Section 8 Companies

Section 8 of the Indian Companies Act 2013 permits to register companies with charitable motive with objective of  promotion  of commerce, art, science, social welfare, sports, research, religion, charity,  education, protection of environment or any similar  objective and they are not permitted  to make any profit.

A Section 8 Company  can carry on commercial activities and the surplus derived from such activities shall apply for promotion of its objects. They are not permitted to distribute its surplus to its shareholders in the form of dividend. Such companies are not required to keep the words Limited or Private Limited  as part of its  name.

Section 8 Companies  can be registered as private or public company depending the number of its shareholders .

 Incorporation of a  Section 8 company in India for Charitable purposes

 1. Form of company incorporation

        We can have two forms of  Section 8 companies in India

1. Public limited company where  maximum number of members can be unlimited and minimum number of  members  required is seven  ( 7  )

There should be at least three (3) directors and maximum is Fifteen (15 )

1. Private limited company where maximum number of members is Two Hundred ( 200 ) and minimum number of members required is two  ( 2 )

There should be at least two (2) directors and maximum is Fifteen (15)

2.Formalities in incorporation

Incorporation is doing at the  Central Processing Centre of Ministry of Corporate affairs at Gurgaon and will be under the  jurisdiction of  Registrar of Companies of the State where the registered office is situated.

Incorporation is comprised of  following   steps

A. Name Application and Approval

 For obtaining the desired name for the company to incorporate,  we have to apply to the ROC in specified form Spice+ and the processing may take 1 to 3 days and cost involved is  Rs. 1000/- subject to the availability of name.

B. Obtain Digital signature

    Since all the filing to the Registrar of companies is through on line, all the promoters should obtain a Class 3 Digital signature

C. Application for Central Government for issuing Licence under Section 8 for registering a company for charitable purpose

 Next step involved is preparation and submission of  application in eform INC 12 for obtaining the licence  under Section 8 for registering a company for charitable purpose

          The application form should be with

1. an 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;
2. Draft MOA and AOA
3. Declaration from directors and CA/CS stating MOA and AOA are in compliance with the Section

D. Submission of Composite Incorporation documents for obtaining Certificate of incorporation and  DIN

Next step involved is preparation and submission of  incorporation documents like memorandum of association and  articles of association online portal of the Ministry of Corporate affairs

The following documents are required for online submission

For Director/shareholder/Director cum shareholder

1. Dir 2- Consent to become the director of the Company ( only for director)
2. Pan Card Copy
3. ID proof like passport copy, Aadhar card, Driving Licence or Voters ID
4. Latest Address proof like mobile bill, telephone bill, electricity bill or bank statement. The proof should not be older than 2 months

For Registered office Address

1. for the Registered office address, NOC from the owner of the premise or rental agreement copy along with latest copy of Electricity bill or Water bill or utility bill or Property tax paid receipt  is also required to be filed along with incorporation documents

If foreign national is subscriber for company,   all the incorporation documents signed by him need to be attested by Public Notary and to be apostilled as per the Hague convention

The new directors will get DIN Number and  Certificate of incorporation will be issued  in 1 to 3 days. At the Completion of registration of the company, the Ministry will issue the Incorporation certificate along with PAN Card and Tan Number

Thus for incorporation of a company, it  may take 4 to 7  days from the date of submission of proper documents for  DIN Number . For obtaining the licence it may take 2-4 weeks

E. Submission of AGILE Form for obtaining GST Registration ESI, EPF Professional Tax and Bank account opening

 The Incorporation document comprise a mandatory online application form for applying for GST Registration ESI, EPF Professional Tax and Bank account opening.

GST registration is optional but other registrations are automatic. The applicant can select the Bank with whom they want to open their bank account in the Form Agile

 3. Post Incorporation Compliances

After the Company is registered the Company is required to  file INC form 20 A for  commencement of business and to exercise borrowing powers. The subscribers has to deposit the subscription amount before filing the said form.

4. What we do:

• Consulting  services to select the most suitable form of organization, based on the business needs and objectives.
• Incorporation of Section 8 Company, Drafting MOA and AOA as per the requirement.
• Getting  all the needed registrations, approvals and licenses for  the commencement of operations like PAN, TAN, &  GST  and other Registrations
• Registration as Startup  under Start Up India, an initiative of Department for Promotion of Industry and Internal Trade, Government of India
• Ensure  compliances with various corporate laws such as Companies Act, LLP Act and other Company Legislations   Foreign Exchange Management Act, Foreign Trade, Securities laws, Labour Laws and other  applicable laws.
• Getting the required approvals from Public bodies and Local authorities like Trade license, Shops and Establishment Registrations, Food license, Environmental Law approvals, MSME/UDYAM Registration with Ministry of  Micro, Small and Medium Enterprises (MSME) and SSI Registration

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