Posted by Are you thinking of starting a non-profit organization in India? If so, you may want to consider registering as a Section 8 Company. This type of company is a popular choice for organizations that have a goal of promoting art, science, charity, education, religion, social welfare, and more. In this article, we will take a closer look at what Section 8 Company Registration entails and why it may be the right choice for you.
What is a Section 8 Company?
A Section 8 Company, also known as a not-for-profit company, is governed by the Companies Act of 2013. The main objective of a Section 8 Company is to promote charitable activities such as art, science, education, religion, social welfare, etc. These companies are prohibited from distributing profits to their members and must reinvest any income back into the company to achieve its objectives.
Advantages of Registering a Section 8 Company
- Tax Exemptions: Section 8 companies enjoy tax exemptions on their income, making it an attractive option for those looking to engage in charitable activities.
- Limited Liability: Members of a Section 8 companies have limited liability partnership, which means that their personal assets are protected in case of any debts or liabilities.
- Credibility: Registering as a Section 8 companies adds credibility to your organization and can help attract donors, volunteers, and partners.
- Perpetual Succession: A Section 8 companies enjoys perpetual succession, meaning that the organization continues to exist even if the members change.
- Easy Funding: Section 8 companies are eligible to receive grants and donations from both Indian and foreign sources, making it easier to fund charitable initiatives.
Eligibility Criteria for Section 8 Company Registration
To be eligible for Section 8 company registration, the following criteria must be met:
- The company must have a minimum of two directors for a private company and three directors for a public company.
- At least one director of the company must be a resident of India.
- The proposed company name must not be similar to an existing company or trademark.
- The company must have a registered office address in India.
How to Register a Section 8 Company
The process of registering a Section 8 company is as follows:
Step 1: Obtain Digital Signature Certificate (DSC)
The first step in registering a Section 8 company is to obtain a Digital Signature Certificate (DSC) for all the proposed directors of the company. The DSC is used to digitally sign documents during the registration process.
Step 2: Obtain Director Identification Number (DIN)
Next, you need to apply for a Director Identification Number (DIN) for all the proposed directors of the company. DIN is a unique identification number assigned to individuals who wish to be appointed as directors of a company.
Step 3: Name Approval
You need to choose a unique name for your Section 8 Companies and submit it for approval to the Ministry of Corporate Affairs (MCA). The name should not be similar to any existing companies and should reflect the objectives of your organization.
Step 4: Incorporation of Company
Once the name is approved, you can proceed with the incorporation of the Section 8 Companies by submitting the necessary documents, such as the Memorandum of Association (MOA) and Articles of Association (AOA), to the MCA.
Step 5: Apply for Tax Exemptions
After the company is incorporated. You can apply for tax exemptions under Section 12A and 80G of the Income Tax Act. Which allows your organization to enjoy tax benefits on its income.
Conclusion
In conclusion, registering as a Section 8 Companies is a great choice for those looking to make a positive impact on society without the intention of making profits. The process may seem daunting at first, but with the right guidance and knowledge, it can be a smooth and rewarding experience. So, if you are passionate about a social cause and want to make a difference, consider registering as a Section 8 Companies today!
So, what are you waiting for? Dive into the world of Section 8 Companies Registration and make a difference today!