Section 8 Company is a company that is only registered for charity purposes or for the organization's objectives towards the society.
Main objective of the company is to promote art, commerce, sports, science, education, social welfare, religion, charity, research or protection of the environment. Companies profit gained should only be used to promote the activities of the organization or to achieve the objectives of the organization.
Advantages of Section 8 Company
The benefits enjoyed by a Section 8 Company are as follows:
- Exemption from stamp duty for registration.
- Many privileges and exemptions under the Company Laws.
- Tax deduction to the donors of the company.
- These companies exempt from keeping any titles or suffix.
- These companies can be formed without share capital, the funds are brought in the form of donations
- The shares of the company can be transferred easily.
To register a company under Section 8 Company you need to just follow these steps:
- Fill a simple online form which will be available on the official website of Registrationwala
- Obtain Digital Signature Certificate.
- Obtain Director Identification Number (DIN), Quickly
- Apply for Section 8 Company name approval from Ministry of corporate affairs.
- Apply for Section 8 License from Regional Director of Ministry of corporate affairs.
- Obtain Certificate of Incorporation (COI) and then apply for PAN (Permanent account number) and Tax Deduction Account Number (TAN) and Registration is complete under Section 8 Company.
- You are ready to open your Bank Account.
- 100% Tax-free on income of NGO since need to Apply for 80G & 12A registration
Eligibility Criteria:
- Person or group looking towards Section should have an objective to promote science, education, sports etc
- Revenue gains earned should be used for the companys development only
- Members of the company will not be getting distribution of profits amongst
What will be the last Name to be added to Section 8 NGO?
As per rule 8(7), the name shall include the words
- Association For labour association, Trade Association, Social body like RSS, financial association, RWA
- Forum Social knowledge or Social discussion, Buyer association etc.
- Foundation Foundation is good for microfinance company, social welfare organization, University
- Chambers for promotion of trade, science, and arts
- Federation for club, school, research, university, consumer forum
- Confederation social and welfare work
- Identity proofs of the members of the Company
- Address proof of the members
- Passport size photographs
- Copy of the rent agreement, in case, when rented
- Copy of the property papers, if any
- Copy of electricity or water bills
- NOC from the landlord
- Small draft about the core objectives of Section 8 Company
- Sample copy of signature
Eligibility Criteria for Section 8 Company license
- The major objective should be the promotion of sports, Social welfare, promotion Science & Art, education & financial assistance to lower income group.
- All the surplus generated must be used for the meeting the principal objective of the company
- No profit should be distributed among the members & Director of the company directly or indirectly
- Founders, members & Directors of the company cannot draw any remuneration in any form cash or kind.
- The Company should have a clear vision and project plan.
Statutory Obligations
- The Revenue and surplus generated should be exclusively used for the achievement of the main objective of the company
- Appointment of Company Secretary is no longer mandatory
- Incentives or commission are not allowed.
- No need for minimum share capital
- AGM can be conducted as Shorter notice period
- Directors of the Section 8 Company can take positions in more than 20 companies
- No portion of the profit should be paid to the directors and members of the company
- Profit is 100% tax-free if 12A registration is obtained from income tax department.
- The Objective of Company cannot be altered without prior permission from Central Government of India
- Sharing the profit with the promoters is strictly prohibited
- The revenue of the company shall only be applied for the promotion of the main objective
- The income tax rates are applicable at the same rates as they applicable to other companies
- The company registered under Section 8 of the company shall not alter the provisions of its memorandum or articles except the previous approved by the Central Government
- No member of the company should be appointed as a remunerated officer and there will be no incentive.
- Section 8 Company is licensed under the Section 8 of the Companies Act, 2013. Under the Companies Act, 1956, this act was earlier known as the Section 25 Company.
