Easy Section 8 Company Registration Online Process

Section 8 Company Registration In the realm of corporate entities, a Section 8 company holds a unique status, often associated with philanthropy and social impact. Formed under Section 8 of the Companies Act, 2013, these entities operate as non-profit organisations with a primary objective of promoting social welfare, charity, education, science, art, and more. Let’s delve deeper into the intricacies of Section 8 company registration, requirements, benefits, and annual compliances.

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What is a Section 8 Company?

A Section 8 company, also known as a not-for-profit organisation, is established to pursue charitable or social objectives without the intention of earning profits for its members. Instead, any surplus generated is ploughed back into furthering the company’s objectives. This unique structure allows Section 8 companies to focus on making a positive impact on society while enjoying certain privileges and exemptions provided by law.

Documents Required for Section 8 Company Registration?

To initiate the registration process for a Section 8 company, the following documents are typically required:

1.Memorandum of Association (MOA) detailing the company’s objectives.
2.Articles of Association (AOA) governing the internal operations and management structure.
3.Declaration by promoters and directors affirming compliance with Section 8 requirements.
4.Identity and address proof of directors and shareholders ,Address proof of the registered office.
5.No Objection Certificate (NOC) from the landlord if the registered office premises are rented or leased.
6.Utility bills of the registered office.
7.PAN card and Aadhaar card of directors.
8.Form INC-12 (application for grant of a licence under Section 8).

The Process for Registering a Section 8 Company: Section 8 Company Registration

The registration process for a Section 8 company involves several steps:

Obtain Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for directors.
Reserve a unique name for the company through the RUN (Reserve Unique Name) service.
Draft the MOA and AOA in compliance with Section 8 requirements.
File Form INC-12 along with the necessary documents for obtaining a licence under Section 8.
Upon approval, file incorporation documents (MOA, AOA, etc.) in Form INC-32 along with Form INC-22 for the registered office address.
Following scrutiny and approval, the Registrar of Companies (ROC) issues a Certificate of Incorporation.

The Requirements and Compliances for Section 8 Company Registration:

Section 8 companies must adhere to certain requirements and compliances, including:

1.Minimum of two directors and shareholders.
2.Appointment of an auditor and conducting annual audits.
3.Holding of annual general meetings and filing of annual financial statements and reports with the ROC.
4.Timely updating of any changes in the company’s details or management with the ROC.

The Fees for Section 8 Company:

The fees for registering a Section 8 company vary based on factors such as authorised capital and professional fees for consultants. It typically includes government fees, professional charges, and miscellaneous expenses.

The benefits of registering a Section 8 company include:

No Minimum Capital Requirement: Unlike other types of companies, Section 8 companies do not have a minimum capital requirement for registration. This makes it easier for entrepreneurs to establish these entities without the need for significant initial investments.
Tax Benefits: Section 8 companies are eligible for various tax benefits under the provisions of the Income Tax Act. These benefits include exemptions on income generated for charitable purposes, donations received, and tax deductions for donors under specific sections of the Act.
No Stamp Duty: Unlike private limited companies, there is no stamp duty imposed on the incorporation of a Section 8 company in India. This reduces the financial burden on founders and makes the registration process more cost-effective.
Separate Legal Identity: Section 8 companies enjoy a distinct legal entity separate from their members. This means that the company can enter into contracts, own property, and sue or be sued in its own name, providing limited liability protection to its members.
Credibility: Due to their strict compliance requirements, including mandatory annual audits, Section 8 companies enjoy higher credibility compared to other forms of charitable organisations. This instils trust and confidence among stakeholders, including donors, investors, and the general public.
Exemption for Donors: If a Section 8 company is registered under Section 80G of the Income Tax Act, donors can avail tax exemption benefits. This encourages individuals and organisations to contribute to the company’s charitable activities, facilitating fundraising efforts and furthering the company’s social impact initiatives.

Annual Compliances for the Section 8 Company:

Annual compliances for a Section 8 company include:

a. Filing of annual financial statements (Form AOC-4).
b. Filing of annual returns (Form MGT-7).
c. Holding of annual general meetings.
d. Appointment and rotation of auditors.
Minimum of Two Board Meetings: Section 8 companies are mandated to conduct a minimum of two board meetings in a year. These meetings serve as crucial platforms for decision-making and strategic planning.
Maintenance of Books of Accounts: Section 8 Company Registration Proper books of accounts must be meticulously maintained by Section 8 companies. This includes recording all financial transactions, assets, liabilities, and income and expenditure accurately and transparently.
Preparation of Financial Statements: Section 8 Company Registration are required to prepare annual financial statements, which typically include the balance sheet, profit and loss (P&L) account, and cash flow statement. These statements offer valuable insights into the financial well-being and performance of the company.
Mandatory Audit: Section 8 Company Registration An annual audit of the company’s financial statements by a qualified auditor is mandatory. The audit ensures compliance with accounting standards and provides assurance regarding the accuracy and reliability of the financial information presented.
Annual General Meeting (AGM): Section 8 Company Registration must convene an annual general body meeting at least once a year, within six months from the end of the financial year. The AGM provides an opportunity for shareholders to discuss company matters and receive updates on its performance.
Income Tax Return Filing: Section 8 Company Registration are required to file their income tax returns (ITR) annually with the tax authorities. This involves reporting the company’s income, claiming applicable exemptions or deductions, and ensuring compliance with tax regulations.
Filing of Financial Statements: Section 8 Company Registration need to file their financial statements, including the balance sheet and profit and loss (P&L) account, with the Registrar of Companies (ROC). This filing is done using Form AOC-4 and helps maintain transparency and accountability.
Annual Return: Section 8 Company Registration An annual return in Form MGT-7 must be filed every year, providing comprehensive information about the company’s directors, shareholders, and other key details. This filing ensures compliance with statutory requirements and facilitates transparency in corporate governance.
Additional Compliances: Section 8 Company Registration may have additional compliances based on specific registrations or certifications obtained. For example, obtaining 12AA registration for tax exemption or 80G registration for tax benefits to donors may require fulfilling additional compliance requirements.

In essence, establishing a Section 8 company presents a meaningful opportunity to contribute to society while enjoying certain legal benefits and privileges. By navigating the registration process and fulfilling ongoing compliances diligently, Section 8 companies can effectively pursue their altruistic objectives and make a lasting impact on the community.

SOURCES: https://cleartax.in/s/ngo-registration-india-procedure

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