What is a Section 8 Company?

A Section 8 company is a type of non-profit organization registered under the Companies Act of 2013 in India. It is set up with the objective of promoting charitable, social, or environmental causes and does not distribute profits to its members. Instead, all profits are used for the promotion of its objectives.

Registration Process for Section 8 Company

1. Name Approval:
   • Choose a unique name for the company.
   • Apply for name approval through the Ministry of Corporate Affairs (MCA) via the RUN (Reserve Unique Name) service.
2. Memorandum and Articles of Association (MOA/AOA):
   • Prepare and submit the MOA and AOA. These documents outline the objectives and internal rules of the company.
3. License Application:
   • Submit the application for a Section 8 company license to the Registrar of Companies (RoC), including the required documents like MOA, AOA, and forms.
4. Declaration and Affidavit:
   • Prepare a declaration and affidavit stating that the company will promote charitable or social welfare objectives and will not distribute profits to its members.
5. Director Identification Number (DIN) and Digital Signature Certificate (DSC):
   • Obtain the DIN and DSC for the proposed directors. These are essential for the electronic filing and verification of documents.
6. Filing with RoC:
   • File the application along with all necessary documents and the prescribed fee with the RoC.
7. Scrutiny and Approval:
   • The RoC will scrutinize the submitted documents. If everything is in order, they will issue a Certificate of Incorporation, marking the successful registration of the Section 8 company.

Benefits of a Section 8 Company

• Tax Exemptions:
  Section 8 companies are eligible for tax exemptions, including income tax, capital gains tax, and dividend distribution tax.
• Limited Liability:
  The liability of the members is limited to the extent of their contribution to the company.
• No Minimum Capital Requirement:
  There is no mandatory minimum capital for Section 8 companies, providing flexibility to start with any amount of capital.
• Non-Distribution of Profits:
  Profits earned by the company are reinvested for the promotion of its charitable or social objectives, rather than being distributed as dividends.
• Credibility and Recognition:
  Being registered as a Section 8 company boosts credibility and helps attract grants, donations, and collaborations for charitable activities.

Additional Considerations

• Consultation with Professionals: It is advisable to seek the assistance of a legal professional or company secretary to ensure compliance with regulations and a smooth registration process.
• Updated Regulations: Be mindful that regulations may change, so stay informed about any updates to the process or benefits.

This registration process is completely online and provides an excellent structure for businesses focused on social welfare and non-profit objectives