To influence any community or a group of members, an external force is required. Even when a company is established, it runs with a motive that serves as the external force. If you are aspiring entrepreneurs and want to bring the change, then the right legal structure can be helpful. In accordance with the Companies Act of 2013, the legal structure for a Section 8 company registration in India was established. 

The organizations that register under this legal structure operate to promote objectives such as education, art, social welfare, etc. The amount the organization earns from charitable works is used for further activities. 

But still, there is a question!

How does the online Section 8 company registration influence?

To understand this, go through the blog and read the complete details. Explore more in the next section!

Section 8 Company Registration to Influence

The registration under Section 8 involves registering a company in compliance with the Section 8 Companies Act. Well, there is no shortcut to influence, but its advantages make it ideal for aspiring individuals. This legal structure not only focuses on nonprofit objectives but also offers multiple benefits. The advantages make it accessible to operate a company without tension.

To achieve the social mission goal, these factors can influence you:

  • Enhance Credibility and Trust: Registering your Section 8 company in India means adding a layer of credibility and trustworthiness. These features attract donors and build trust with partners.
  • Tax Exemptions: The partners of the non-profit company, including its donor, can enjoy the tax advantages under the Income Tax Act.
  • Easier to Raise Donations: Section 8 is a legally based structure and approved by the Indian government. With the layer of formal framework, the organization can easily raise donations and funds. It is the best route to expand your business operations.
  • Financial flexibility: For Section 8 company registration in India, there is no requirement for minimum capital, including no stamp duty needed. Without immediate capital investment, the organizations can focus on their mission despite worrying about capital requirements. 
  • Naming Independence: For a nonprofit company formation, there is no need to add a suffix such as “Limited” or “Private Limited” to their organization’s name. Well, to reflect the social mission objectives, you can use names like “Academy,” “Foundation,” and “Society.”

Purpose of Non-Profit Company Registration—Section 8

Motive reflects the objectives of an organization!

To form a nonprofit company in India, you should have a purpose. In addition, obtaining Section 8 registration is an important option for individuals or organizations. Whoever is seeking to make a positive impact in a community under a legal framework can navigate registration steps. For the management of compliance with regulations, the companies under Section 8 need to align with various requirements. Timely filings help to avoid legal action. However, non-compliance can lead to revocation of the company’s license.

How to Register a Section 8 Company for Non-Profit Objectives? 

The online company registration procedure starts with obtaining the DSC by the directors and applying for DIN. The steps include

Obtain DSC

To sign the documents and form electronically. Provides a layer of security to directors and the company’s information.

Apply for DIN

A Director Identification Number (DIN) grants a distinct identity to the director at the time of company incorporation. Please use Form DIR-3 and apply through the portal.

Reserve Company Name

For the company’s name reservation, utilize the SPICe+ Part A. It is essential to ensure that the name selected by you adheres to the name guidelines. 

Draft MOA and AOA

  • Memorandum of Association: As per the Form INC-3, prepare the MOA. It is required for organizational management, which highlights the main objectives and scope.
  • Articles of Association: To highlight your nonprofit organization’s internal rules and regulations with responsibilities and duties, prepare and draft an AoA.

Get Section 8 License

To legally operate, your nonprofit organization must obtain the Section 8 license. Fill out the application Form INC-12 and attach the supporting certificates with it, such as the MoA and AoA, professional and directors’ consent, etc.

File for Incorporation

Use the SPICe+ Part B form and submit it on the service online portal. Do not forget to attach the signed MOA, AoA, etc. For other registrations, such as GST or EPF, you can attach the AGILE-PRO-S form.

Certificate of Incorporation Issuance

The submitted documents and form will be reviewed by the ROC (Registrar of Companies). Upon successful review, a Certificate of Incorporation and CIN (Company Identification Number) will be issued.

Congratulations, you registered a Section 8 company officially!

Now, to initiate the non-profit objectives to bring about changes.

The Key Points You Should Know Before Company Registration

Key characteristics help you understand registration!

As an entrepreneur, you should know about a few aspects of the Section 8 company legal framework.

Well, the nature of the Section 8 company determines its objectives. It is primarily established to foster charitable works. However, the Section 8 Companies Act, 2013, prohibited the profit distribution among the members. Any profit gained by the organization cannot be divided among its members. But the profit gained is further used for charitable objectives.

But what major thing is required before incorporation?

Yes, we are talking about the license. Securing the Central Government license is critical before applying for incorporation with the RoC. 

Thank you for staying till the end!