About Charitable Company (Section 8)

In India, a non-profit organisation can be registered as Trust by executing a Trust deed or as a Society under the Registrar of Societies, or as a private limited non-profit company under Section 8 Company under the Companies Act, 2013.

Register my Charitable Company (Section 8)

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Our scope of work

    1. Any amount of Capital;

    2. Application for 2 Director Identification Numbers;

    3. Application of 2 Digital Signatures (validity 2 years);

    4. Name Approval;

    5. Drafting of Memorandum and Articles of Association;

    6. Drafting of other additional documents;

    6A. Application of Section 8 License from MCA;

    7. Preparation of various eforms;

    8. PAN & TAN Application

    9. Resubmission of eforms, if any;

    10. Obtaining Certificate of Incorporation from Registrar

Know more about Charitable Company (Section 8)

Charitable Company (Section 8 Company)

In India, a non-profit organisation can be registered as Trust by executing a Trust deed or as a Society under the Registrar of Societies, or as a private limited non-profit company under Section 8 Company under the Companies Act, 2013

 

1. Director:

  • Minimum no. of directors required are 2 out of which 1 shall be Indian Resident.
  • Any person can be a director of the company including family members
  • Director Identification No. (DIN) and Digital Signature Certificate (DSC) are required to be a director of the company
  • Directors are the managers and they are responsible for day to day functioning of the company.

 

2. Shareholder:

  • Minimum no of shareholders required are 2.
  • Director and Shareholders can be the same.
  • Shareholders are the owners of the company

 

3. Capital:

  • There are 2 types of capital i.e. Authorize Capital (It is the capital up to which company is authorize to raise from the member and it can be increase as and when required.), Paid Up Capital (It is the capital which is paid up by the members of the company and it can be increase as and when required.)
  • There is no such requirement for minimum capital, hence the company can be formed with the capital starting from INR 1.

 

4. Registered Office:

  • Any place can be made as the registered office of the company even the residential place can be used as the registered office of the company.

 

5. Registering Authority

  • Ministry of Corporate Affairs

 

6. Required Documents

> Proof of Registered office address (Conveyance/ Lease deed/Rent Agreement/Maintenance Bill)

> Copy of the utility bills of the registered office (Electricity Bill/Telephone Bill not older than two months)

 

    Directors / Shareholders

> PAN Mandatory- Indian National / Passport – Foreign National

> Proof of Identity – Voter Id/Passport/Driving License

> Proof of Address (Electricity Bill/Bank Statement/Telephone Bill/Mobile Bill not older than 2 months)

*All documents for Indian National – To be self-attested

*All documents of Foreign National – To be self-attested & apostilled

Obtain DSC (Digital Signature Certificate)

01

Prepare SPICe+ form (Part A – Name availability and reservation request)

02

Prepare SPICe+ Part B form (Company information i.e. directors, capital etc.)

03

Drafting MOA and AOA (Form 13) and SPICe+ AGILE-PRO (INC-35)

04

Download all the e-forms prepare online and affix DSC on all the e-forms.

05

Attached the require documents with form SPICe+ and upload the e-forms to MCA portal.

06

Payment of RoC Fees & Stamp Duty

07

Issue of Certificate of Incorporation by RoC

08

Advantages

Numerous Tax exemptions are provided to Section 8 Companies, specifically to the donors who are contributing to Section 8 Companies, they can claim the Tax exemption against the donation they made to a Section 8 company.
There is no prescribed limit over section 8 companies for the minimum capital requirement unlike other entities such as public limited, but the capital structure can be altered at any stage as the required for the growth of the company.
A section 8 Company is exempted for the payment of stamp duty applicable for registration as applicable in case of other structures such as private limited or a public limited company.
A Section 8 Company also holds its own identity like other companies structures, and has its own separate legal standing from its member. A Section 8 Company also has a perpetual existence.
A Section 8 Company has more credibility as compared to any other Non-profit organization structure be it a Trust or Society. As it is a licensed by the central government. It has more stringent regulations such as no change in MOA and AOA can be done at any stage or situation in a Section 8 Company. A section 8 company due its strict compliances as regard to functioning has a more reliable image in comparison to other legal structures.
Unlike the names requirements of the private limited or a public limited company, a section 8 company does not require to use a suffix next to its name.

Disadvantages

Profit or Income of the Company shall be applied for the promotion of the main object. Declaration of dividend or distribution of profit to the promoters is not allowed. No member shall be appointed as a remunerated officer. No remuneration / benefit shall be paid to a member being a servant / officer of the Company (except reimbursement of out of pocket expenses, reasonable interest on money lent or reasonable rent on the premises)
A Section 8 Company has to ensure that its profits and all other incomes are utilized only for the purpose of promoting its objects and not for any other purpose. It should also ensure that its profits are not distributed as dividend among its members.
A company registered under this section shall not alter the provisions of its memorandum or articles except with the previous approval of the Central Government.
If the Central Government has imposed some conditions and regulations upon the company for granting a license under section 8 then such a company is bound by such conditions and has to ensure adequate compliance with them. Where such conditions and regulations have been imposed then such conditions and regulations are required to be included in the Articles or/and memorandum of the company as may be directed by the government.
Section 8 Company is regarded as a ‘company’ within the meaning of the Income Tax Act, 1961 and as such its income is taxable according to the applicable rates similar to those applying to other companies.
Factors of Comparison Private Company Public One Person Company Limited Liability Partnership Partnership Sole Proprietorship
Capital Min: INR 1 & Max:No Limit Min: INR 1 & Max:No Limit Min: INR 1 & Max:2 Crore Min: INR 1 & Max:No Limit Min: INR 1 & Max:No Limit Min: INR 1 & Max:No Limit
Director Minimum 2 Minimum 3 Minimum 1 - - -
Shareholder Minimum 2 Minimum 7 Minimum 1 - - -
Designated Partner/Parter - - - Minimum 2 Minimum 2 -
Taxation 30%(25% if turnover does not exceed 250 Crore) 30%(25% if turnover does not exceed 250 Crore) 30% 30% 30% As per Slab Rates
Statutory Audit Compulsory Compulsory Compulsory If Contribution exceed INR 25 Lacs; If Turnover exceed INR 40 Lacs Not Required Not Required
Investor Preference High Low Low Medium Very Low Very Low
Compliance Cost Mdeium High Low Low Low Low
Regulator Registrar of Companies SEBI/Registrar of Companies Registrar of Companies Registrar of Companies Registrar of Firms -
Time take for Registration 5-7 working days 5-7 working days 5-7 working days 20-25 working days 10-12 working days 5-7 working days