In this chapter, we’ll explore the process of registering a Section 8 Company with LegalRaasta. We provide end-to-end services to simplify the often complex registration process and guide you towards establishing a Section 8 Company quickly and efficiently.

Introduction to Section 8 Company Registration

A Section 8 Company, governed by the Companies Act, 2013, is a unique legal structure designed for non-profit organizations. These entities aim to promote art, science, education, sports, charitable activities, social welfare, religion, environmental protection, and similar objectives. Unlike regular companies, Section 8 Companies do not distribute their profits among shareholders. Instead, the profits are utilized for the advancement of these noble causes.

Key Features of Section 8 Company Registration with LegalRaasta

1. Experienced Guidance: LegalRaasta boasts years of expertise in company registration and a deep understanding of the regulatory landscape. Our team of experts offers professional and hassle-free services to help you establish a Section 8 Company.

2. End-to-End Services: We provide comprehensive support throughout the registration process, from name reservation to document preparation and submission. Our services ensure your Section 8 Company complies with all legal requirements.

3. Dedicated Support: Our dedicated support team is readily available to address any queries or concerns you may have. We offer assistance at every step of the registration process, ensuring a smooth and efficient experience.

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Section 8 Company Registration with LegalRaasta:

LegalRaasta simplifies the process of Section 8 Company Registration, providing several key benefits to entrepreneurs and non-profit organizations.

1. Exemption from Tax: Section 8 Companies registered under section 12AA of the Income Tax Act enjoy a 100% tax exemption. They utilize their profits for charitable purposes, making these entities non-taxable.

2. No Minimum Capital Requirement: Unlike other company structures, Section 8 Companies are not bound by a minimum capital requirement. This flexibility allows these entities to tailor their capital structure according to their growth and operational needs.

3. Separate Legal Entity: Section 8 Companies gain a separate legal identity, just like other registered companies. This enhances their credibility and provides them with greater autonomy and legal standing.

4. Credibility through Compliance: Section 8 Companies are subject to stringent legal compliance frameworks, enhancing their credibility. They follow strict compliances post-registration, which makes them more trustworthy.

5. Freedom in Choosing a Name: Section 8 Companies have the freedom to select a name of their choice during the registration process, without the obligation to affix the term “Section 8” after their name.

Eligibility Criteria for Section 8 Company Incorporation

For those looking to establish a Section 8 Company with LegalRaasta, there are specific eligibility criteria:

1. Indian National or HUF: An Indian national or Hindu Undivided Family (HUF) can incorporate a Section 8 Company.

2. Minimum Directors: The entity must have at least one director.

3. Promotion of Non-Profit Objectives: The primary objective of the Section 8 Company should be related to promoting art and science, charitable activities, social welfare, education, or providing financial assistance to individuals from lower-income groups.

These eligibility criteria ensure that the Section 8 Company operates with the core mission of promoting social welfare and contributing to the greater good of society.

Mandatory Legal Requirements for Section 8 Company:

Before applying for Section 8 Company registration with LegalRaasta, specific legal requisites must be fulfilled:

1. Number of Directors: If the Section 8 entity intends to operate as a private limited company, a minimum of two directors is required. For public limited companies, a minimum of three directors is necessary.

2. Number of Members: Private limited Section 8 Companies are capped at 200 members, while public limited Section 8 entities do not have a membership limit.

3. Capital Requirement and Name: Section 8 entities are not required to maintain a minimum paid-up capital. They are also not obligated to include terms like “private limited” or “limited” in their name.

4. Company Objects: Only entities with non-profit objectives are eligible for Section 8 Company Registration. The Memorandum of Association and Articles of Association must explicitly state such goals. Any profits generated by Section 8 entities must be utilized for charitable purposes or reinvested in the entity, and they cannot be distributed to members.

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The Registration Process with LegalRaasta:

1. Digital Signature Certificate (DSC) Application:

What is DSC: A Digital Signature Certificate (DSC) is an electronic form of a physical signature, serving as a proof of identity for online documents and transactions.

Process: The first step is to apply for DSC for the proposed directors and subscribers of the Section 8 Company. This involves submitting an application to an authorized DSC provider. The applicant must provide necessary documents, such as identity proof, address proof, and passport-sized photographs.

Importance: DSC is crucial in the registration process, as it authenticates the identity of individuals applying for Director Identification Numbers (DIN) and other regulatory filings.

2. Director Identification Number (DIN) Application:

What is DIN: Director Identification Number (DIN) is an eight-digit unique identification number allotted to an individual who wishes to be a director in a company.

Process: After obtaining DSC, the next step is to apply for DIN for the directors. Applicants can visit the official Ministry of Corporate Affairs (MCA) portal and fill out the DIN application form (DIR-3) after obtaining DSC.

Verification: The submitted DIN application and attached documents are verified by the company’s official DSC.

3. Company Name Approval:

What is Company Name Approval: Choosing a unique name for your Section 8 Company and obtaining approval for it is a critical step in the registration process.

Process: LegalRaasta assists in searching for an appropriate and unique name for your company. The selected name should align with the guidelines provided by the Ministry of Corporate Affairs (MCA). Once the name is finalized, LegalRaasta helps in applying for name approval with the MCA.

4. MOA and AOA Drafting:

What are MOA and AOA: The Memorandum of Association (MOA) and Articles of Association (AOA) are legal documents that define the company’s objectives, internal rules, and regulations.

Drafting: LegalRaasta helps in drafting the MOA and AOA, ensuring that these documents align with the company’s objectives and comply with legal requirements. The MOA and AOA are prepared as per the format provided by the Companies Act, 2013.

5. Incorporation Application Filing:

Document Submission: Once the MOA and AOA are finalized, the next step is to submit the necessary documents for incorporation. These documents typically include PAN cards, residential proof, address proof, DSC, DIN forms, and the MOA and AOA.

Submission Channel: LegalRaasta facilitates the online filing of the incorporation application with the MCA. Once the requisite fees are paid, the application is submitted for verification and approval.

6. Application Verification:

Government Review: After submitting the application, it undergoes a thorough review and verification process by the relevant authorities in the Ministry of Corporate Affairs.

Compliance Check: The government checks the application for compliance with all regulatory requirements and conducts due diligence on the documents submitted.

7. License Acquisition:

Obtaining the License: Upon successful verification and approval of the application, the MCA grants a license for the Section 8 Company to operate. This license confirms that the company complies with the necessary legal and regulatory standards for operation.

8. Certificate of Incorporation:

Issuance of Certificate: Following the acquisition of the license, the MCA issues a Certificate of Incorporation for the Section 8 Company. This certificate officially establishes the company’s existence as a legal entity.

Legal Recognition: The Certificate of Incorporation is proof that the company is recognized as a separate legal entity, distinct from its directors and shareholders.

To sum up, LegalRaasta simplifies the Section 8 Company Registration process, offering experienced guidance, end-to-end services, and dedicated support. Establishing a Section 8 Company with LegalRaasta provides various benefits, including tax exemption, no minimum capital requirement, separate legal identity, increased credibility, and the freedom to choose a name. If you aim to promote non-profit objectives and social welfare, a Section 8 Company registration with LegalRaasta is the ideal choice.

Donations and Funding for Section 8 Companies:

Section 8 Companies have the privilege of raising funds and donations to further their charitable objectives. Several methods are available for donations and funding:

1. Foreign Contributions: Section 8 Companies can receive foreign contributions only if they obtain FCRA (Foreign Contribution Regulation Act) registration. Alternatively, they can apply for prior permission from the Commissioner for immediate foreign contributions.

2. Equity Funding: Equity funding can be achieved by releasing new equity shares at a premium price. This method allows Section 8 Companies to raise funds from investors interested in contributing to their cause.

3. Domestic Donations: Section 8 Companies can accept donations from Indian residents without any restrictions. However, it is crucial to establish a robust system to prevent money laundering and ensure transparent financial practices.

LegalRaasta simplifies the process of registering a Section 8 Company and offers a range of services to facilitate the process. By choosing LegalRaasta for Section 8 Company Registration , you can navigate the complexities of registration and focus on your mission to promote non-profit objectives.