Introduction

Section 8 Company Registration establishes a formal structure for nonprofit organizations to establish credibility, gain a legal status, and access many legal benefits. This blog outlines every important detail about the entire process for you.

The formation of a Non-Profit Company India needs strong legal framework, and the Section 8 Company Registration process under the Companies Act, 2013 is the best and the most authentic means to start a Non-Profit Organization. In contrast to Trusts or Societies, a Section 8 Company is registered with the Ministry of Corporate Affairs (MCA) and this offers more transparency, separate legal entity and more trust among donors and government agencies. This structure is ideal for organizations that are focused on social impact.

What is a Section 8 Company?

Section 8 Company is a type of Non-Government Organization (NGO) and is established for non-profit objectives. These objectives may include the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, environmental protection etc.

The unique feature of the Non-Profit Company India is that any profit made has to go back to its charitable purposes, and cannot be given out as dividends to its members. Because of this charitable nature, these companies are exempt from adding suffixes like “Limited” or “Private Limited” in their name. The Section 8 Company Registration is a common option for NGO Registration India.

Eligibility & Benefits

For Section 8 Company Registration, there are a few requirements which are to be met and in return the organization earns important benefits.

Eligibility Criteria

Applicants: An individual, a Hindu Undivided Family (HUF), or a business that is already running can register as a Section 8 Company.
Directors: For a private limited structure, there must be at least two directors and for a public limited structure, there must be at least three directors. Also, at least one of the directors must be a resident in India.
Objectives: Company’s primary objective has to be charitable and non-profit.

Key Benefits

Tax Exemptions: Tax benefits are available to them under Sections 12A and 80G of the Income Tax Act, 1961.
No Minimum Capital: There is no prescribed minimum paid-up capital requirement, which is a great benefit in the way that companies have more operational flexibility.
Stamp Duty Exemption: Section 8 Company Registration is exempted from stamp duty for documents like MOA and AOA which are part of incorporation.
Separate Legal Entity: It has a unique legal identity that is distinct from its members and enjoys perpetual succession.
Enhanced Credibility: Registration under the Companies Act is more credible than other types of charitable organizations. This is one of the biggest advantages of the Section 8 Company Registration process.

Documents Required

To have a smooth Section 8 Company Registration, the following documents should be ready:

● Directors and Shareholders:

○ PAN Card.

○ Identity and Address Proof (Aadhaar Card, Passport, Voter ID, Driver's License).

○ Utility bill or bank statement (not older than two months).

○ Passport-sized photographs.

● Registered Office:

○ Address proof with a recent utility bill (electricity and water).

○ If the premises are rented, a No-Objection Certificate (NOC) from the owner and the rental agreement is needed.

● Other Important Documents:

○ Digital Signature Certificates (DSC) for all proposed directors.

○ Memorandum of Association (MOA) and Articles of Association (AOA).

Process for Section 8 Company Registration

Procedure for Non-Profit Company India Registration is done fully online via the MCA portal.

1. Obtain DSC and DIN: The first step is obtaining a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) for every proposed director.

2. Reserve Company Name: The next step is to apply for name reservation. This is done through the SPICe+ Part A form on the MCA portal. The name must be unique and should reflect the company’s objectives.

3. File for License and Incorporation: After the name is approved, you can file Form INC-12 to get your license to operate as a Section 8 company. After that, file the SPICe+ Part B along with the MOA, AOA, and other necessary documents for incorporation.

4. Receive Certificate of Incorporation: Once the Registrar of Companies (ROC) verifies all the documents, you will be issued the Certificate of Incorporation which includes your Corporate Identification Number (CIN), PAN, and TAN. That’s when you will be done with the NGO Registration India process.

How Lawfinity Helps

Navigating the intricacies of Section 8 Company Registration can be a daunting task. At Lawfinity, our dedicated team of legal professionals make it easy for you. We take care of everything from obtaining DSC's, drafting documents and filing the required forms with the MCA. Lawfinity will ensure that your Non-Profit Company India is registered efficiently and compliantly so that you can focus on your mission to create a social impact. Leave the statutory requirements related to your NGO Registration India to us, while you work on making the world a better place.