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Features of Section 8 Company
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Non-Profit Objective: Section 8 companies operate with non-profit objectives, focusing on promoting social welfare, education, charity, or other social causes.
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Registration under Companies Act: These companies are registered under Section 8 of the Companies Act, 2013, in India.
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No Dividend Distribution: Profits are reinvested into the company’s objectives and cannot be distributed as dividends to members or shareholders.
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Limited Liability: The liability of members is limited to the amount they have invested, similar to a private limited or public limited company.
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Charitable Purpose: The primary purpose is charitable, such as promoting education, health, social welfare, art, science, or environmental protection.
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No Minimum Share Capital Requirement: Section 8 companies can be formed without a minimum capital requirement, as capital can be adjusted based on needs.
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Tax Exemptions: They are eligible for various tax exemptions, such as under Sections 12AA and 80G of the Income Tax Act, subject to conditions.
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Donations and Grants: These companies are often funded through donations, grants, or government support instead of traditional commercial income.
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Separate Legal Entity: A Section 8 company is a distinct legal entity from its members, with the ability to own property, incur debt, and sue or be sued.
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Limited Ownership Rights: Members do not have ownership rights in the company; instead, they act as guardians to achieve the organization’s objectives.
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Perpetual Succession: A Section 8 company enjoys perpetual succession, meaning its existence is unaffected by changes in membership or leadership.
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Governed by Articles and Memorandum of Association: It is governed by its MOA (Memorandum of Association) and AOA (Articles of Association), which outline its objectives and operational rules.
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Directors: A Section 8 company must have at least two directors if registered as a private company and three if registered as a public company.
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No Suffix Requirement: Section 8 companies are not required to add “Limited” or “Private Limited” after their name.
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Compliance with ROC: They must comply with filings and regulations set by the Registrar of Companies (ROC), similar to other companies.
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Governance and Regulation: These companies are under the regulatory purview of the Ministry of Corporate Affairs (MCA) and are subject to periodic compliance audits.
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Transferability of Ownership: Unlike NGOs or trusts, ownership or membership can be transferred with prior consent and in compliance with the company’s articles.
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Annual Compliance: Section 8 companies must follow annual compliance requirements, including the filing of annual returns and financial statements.
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Foreign Contribution: Section 8 companies can receive foreign contributions, but they must comply with the Foreign Contribution Regulation Act (FCRA) regulations.
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No Membership Limit: There is no upper limit on the number of members in a Section 8 company, allowing flexibility for scaling membership in line with the company’s objectives.
Why Choose Private Limited Company
Advantages
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Due to their non-profit status, Section 8 companies are free from various income tax regulations. They take advantage of the advantages provided by Income Tax Act of 1961 Section 80 G. In comparison to other organizations, they are also required to pay less in stamp duty.
Disadvantages
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Revenue received by this organization may only be applied to the things listed above.
Who is Eligible?
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The minimum requirements for registration ensure that entities meet basic legal and operational standards before commencing business activities. Below are the criteria for the same:
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Minimum Shareholders: 2 Or More (Need at Least One) Those shareholders are going to either an individual or corporate entity
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Minimum Directors: Two directors have to be appointed, and one of them has Indian residency
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Authorised and Paid-Up Capital: There is no provision regarding minimum paid-up capital, but the authorised capital should be sufficient for meeting the needs of the company’s business at the state or union territory (regulatory requirement).
Document Required
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PAN (Permanent Account Number) of all proposed directors.
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Identity proof (Voter Id, Passport, Driving License, Aadhar Card) of all proposed Directors.
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Latest passport size Photographs of all directors.
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Address proof with Present address Mobile bill OR Telephone bill OR Electricity bill OR Bank Statement or Bank Passbook with latest Transaction page
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Email id and Mobile of all the Directors.
Step 1 :
Check the eligibility and documentation
Step 2 :
Request DSCs and DINs for each director
Step 3 :
Submit a request for a name reservation Form Spice+ for company incorporation
Step 4 :
Apply for PAN and TAN for your new business
Step 5 :
ROC issues an incorporation certificate with a PAN and TAN
Step 6 :
Open a bank account and start your business.
Steps in Registering a Private Limited Company
Why ComplyHub for Section 8 Registration
ComplyHub is an ideal choice for Section 8 company registration due to its expertise in handling the unique compliance requirements of charitable organizations. Their end-to-end support covers everything from document preparation to final registration, making the process smooth and hassle-free. With transparent pricing, ComplyHub offers cost-effective solutions tailored to fit your organization’s needs. Their experienced team not only ensures a quick and accurate registration process but also provides ongoing support to help you stay compliant with annual filings and regulatory changes. ComplyHub lets you focus on your mission while they handle the complexities.
Call us at : +91 98186 10979 Email us at : info@complyhubindia.com
