from the Owner/s of registered office.
- Rental agreement Rental Agreement of the office if it is rented
- Statement of Income and Expenditure Estimated statement of Income and Expenditure for the next three years
Formulation of Section 8 Company Name
Build a Unique Identity
Identification plays an important role in making a business outstand in competitive market, build a unique and distinctive name for your business hence enhance your brand’s trust and value. Consumers should identify activity of your business from the brand name so that they can relate your business with its offerings.
Even though it meets all the above criteria, once again make sure that the brand name to be short, easy to remember and simple to pronounce or spell.
Suffix
The name of a section 8 company must include suffix like Foundation, Forum, Federation, Chambers, Association, Council etc.
Constitution Type
Name of the Section 8 Company does not required to add a suffix like ‘Private Limited’ or ‘Limited’
Register Online
Register your Section 8 Company in 3 Easy Steps
- Fill up the registration form
Select the package suits your requirement
Fill up the form which will take less than 10 minutes
Make Payment through secure payment gateway.
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Provide Details and upload documents required for Section 8 company registration
Procurement of DSC (Digital Signature)
Application for Name Reservation
Documents Drafting including MOA and AOA
Application for Registration under Section 8
Certificate of Incorporation
- Your Section 8 Company is Registered
All it takes 25 to 28 working days*
*Subjected to Government Processing Time.
The Process of Registering a Section 8 Company
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Day 1 – 2
Collection of Information
Collection of required documents (Scanned copies)
Review of documents and information provided
Application for Digital Signature (DSC)
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Day 3 – 6
Checking Name Availability
Application for Name Reservation under ‘RUN’
Reservation of Name
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Day 7 – 10
Drafting of MoA, AoA and other essential documents
Review and confirmation from Members and Directors
Notarization of Required Documents
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Day 11 – 17
Application to grant license in form INC – 12
Government processing time for approval
License under section 8 in form INC – 16
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Day 18 – 20
Filing application for Section 8 Company registration
Application for DIN allotment
Application for PAN and TAN of the company
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Day 21 – 28
Government Processing Time
Certificate of Incorporation of Section 8 Company*
*Subjected to Government Processing Time
Enquiry
FAQ
What is Directors Identification Number (DIN)?
Directors Identification Number (DIN) is an identification number issued by the Ministry of Corporate Affairs, Government of India, to Directors of a company or Designated Partners of an LLP.
How to Obtain a DIN?
New DIN will be allotted to a Director / Designated Partner while registering a Company or LLP. Also, a Company / LLP can apply for a DIN for a proposed Director / Designated Partner.
Who can become a Shareholder / Director in a Company?
Shareholders could be Individuals, Companies or LLPs, but only individuals can become directors of the company.
What is Memorandum of Association (MOA)?
MOA is the charter document of a company. A company is created by registering a memorandum. MOA contains the name of a company, the state in which the registered office of the company is located, objectives, and its authorized capital. The MOA will be subscribed by the initial promoters of the company in their own handwriting. They will also have to write their name, father’s name, residential address, occupation and the number of shares they agree to subscribe in the company. The MOA should also bear the signature of the witness who knows the subscribers.
What is Articles of Association (AOA)?
AOA contains rules and regulations for the management of a company’s internal affairs and conduct of its business. It defines the relationship of company between its members and directors and relation between members and directors. It also describes powers of directors. Further, the AOA describes the rights and duties of its members as well as the duties and responsibilities of its directors. In case of a private limited company, the AOA will contain the restrictions of transfer of shares, if any. Also, AOA usually contains the names of first directors of a company. The AOA will be subscribed by the initial promoters of the company in their own handwriting. Promoters will have to write their names, father’s name, residential address, and occupation. The AOA should also bear the signature of the witness who knows the subscribers.
What is Authorized Capital and Paid-up Capital?
Authorized capital shows the maximum amount of capital that a company can raise by way of issue of shares at present or in the future. Whereas, the Paid-up Capital refers to the actual amount raised by a company i.e.; amount paid by the shareholders on the issuance of shares. One can register a company in India by any amount of paid-up capital which can be less or equal to the authorized capital but not exceeding the authorized capital.
Is Name of Section 8 Company end with Limited?
No, section 8 company name need not end with ‘Limited’ or ‘Private Limited’ as last world. This is an exemption given by companies act to section 8 companies as such type of company is formed for charitable or non profit motive business.