Section 8 Company is a Company that is licensed under Section 8 of the Companies Act, 2013 (the Act), erstwhile known as the Section 25 Company under the Companies Act, 1956, which had the main object; For promoting commerce, art, science, sports, education, research, social welfare, religion, charity, and the protection of the environment or any such other object, provided that the profits, if any, or the other income is applied for promoting only the objects of the company and Also, No dividend is paid to its members.
Therefore, Section 8 Company is a company which is registered for charitable or not-for-profit purposes. This Company is, however, similar to a Trust or Society; the exception is that a Section 8 Company is registered with the “Ministry of Corporate Affairs (MCA)”, Government of India whereas the Trusts and Societies are registered under the State Government regulations. This, however, has various advantages when it is compared to Trust or Society and it also has higher credibility amongst the donors, Government departments, and other stakeholders. Further, the key feature of this Company is that the name of the Company can be incorporated without using the word “Limited” or “Private Limited” as the case may be.
The Procedure for the Registration of Section 8 Company are:
- The businessman is firstly required to obtain the documents that are required and to arrange them. The documents that are required are:
Identity Proof: the Copy of the Permanent Account Number (PAN) of all the Directors/Promoters which is mandatory
- Address Proof: A Copy of a valid Passport/Driving Licence/Aadhar/Telephone Bill/Electricity Bill which is not older than 2 months
- A Latest passport size photographs of all the Directors/Promoters
- A Rent Agreement or a Leave & Licence Agreement, if the registered office premise is taken on rent
- The Utility Bills of the proposed registered office
- The Consent to act as a Director in Form DIR-2
- The Directors Directorship details in other Companies/LLPs, if any.
- The second step is to apply for the DSC which is required for filling the forms electronically to the Ministry of Corporate affairs which can be obtained from certified agencies.
- The businessman is then required to Obtain the Digital Signature Certificate (DSC) for the proposed Directors not having the Directors Identification Number (DIN). Obtaining the DIN from the Ministry of Corporate Affairs by filing Form DIR-3, if the businessman does not have DIN.
- the most important step is to apply for the name of the company which is a crucial step in company registration.
- The next step is to draft the Memorandum of Association and Articles of Association of the proposed company in Form INC – 13.
- The next step is to obtain the license under section 8 of new companies with a charitable objective. The person who is desirous to incorporate a Section 8 Company is required to file an application in form INC 12 along with the prescribed fees to register for a license.
- Certificate of incorporation – If after the filing of the requisite forms that is INC 7, INC 22 and DIR 12 for the incorporation with the registrar of the companies along with the prescribed fees, ROC gets satisfied with the contents of the documents that are filed. Thus after that, the company will issue Certificate of Incorporation in Form INC 16.
Thus, following these steps would help in registration of section 8 company.