Imagine a business that is legally registered and also creates a positive impact in society. If your vision is to make a better world with education, then entrepreneurs can seek a profitable legal structure. Yes, by leveraging a formal legal structure, you can start the company registration journey. To build a business in India to focus on charitable works, legal recognition, and a strong foundation were required. This is where the Section 8 company registration in India performs an instrumental role. 

In India, Section 8 is a well-established legal framework for businesses as outlined in the Companies Act of 2013. The companies are registered under this structure to invest in charitable objectives. 

Learn more in the next section!

What is a Section 8 company registration?

The Section 8 company registration determines the comprehensive process of forming a legal company in India. Such companies are established under the Companies Act. In addition, it is also recognized as a non-profit organization. The core work of such companies’ establishment is to promote charitable objectives such as education, healthcare, art, or environmental activities. Through these nonprofit objectives, the company brings a positive change to the community. 

But the most attractive thing about this structure, which makes it unique, is its shares. The company’s rules determine that a nonprofit organization is strictly prohibited from distributing any profit to its members. By strictly prohibiting profit-sharing, the principle ensures that organizations remain focused on their missions. 

Why Choose a Section 8 Company in India?

Selecting the right legal structure is critical for a dreamer of change. But the entrepreneurs can utilize the multiple benefits by navigating the business registration online process. 

  • Legal Recognition and Credibility: A Section 8 company is often indexed under the purview of the Indian government. Can operate the business easily with a solid basis in law. By enhancing the organization’s credibility, it opens the door to making connections with donors. 
  • Tax Advantages: According to Sections 12AB and 80G of the Income Tax Act, a Section 8 company qualifies for tax exemptions. For Section 8 registration, there is no minimum capital requirement. 
  • Assets Protected: Offers limited liability protection, which means members’ assets are generally shielded from financial risks.
  • Distinct Legal Entity: A nonprofit organization has its own distinct identity and is capable of entering into contracts as well as initiating or defending legal actions in its name.
  • Focus on Social Objectives: Such organizations are specially established to promote non-profit activities. It ensures that all profit must be used to further charitable objectives. 

Eligibility Requirement for Section 8 Company Formation

Before starting the non-profit company registration, there are specific requirements.

You need to meet legal formalities!

To make a place like an organization requires several directors and members, including

  • Three directors are required for public limited registration.
  • The shareholders can be individuals or members.
  • Gained profit can be divided among the members of the organization.
  • MOA and AoA to demonstrate the company’s objectives and internal rules with regulations.
  • The designated directors required DSC and DIN. 
  • For registered office proof, provide a utility bill or a rent agreement. 
  • Director’s identity and address proof
  • Declaration by directors and subscribers

The Section 8 Company Formation Process

Company registration online is the way to meet compliance and lawfulness. Here is more detail related to the Section 8 company formation process:

Step 1: DSC and DIN

Securing the DSC and DIN by the proposed directors is essential. It is required to file all applications or forms digitally. Simultaneously, the directors obtained the Director Identification Number. 

Step 2: Name Reservation

After obtaining the Digital Signature Certificate (DSC) and Director Identification Number (DIN), the next step involves utilizing the “RUN” form to reserve the company name via the online portal of the Ministry of Corporate Affairs (MCA). Must ensure that the selected name reflects the name of the company. It showcases the objective of the organization. You may include specific terms such as “Association,” “Foundation,” or “Forum.”

Step 3: Draft MoA and AoA

The memorandum and articles of association are the core documents required during Section 8 registration. The MoA is required to demonstrate the objective of the company, while the AoA is required to outline the organization’s internal rules and regulations. These documents must be drafted accurately in alignment with the Companies Act and the purpose of the charity.

Step 4: Section 8 License

It is another important part. For Section 8 company registration, you need to obtain a license. Submit the application form (INC-12) to the Regional Director of the MCA. If the authority is satisfied with the organization’s objectives, a Section 8 license will be issued. 

Step 5: Filing for Incorporation

After securing the Section 8 license, file the incorporation form by using the SPICe+ Part B. 

Step 6: Certificate of Incorporation

Submitted documents and applications will be examined by the ROC to ensure completeness and accuracy. After a successful review, the Certificate of Incorporation will be issued along with the CIN and PAN. Congratulations, your company is officially registered. 

Understanding the Section 8 Company Registration Cost

For individuals who are seeking to start a nonprofit company in India, the primary question is what the registration costs are. Well, the cost varies on several principles, such as

  • Government Fees: This involves paying for a DSC (Digital Signature Certificate), name approval, and filing the incorporation forms. 
  • Stamp Duty: To draft the MoA and AoA, you need to pay for stamp duty. Cost varies from state to state. 
  • Professional Fees: It involves the consultation charges, including lawyer and CA fees. 

Conclusion | NGO Company Registration in India

The legal framework of Section 8 company registration in India is more trusted and stronger for dreamer-of-change individuals. It provides transparent and accurate benchmarks. By leveraging Section 8 registration, the organizations can utilize the credibility and limited liability protection. On the other hand, for the NGO company registration, the Section 8 business legal structure can be the proof of the ideal. Navigating the nonprofit registration process showcases the testament to commitment. Unlock the success key with Company Registration Online professionals.

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FAQ | Section 8 Business Registration Online

1. How can I change the name of my Section 8 company?

Ans. To change the name of the company, conduct a general meeting and pass a special resolution. Additionally, ensure that the required forms are submitted to the Registrar of Companies (RoC).

2. What are the requirements for Section 8 registration?

Ans. The general requirements for Section 8 registration are to gather the necessary documents, including filing applications, and meet the specific regulation requirements. 

3. What is the timeline for nonprofit organization registration?

Ans. The process typically takes 10-14 working days.

4. Can a Section 8 company convert into a private limited company?

Ans. Yes, a Section 8 company is eligible to convert into a private limited company. But it required a comprehensive process, such as approval from shareholders. 

5. Is it permissible for the shareholders of a Section 8 company to also serve as directors?

Ans. Yes, the shareholders can also serve as the directors of the company. In addition, there is no maximum limit for the number of directors according to the Companies Act, 2013.