Section 8 companies are those companies that are incorporated with an objective to promote arts, commerce, education, charity, environment protection, sports, welfare, medicines, etc. The income of the company or money raised by doing events, receiving donations cannot be used for paying out dividends among the members of the company. The money raised should be used for promotional and charitable purposes.

Section 8 companies obtain their incorporation certificate from the Central Government and are liable to carry on according to rules stated by the government. If the company fails to fulfill the rules and compliances stated by the government it may lead to the winding up of the company by the order of the government.

Here we are supposed to discuss the simplest way to Register a Section 8 company or an NGO.

PROCEDURE OF INCORPORATION OF A SECTION 8 COMPANY

1. First of all you need to reserve the name of the proposed company by filing the Part A of the Spice Plus form. Choose the nature of the business activity and file two names of your choice if the names get rejected by the CRC they again file with two new names within 15 days from the date of rejection.

2. Apply for the Digital Signature of all the members and directors. Note: All the members and Directors should have DSC because all the forms of incorporation are online.

3. Once the proposed name gets reserved you get a window of 20 days to file the incorporation form which Spice Plus along with concerning attachments. Spice Plus is an advanced electronic form that is a combination of 8 forms in one. You can apply for all the following with this one form:

  • Name Reservation
  • Apply for Director Identification Number (DIN)
  • PAN Application
  • TAN Application
  • Incorporation
  • ESIC Registration
  • EPFO Registration
  • GSTIN Registration

4. After that you need to file the Part B of the Spice + form. Here you need to provide the details of all the members and directors. What will be the authorized share capital, paid-up share capital, and registered address of the company? All these details need to be filed with proper attachments.

5. Fill the AGILE form for procuring the GSTIN- It is not mandatory to apply for a GST number while registering a Section 8 company.

6. After all the steps above attach the concerned signatures and upload it to the MCA website.

7. After the company gets approval from ROC and the Certification of Incorporation, then the company needs to apply seeking approval for commencing the business (INC-20A) within 180 days from the date of incorporation.

Is it mandatory for Section 8 Company to add a suffix like private limited or limited?

The Section 8 Companies should not add any suffix like limited or private limited but as per the rule 8(7) of Companies (Incorporation) Rules 2014 , the name of the company should contain terms like Foundation, Trust, Forum, Association, Chambers, Federation, Confederation, etc.

DOCUMENTS AND DETAILS REQUIRED FOR REGISTRATION SECTION 8 COMPANIES

1. Digital Signature of the members.

2. Director Identification Number (DIN).

3. Memorandum of Association.

4. Articles of Association.

5. Passport size photographs.

6. Email-id & Mobile no. of Company and Members

7. Pan Card.

8. ID Proof of all the members (Voter ID/Passport/Driving License).

9. Details of the First Directors.

10. Address Proof (Electricity Bill, Property Tax).

HOW REGISTRATION OF SECTION 8 COMPANY IS DIFFERENT FROM REGISTRATION OF A PRIVATE LIMITED COMPANY?

1. Affidavit of the directors in form no INC 15 is required.

A self-declaration with regards to the matter stated in form no INC 15 is sufficient and is accepted.

2. INC 33 and 34 are applicable in Section 8 Company

A physical copy of the MOA and AOA duly signed by the members and witnesses (Professional) along with an estimated income and expenditure statement of three years should be attached with the form.

3. Memorandum and Articles of Association should be notarized.

4. The government fee is too high.

In most of the states in India, the stamp duty of Section 8 Company with respect to stamp duty of MOA and AOA are very nominal.

CERTIFICATION OF e-FORMS FOr SECTION 8 COMPANY:

Just like registration of Private or Public limited companies while filing forms for Incorporation of Section 8 company certification of Practising professional is required whether from a CS, CA or CMA.

By csannusharma

Annu Sharma is a qualified Company Secretary as well as a Certified CSR Professional and a Law graduate with rich experience of 4 years in secretarial, corporate legal affairs, management and corporate governance; in different industry sectors. Featured on Tax Guru.In, Compliance Calendar LLP and Blogger.com.