Section 8 Company – Semantic Taxgen Pvt Ltd

Section 8 Company

How To Register Section 8 Company

Step 1

We help you register your directors with the Ministry of Corporate Affairs (MCA).

Step 2

We help you pick the right company name.

Step 3

We draft and file the documents required for your company registration (MoA and AoA).

About Section 8 Company

A Section 8 company under the Companies Act, 2013 or a Section 25 Company as per the Companies Act,1956 is an organization registered with an objective of promoting the fine arts, science, literature, or knowledge sharing for a purposeful matter or for charity. These are the limited companies established under the Companies Act. The Government grants these companies an exclusive license under Section 8 Companies Act. There are three main conditions for granting the license is.

  • The company should form for the charitable purpose.
  • Income and profits should be used towards these objects.
  • The company should not pay any dividend to its members.

The following are the advantages of incorporating a Section 8 company over other modes of registering an NGO:

  • It has organised operations and greater flexibility.
  • Avoids meticulous registration process and no physical presence required.
  • No requirement of a minimum paid-up capital.
  • Seamless procurement of tax benefits under section 12AA and 80G of the Income Tax Act.
  • Any partnership firm can be a member in its individual capacity and obtain Directorship.

For registering a Section 8 company, the following criteria must be fulfilled:

    • Governed by: Companies Act, 2013.
    • Members: Minimum of 2 Directors/Shareholders.
    • Important Documents: MoA, AoA and financial statements.
    • Board: Directors.
    • Property management: The property of the company vests in the name of the Company and the same can be sold as per the rules mentioned under the Companies Act. (Ex: With the consent of the Board of Directors in the form of a resolution).
    • Winding up or closure: Dissolution as per the bye-laws of the society, upon dissolution and after settlement of all debts and liabilities, the funds and property of the society may not be distributed among the members of the company, rather, the remaining funds and property must be given or transferred to some other section 8 company, preferably one with similar objects.
    • Annual compliance: There is a requirement of annual compliance by the filing of annual accounts and the returns of company with the RoC.
  • DSC and DIN of the Directors.
  • Objectives and proposed work of the company.
  • Financial statements like assets and liabilities, the projection for five years etc.
  • Directors personal documents.
  • Registered office address documents viz. rental agreement or sale deed in the name of the company, utility bills not older than two months.

Frequently Asked Questions

Is there any maximum limit for the number of members in the Section 8 company?

There is no such maximum limit.

What are the other alternatives for starting an NGO?

The other alternatives are to start a Trust or a Society based on the objectives of your NGO.

Can any government employees or officer be a member of NGO?

The answer to this question is yes. Government employees or officers can be part of NGOs provided the NGO is not anti-government. There are a few rules too that these people have to follow, one of them is to make sure that the NGO is not profit making and the member must not draw any salary from the NGO.

How is the property of Section 8 managed?

The property of the company vests in the name of the Company and the same can be sold as per the rules mentioned under the Companies Act, (Eg: With the consent of the Board of Directors in the form of a resolution).

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