Section 8 Company Registration Made Easy

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Section 8 Company Registration Made Easy

Are you considering starting a company that supports a cause? This article explains everything you need to know about registering a Section 8 Company.

Non-profit objectives are the main reason for registering as a Section 8 Company. In addition to trade and commerce, charity, arts, education, religion, the environment, protection, social welfare, sports, and research are all included in the objective.

Section 8 Companies In India: What Are They?

A non-profit organization in India is usually registered with the Registrar of Societies as a society or as a section 8 company (non-profit company).

Section 8 companies should remember the following points:

A minimum of two directors is required
Furthermore, Section 8 companies do not require a minimum paid-up capital

A Section 8 Company's Profits

Profits from these companies are used to support the company's objectives
In addition, they are not distributed as dividends to shareholders

Section 8 vs. Section 25 Companies

Under the old Companies Act, 1956, a Section 8 Company was the same as a Section 25 Company. A new section 8 has been inserted into the Companies Act of 2013 in place of Section 25.

Section 8 Company Eligibility Criteria

In order to open a Section 8 Company in India, you need to remember the following points and meet the following criteria. In the same way, all criteria must be confirmed by the central government.

Science, commerce, education, art, sports, research, charity, social welfare, environment protection, and other similar causes should be promoted by your company
Additionally, all profits or income generated by your company after incorporation should be directed towards these purposes
There will be no dividends paid to your company's shareholders

Section 8 Company Registration Documents

Here are the documents you need to open a Section 8 company:

DIN (Director Identification Number)
DSC (Digital Signature Certificate)
MoA (Memorandum of Association)
Governing Articles
Passport-size photographs
Identity proof such as a passport, a voter ID, or an Aadhaar card
Details about the director
Verification of address
Details of the bank

Section 8 Company Incorporation Procedure

Here are the steps for section 8 company incorporation

The process of obtaining a director's digital signature

Like a private limited company, a Section 8 Company is governed by a board of directors. A DSC is obtained for each proposed director during incorporation. It is also necessary to submit the documents that are given below:

Card with PAN or Aadhar number.
A driver's license, passport, voter identification card, or government-issued identification card.

To obtain a DSC in the applicant's name, the applicant must also complete an OTP and eKYC procedure.

Company Name Approval under Section 8

An application for name approval to the MCA can be initiated simultaneously with the digital signature application process. You should also ensure that the company's name ends with a word such as foundation, forum, association, federation, chamber, council, or electoral trust.

A company can only be registered under a name that has been approved. Additionally, once the name has been approved, you can start the incorporation process within 30 days.

Articles of Association (AoA) and Memorandum of Association (MoA)

After obtaining the name approval, they are drafted. A company's Memorandum of Association (MOA) also defines its scope of activities. Another important document is the Articles of Association, which govern the internal management of the company.

Additionally, Section 8 Company MOAs must be in INC-13 format, while AOAs for Section 8 Companies do not have a prescribed format.