An Overview of Section 8 Company Registration

Following are the advantages of Section 8 Company Registration in India:

1. Separate Legal Entity:

These types of companies in India are considered as a separate legal entity, which means that they can own property, sue or be sued in their name, and enter into contracts.

2. More Trustworthy & Credibility:

Due to its non-profit nature, Section 8 Companies are often viewed as more credible & trustworthy than other types of Companies.

3. Nil Stamp Duty:

These Companies are exempted from paying stamp duty on their Registration Documents.

4. Minimum Share Capital:

These companies don’t have any minimum capital requirement.

5. No Minimum Capital is Required:

In India, Section 8 Companies do not have a minimum capital requirement and they can adjust their capital structure as per their growth and give them more flexibility.

6. Exemption to Donors:

Tax exemption is only allowed to the donations received by the Section 8 Company under Section 12A & 80G of the Income Tax Act.

Following are some vital requirements for Section 8 Company Registration:

1. Directors:

For Section 8 Company Registration in India, a minimum of 2 Directors are required.

2. Capital Requirement:

There is no minimum paid-up capital for the Registration of Section 8 Company. NGOs in India established as a Section 8 company need not use the words Private Limited or Limited in their name.

3. Management

Section 8 Company is managed by the BoD (Board of Directors) as per AoA & MoA of the Company, unlike other Trusts that are handled by the Trustees as per the Trust Deed.

4. Regulation under various Acts:

Section 8 Company needs to follow the Rules & Regulations prescribed under the Companies Act, 2013. It needs to file returns & maintain Books of Account with ROCs. Section 8 Company can’t make any alterations to the provisions of Memorandum of Association (MoA) & Articles of Association (AoA) without prior consent of the Central Government and it should follow the provisions of the GST Law & Income Tax Act.

5. Charitable Objects:

In India, Section 8 Companies are registered with non-profit objectives. The AoA & MoA must mention the purpose for which it is set up. Any profits earned by the Section 8 Company is utilised for the furtherance of its main objectives i.e., charitable purposes in the Company. The profits will not be distributed among its members.

6. DSC and DIN:

DSC or Digital Signatures of all the proposed Company’s Directors are necessary for the Registration because the forms for the Registration process are filed online & should be digitally signed. Apart from DSC, you need to apply for DIN for the Directors and the application for allotment of DIN must be filed in Form DIR-3 or along with the SPICe+ Form for the Registration.