How much fees is required for Section 8 Company Registration in India?

Nowadays, societal welfare is a major concern for all of us. There are only a few companies who are operating with a motive of society’s welfare. The government is providing certain privileges under Section 8 of Companies Act, 2013 (earlier it was Section 25 of Companies Act, 1956) to all those companies who are working as non-profit and charitable purposes. Therefore, with the Section 8 Company Registration in India, the owner can avail several benefits.

The registration for this company is pocket-friendly and it also doesn’t require any minimum paid-up capital. This blog helps you to know more about Section 8 Company and its required fee.

Section 8 of Companies Act, 2013

According to Section 8 of Companies Act, 2013, the Limited Company with an objective to promote art, commerce, science, education, environment protection, sports, religion, charity or any other thing for the welfare of the society can be incorporated under Section 8 of Companies Act. Earlier, it was Section 25 of Companies Act, 1956, where companies operate for non-profit and charitable purposes.

The main motive of Section 8 registered companies should be the welfare of the country instead of earning profits. As a result, profits earned by the company are not distributed among its members as dividends. The Central Government of India manages all Section 8 Companies operations under Ministry of Corporate Affairs (MCA).

It can be formed by a minimum of two directors and two shareholders whereas one person can act as both shareholder and director. There is also no minimum paid-up capital requirement to form under Section 8. Companies registered under this Section can enjoy all the benefits and obligations of Limited Company.

Why to register under Section 8 of Companies Act, 2013?

Benefits

• It is quite easy to form a company under Section 8 of Companies Act, 2013 as it operating for the welfare of the society.
• There is no minimum paid-up capital requirement to form a company.
• According to Section 12 AA, Section 8 registered companies can also enjoy several tax deduction benefits.  
• The applicant can obtain the Incorporation Certificate in 30 to 45 days but they obtain it early if in case the Regional Director approves it earlier.
• Section 8 of the Companies Act offers limited liability to all its members and shareholders.
• Section 8 registered companies enjoy greater flexibility as there are very few legal formalities and special exemptions and provisions offered by the government.
• These companies also have separate legal entities.
• Section 8 registered companies should have a minimum of two shareholders and a minimum of two directors. Both directors and shareholders can be the same person.
• Under Section 8 of the Companies Act,^[1] owners of the company can easily transfer their own which is difficult in other forms of company. So, to leave a company is quite simple as you can sell your shares or transfer ownership easily. 

Exemptions

• Companies registered under Section 8 are exempted from Stamp Duty registration.
• Section 8 companies can conduct a General Meeting with prior notice of a minimum of 14 days. It is 21 days in the case of other companies.
• Section 8 companies can conduct a meeting once in six months instead of four times a year.
• A firm can be a member of Section 8 Company.
• Public or Private limited companies can also register under Section 8 of the Companies Act after meeting up with certain compliance requirements.
• Even if the person is not a member of ICSI (Institute of Company Secretaries of India), he/she can appoint as CS (Company Secretary) for the company. Otherwise, there is no mandatory requirement to appoint CS.
• There is no need to pass the special resolution if the company is appointing a new Director. Other forms of companies have to pass the resolution for the appointment of a new director.
• There is no need to divide profits as dividends among the shareholders of the company.
• There is no need to record the minutes of the meetings. If there is an urgent need for the minutes, then, it can be prepared within 30 days from the conclusion of the meeting. 
• It is not required to form any kind of committees for the nomination to the board as it is the compulsion in other forms of companies.

Documents required for Section 8 Company Registration in India

• Identity proof of all Directors and Promoters (Self-attested copy of PAN Card)
• Address proof all Directors/Promoters (Driving License, Aadhar Card, Voter ID)
• Electricity/Utility Bill of the registered office
• Proof of registered office (Letter of Possession/Rent Agreement/Lease Agreement) 
• Passport-sized photograph of the Directors
• Memorandum of Association
• Articles of Association
• DIR-2, to act as Director
• If the Director holds the directorship of any other company, then Details of Director’s directorship
• INC-9, Declaration

Procedure for Section 8 Company Registration in India

Also, Read: Procedure for Section 8 Company Registration

Obtaining DSC and DIN

Firstly, the directors should obtain DIN (Directors Identification Number) after obtaining DSC (Digital Signature Certificate). DSC helps the directors in filing various e-forms for the formation of the company.

In some cases, directors are already issued with their DIN if they hold the directorship of other business entities.

Name approval through RUN

The second step is to obtain a name for the company. The name can be obtained by filing an application with the proposed name at the Ministry of Corporate Affairs. Through RUN (Reserve Unique Name), the applicant can enter two suggestions for the name and can also check the existing companies’ name in other sections.

Under Rule 8 (7), Companies Incorporation Rules, 2018, the companies should choose names ended with Foundations, Federations, Associations, Councils, etc which shows that they are working for the welfare of the society.

Filing up INC-12

In next step, applicants need to file E-Form INC-12. The form should be attached with the following:

• Article of Association
• INC-13, Memorandum of Association
• E- Form INC-14, Declaration by Professionals
• E- Form INC-14, Declaration by applicants
• Details of the next three years Income and Expenditure
• Proposed business plan

Filing up SPICe INC-32

After the approval of E-form INC-12, the applicant should file the SPICe INC-32 form with the entire basic documents requirement of directors and company as mentioned above.

The applicant need not file E-Forms INC-33 (MOA) and INC-34 (AOA) separately. They both should be attached with SPICe INC-32 form.

Incorporation Certificate

After filing up SPICe INC-32, the ROC will review and verify the application with all documents. If no discrepancy will be found by ROC, then they grant Certificate of Incorporation along with PAN and TAN, and, company’s name and unique CIN (Company’s Identification Number).

Fees for Section 8 Company Registration in India

Form	Amount (Rs.)
Reserve Unique Name (RUN)	1000
E-Form INC-12	2000
E-Form SPICe INC-32	The fee of this form depends upon the state in which the company is being incorporated and the authorized capital of the company. It is approx. 10% of the total authorized capital including the fees of MOA & AOA.

Conclusion

So, if you want your company to run its operations for the welfare of the society and for the country, then register your business entity under Section 8 of the Companies Act, 2013 to enjoy all the privileges offered by law. The registration process and the eligibility criteria to form up this company are quite simple and you can also convert your private, public limited or any other form of company to Section 8 Company by meeting up certain compliances. Even then, if you are not able to register your company u/s 8, then contact Swarit Advisors.

Also, Read: Income Tax Exemption through 12A Registration Online in India