Overview of Section 8 Company Registration.
A non-profit organization can be registered as a trust or a society and also as NPO Company under Section 8 of Companies Act, 2013. Section 8 Company has more benefits in comparison to trust and society. Section 8 Company is registered for the charitable purpose or for not for profit business. This type of Company has more credibility among donors, government departments and other stakeholders. NGO Registration is an offline process except the Section 8 Company Registration.
Purpose of Section 8 Company
Section 8 Company Registration is useful for the following purposes:
- For promoting arts, commerce, science, education, research, social welfare, religion, charity, for environment protection or for any other purpose related to social welfare.
- Provided that they apply their profits in promoting the object of the Company.
- It also prohibits the dividend payment to its members.
Its Registration is governed by the Ministry of Corporate Affairs whereas the Trust & Society Registration is governed by Registrar of state under the State Government.
For Section 8 Company, it is not required to use words 'LTD' or 'PVT LTD' in their name. With effect from June 5, 2015, under the Act, there is no such requirement regarding the minimum capital.
Documents required for Section 8 Company Registration/ NGO Registration
Documents to incorporate a Section 8 Company
- Identity proof of all the Directors - copy of PAN card (mandatory).
- Address proof – copy of Aadhaar/ Driving License/ Passport/ Telephone Bill/ Electricity Bill.
- Passport size photograph of all the Directors.
- Rent Agreement in case the Registered Office of the Company is on rent.
- Utility Bill of the Registered Office.
- Form DIR-2 which is consent to act as a Director.
- Director's interest in other entities.
Section 8 Company has to comply with the annual compliances like other Companies, in case of non-compliance, the Company will be treated as a dormant Company and it can be struck off from the register.
Procedure for Section 8 Company Registration in India
Here are the following steps required to incorporate a Section 8 Company:
First, obtain the Digital Signature Certificate (DSC) of all the Directors and Promoters of the Company in case they don't have the same. To obtain DSC, an Application is made to the certifying authority.
Obtain the Directors Identification Number (DIN) for all the Directors in the Company.
For name approval, an Application will be filed in Form INC-1 to the Registrar of the Company. Maximum six names can be provided for the name approval by the applicant. An approved name is valid for 60 days. It is required for Section 8 Company to include the words such as foundation, association, forum, council, chambers etc. in accordance with the Company as per incorporation rules 2014.
Draft MOA & AOA
After name approval, the next step is to draft MOA & AOA and now the time comes to file it to ROC in Form INC 12 with other documents for the License under Section 8 of the Companies Act, 2013. The MOA & AOA must be signed by the subscribers of the memorandum.
Application for License
Form INC 12 is filed with the ROC for the issuance of a License to the Section 8 Company under Companies Act, 2013.With the following attachments:
- INC 13 (Memorandum of Association).
- Article of Association.
- INC 15 (Declaration by subscribers of the MOA).
- Statement of Income & Expenditure.
- List of Directors of the Company.
- Subscriber page of MOA & AOA should be handwritten by subscriber and witness.
After approval of the Form, the License is issued in Form INC 16.
Incorporation Application is filed in Form INC 7 along with the following attachments:
- Memorandum of Association.
- Article of Association.
- Declaration by professional in Form INC 8.
- Affidavit by each subscriber of the Memorandum in Form INC 9.
- Address proof of the subscribers.
- Identity proof of subscribers.
- Specimen signature in Form INC 10.
- PAN card.
- NOC, if there is any change in the name of Promoters after name approval.
- Board Resolution authorizing to subscribe to MOA.
- Any other attachments, if any.
Form INC 22 is to be filed for the situation of the Registered Office of the Company along with the following attachments:
- Rent Agreement/ Lease Deed.
- Electricity Bill of not older than 2 months.
- NOC on the letterhead of the Promoter for using the premises.
Appointment of Directors
For the purpose of appointment of Directors, Form DIR 12 is required to be filed with the following attachment:
- Consent to act as a Director in Form DIR 2.
Certificate of Incorporation
After satisfying with the Forms filed with ROC, The Registrar shall issue the Certificate of Incorporation along with the unique Company Identification Number.
In case Company makes any default in complying with the provisions of this section, the Company shall be punishable with the fine which shall not be less than ten lakh rupees but which can be extended to rupees one crore. Moreover, the Directors and Officer in default shall be punishable with the imprisonment for a term which may extend to three years or fine which shall not be less than twenty-five thousand rupees and can be extended to twenty-five lakh rupees or both.
Frequently Asked Questions
As per Rule 3 of Companies (Incorporation) Rules, 2014, an (OPC) One Person Company is prohibited from being incorporated or convert into a Section 8 Company.
No, Section 8 Companies are exempted from the requirement to appoint an Independent Director and all the consequential provisions related to it under Section 149(1) of Companies Act, 2013.
A Section 8 Company is required to have at least one meeting within every six calendar months in regards to exemption notification read with Section 173(1).
Yes, the objects of a Section 8 Company can be altered by taking an approval from the shareholders and Registrar of Companies according to Section 8 Company terms.
Registrar of Companies along with the power of Central government issues the License to Section 8 Companies.