Overview
Section 8 company registration is vital for organizations operating for non-profit purposes in India. Established under the Companies Act 2013, these companies promote social entrepreneurship and charitable activities with goals such as advancing education, healthcare, environmental sustainability, and social welfare.
A key advantage of Section 8 company registration is the eligibility for donations to be tax-deductible under the Income Tax Act, coupled with various tax exemptions. Before starting the incorporation process with the Registrar of Companies (ROC), applicants must obtain a license from the Central Government to ensure their objectives meet the non-profit criteria. Strict adherence to these goals is essential to uphold the company's status and enjoy the associated benefits.
Benefits of Section 8 Company
These are certain benefits of Section 8 company registration in India.
Tax exemptions: Non-profit organizations (NPOs), also known as Section 8 companies, are exempt from paying income taxes as long as they use their earnings to further social or charitable objectives. This tax relief increases the entity's financial sustainability and makes it possible for it to direct resources more effectively towards its goal.
Limited Liability: Limited liability protects the personal assets of Section 8 company members in the event of debts or legal disputes. This encourages involvement in charitable and social causes without raising worries about one's financial stability.
Credibility and Trustworthiness: An organisation gains credibility and trustworthiness by enrolling under Section 8 of the Company Registration Act. Because a certified Section 8 business adheres strictly to regulatory requirements, donors, stakeholders, and beneficiaries are more likely to interact with and support it.
Funding Obtaining: doing Section 8 company registration, makes it easier to obtain funding from a variety of sources, including government grants, corporate social responsibility (CSR) funds, charitable organisations, and individual donors. In order to carry out charitable endeavours and achieve the organization's social goals, this financial support is essential
Process of Section 8 Company Registration
Navigating the process Section 8 company registration can seem daunting, but with the proper guidance, it becomes straightforward. Here's a step-by-step overview of how to register your Section 8 company:
Step 1: Obtain Digital Signature Certificates (DSC)
All proposed directors and subscribers to the company must obtain DSCs. These certificates are essential for signing electronic documents during registration, ensuring security and authenticity.
Step 2: Acquire Director Identification Numbers (DIN)
Each director must apply for a DIN, a unique identifier required to participate in the company's management. Submit personal details and identity proofs to the Ministry of Corporate Affairs (MCA).
Step 3: Choose a Unique Company Name
Select a distinctive name for your Section 8 company that reflects its mission. Ensure the name complies with the MCA guidelines and conduct a name search to avoid duplication.
Step 4: Draft the Memorandum and Articles of Association
Prepare the Memorandum of Association (MoA) and Articles of Association (AoA), outlining the company's objectives, rules, and regulations. The MoA should clearly state the non-profit objectives in line with Section 8.
Step 5: File the Incorporation Form
Submit the required forms (e.g., Form INC-12 for Section 8) and necessary documents to the ROC. Accurate and complete documentation is crucial to avoid delays or rejections.
Step 6: Obtain a License from the Central Government
After the ROC reviews your application, obtain a license from the Central Government. This step ensures your company's objectives align with non-profit activities.
Step 7: Receive Certificate of Incorporation
Upon approval, the ROC issues the Certificate of Incorporation, officially recognizing your Section 8 company as a legal entity.
Step 8: Open a Bank Account
With the Certificate of Incorporation and PAN, open a bank account in the company's name to manage finances efficiently.
Step 9: Comply with Post-Incorporation Requirements
Ensure ongoing compliance with statutory requirements, including annual filings and audits, to maintain the company's good standing.
Documents Required for Section 8 Company Registration
Preparing all necessary documents in advance can make the Section 8 company registration process smoother and faster. Here is a comprehensive list of the documents you will need:
Digital Signature Certificate (DSC)
Each proposed director and subscriber must obtain a Digital Signature Certificate to sign electronic documents during the registration process.
Director Identification Number (DIN)
Every individual who intends to be a director of the company must have a unique Director Identification Number, which is obtained by filing Form DIR-3 with the Ministry of Corporate Affairs (MCA).
Memorandum of Association (MoA)
The MoA outlines the fundamental details of the company, including its name, objectives, state of registration, and the liability of its members.
Articles of Association (AoA)
The AoA details the company's internal rules and governance structure, including management procedures, decision-making processes, and operational guidelines.
Declaration by Professionals
A declaration from a Chartered Accountant, Company Secretary, or Cost Accountant confirming that the registration process complies with all legal and regulatory standards.
Declaration of Compliance
A statement ensuring that all requirements of the Companies Act 2013 have been met, affirming the company's adherence to legal norms and regulations.
Proof of Registered Office
Documentation verifying the address of the company's registered office, such as a utility bill, rental agreement, or property ownership document. The office must be located in India.
Affidavit and Consent Forms
Legal statements signed by directors and subscribers confirming their roles and consent to act as directors or subscribers of the company.
No Objection Certificate (NOC)
If the registered office is in a rented property, an NOC from the property owner is required to confirm their consent for the company's use of the premises.
Bank Account Details
Information needed to open a bank account for the company after registration, including the bank name, branch address, and account number.
Identification and Address Proof of Directors
Documents that verify the identities and residential addresses of all directors, such as Aadhaar cards, PAN cards, passports, or voter IDs.
Passport-sized Photographs
For identification purposes, I have taken recent photographs of all directors and subscribers involved in the registration process.
Non-Profit Nature Proof
Evidence demonstrating that the company operates on a non-profit basis, including detailed descriptions of the company's objectives, planned activities, and how any profits will be utilized to further the company's non-profit goals.
Section 8 Company Registration Fees
Understanding the costs of Section 8 company registration is crucial for budgeting and financial planning. The typical expenses are outlined below:
Fee Type | Description | Estimated Cost (₹) |
Obtaining DSC and DIN | Digital Signature Certificates and Director Identification Numbers | 3,000 |
Name Approval of the Organization | Approval of the company name from MCA | 1,000 |
Government Fees, Incorporation Fees, AoA, and MoA | Government fees for incorporation and drafting MoA & AoA | 6,000 – 8,000 |
Stamp Duty and Notary Charges | Stamp duty and notarization expenses | 2,000 |
Professional Fees | Consultancy and legal services provided by taxlegit | 8,000 – 10,000 |
Total Estimated Cost |
| 20,000 – 25,000 |
The fees involved in Section 8 company incorporation
- Obtaining DSC and DIN: Secure Digital Signature Certificates (DSC) for online filings and Director Identification Numbers (DIN) for directors. Approximate Amount: ₹3,000
- Name Approval of the Organization Register your proposed company name with the MCA to ensure it's unique and compliant. Approximate Amount: ₹1,000
- Government Fees, Incorporation Fees, AoA, and MoA Cover mandatory charges for incorporation and drafting the Articles of Association (AoA) and Memorandum of Association (MoA). Approximate Amount: ₹6,000 – ₹8,000
- Stamp Duty and Notary Charges Pay stamp duty on legal documents and fees for notarizing essential paperwork. Approximate Amount: ₹2,000
- Professional Fees Engage consultancy and legal services from firms like Taxlegit to facilitate the process. Approximate Amount: ₹8,000 – ₹10,000
- Total Estimated Investment Overall budget required for all registrations, fees, and professional assistance. Approximate Amount: ₹20,000 – ₹25,000
Why Choose TaxLegit
When it comes to embarking on the journey of registering your Section 8 company, partnering with a reliable and experienced service provider can make all the difference. TaxLegit stands out as your trusted partner in this endeavour, offering a seamless and comprehensive approach to Section 8 company registration. Here's why you should choose TaxLegit:
Professional Staff and Expert Team: Obtain knowledgeable advice for registering your Section 8 company.
Customized Solutions: Your particular needs and objectives are understood by us.
Easy Procedure: A hassle-free registration is guaranteed by our methodical approach.
Rigid Documentation: We take great care with all documentation.
Application Process: Our services assist you in obtaining qualifications and applying quickly.
End-to-End Support: We're with you every step of the way until registration is complete.
Focus on Your Mission: Let us handle the legalities, so you can focus on making a difference.
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