Section 8 Company

By DoBiz India

Incorporation of

Section 8 CompanySec

8

Introduction

A Section 8 company is an company which isregistered as an non profit organisation. Non- profitorganisation/company refers to a Company whichhas its object of the promotion of commerce, art,science, sports, education, research, social welfare,religion, charity, protection of environment, intendsto apply its profits, if any, or other income inpromoting its objects.

v

b

Who Can form a Section

8?v

b Any person or associations of persons (Including

Partnership Firm).

Any existing company.

One Person Company cannot be a Section 8 Company.

Key Benefits of Section 8

Companyv

bMany privileges and exemptions under Company Law. Exemption from requirement of Minimum Paid-up capital. Exemption of Stamp duty for registration. Non-application of Companies Auditor & Report Order

(CARO) 2003. Registered partnership firm can be a member in its own

capacity. Tax deductions to the donors of the Company u/s. 80G

of the Income Tax Act.

Requirements of Section 8

Companyv

bMinimum 2 Shareholders (for Private Ltd. Co.) and 7

Shareholders (for Public Ltd. Co.).

Minimum 2 Directors (for Private Limited Co.) and 3 Directors (for Public Limited Co.).

The directors and shareholders can be same person.

DIN (Director Identification Number) for all the Directors.

DSC (Digital Signature Certificate) for two of the Directors.

Registration Procedure

Obtain DSC & DIN

v

bA company needs to have a minimum of two Directorsand to make the application for ascertainingavailability of name; Director IdentificationNumbers of at least 2 Directors are required. If theproposed Directors do not have DIN, then apply theirDIN and obtain Digital Signatures.

Name availability for Proposed

Company v

b

Obtain Name Approval Letter from the Registrarof Companies after making an application in E-Form 1A. Six names in preferential order may beproposed in single application.

Preparation of MOA & AOAv

bDraft MOA and AOA of the proposed company. The formatsof MOA and AOA are given in Schedule I to the CompaniesAct 2013. The MOA and AOA have to be signed by the subscribersindicating the number of shares to be subscribed by each of themagainst their names in the MOA.The AOA also mentions the names of the First Directors of theCompany.The MOA of the Company should be in form INC 13.

License under section 8 Companies

with Charitable Objects v

bAn Application for License under Section 8 shall be filed inform INC 12 with following attachments-

Draft Memorandum of Association (MOA) in form INC 13;

Draft Articles of Association (AOA) ;

Declaration in Form INC. 14 by an Advocate/CA/Cost Accountant/CS in practice, that the draft MOA & AOA have been drawn up in conformity with the provisions of section 8 and rules made there under and all the requirements under section 8 have been complied with;

License under section 8 Companies

with Charitable Objects v

b A declaration in Form INC. 15 by each of the persons

making the application;

Brief profile of all the promoters.

Grounds of Application.

An estimate of the future annual income and expenditure of the company for next three years, specifying thesources of the income and the objects of the expenditure.

Filing of Incorporation

v

b

The following forms are required to be filed with the RoCafter issuance of license:

Form No. INC - 7 (declaration of compliance with the requirementsof the Act on application for registration of a company).

Form No. INC - 22 (notice of situation of registered office).

Form No. DIR – 12 (appointment of directors of the company), and A Power of Attorney to be executed by subscribers and proposed

directors.

Certificate of Incorporation

v

bAfter all the incorporation papers are filed and reviewed by the RoC, the RoC may require certain clarifications. These clarifications or enquiry need to be satisfied by the person who has been authorised to do so by the Power of Attorney filed with the RoC.

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