Characteristic of Section 8 Company Registration
The basic Characteristic of Section 8 Company Registration are:
- Registration Under: Companies Act, 2013
- License to be applied to MCA.
- A Minimum of 2 Directors for a Private Limited Company and 3 Directors for Public Limited Company must be there. The maximum limit is of 15 Directors. More than that can be appointed after passing a special Resolution in a general Meeting.
- At least 1 director must be a resident of India
- Whatever amount of initial capital has been proposed for the Company, it must get invested in the Company within 2 months.
- The ownership of the property lies in the name of the Company and it can only be sold as per the rules mentioned under the Companies Act.
- Can be wind-up only by following the bye-laws of the society.
- Annual filing of accounts, statements and the returns of the company with the ROC are necessary to meet the compliance required.
- All the Directors must have their valid DIN (Director’s Identification Number) & DSC (Digital Signature Certificate).
- Pays no dividend or income to its members
- With this license, the company becomes eligible for certain exemptions from provisions of law and have concessions in the fee.
- If the proposed Section 8 Company has been registered as a private limited then a minimum of 2 promoters are required.
- But if it is a public limited Section 8 Company then a minimum of 7 promoters must be there.
Section 8 Company Registration can be done through Palankarta.
Benefits of Section 8 Company
Following are the benefits of forming a Section 8 Company
- Distinct Legal Identity
- Zero Stamp Duty
- No Minimum Capital Requirement
- Section 8 Company does not need to suffix Limited or Private Limited, next to its legal name. It can be registered with names that have words like Association, Society, Council, Club, Charities, Foundation, Academy, Institute, Organisation, and Federation.
- Requirements of Companies Auditor’s Report Order or CARO do not apply to this type of company.
Many Tax Benefits
- are more reliable than all other forms of charitable organizations.. The rules on managing the profits and losses of the company make these companies trustworthy.
- Those donating to a Section 8 Company are eligible for tax exemptions u/s 12A and 80G of the Income Tax Act.
- A registered partnership firm can become a member in its individual capacity and obtain Directorship.
Services Offered by Us
Following are the services provided by us at the time of registration.
- DIN for 2/3 Directors
- Digital Signature For 2/3 Directors
- Company Name search & approval
- MOA and AOA
- Registration Fee
- Documentation for obtaining licenses
- Company Pan Card
- Company TAN
- Annual Compliance Guidance
- Maximum Time Required (45 days*)
Procedure for Registration
Fill Enquiry
Form
Associate will call
and discuss in length.
Make
Payment
Complete Documentation
& Requirements
Registration
Complete
Why Palankarta?
Experienced Financial
Professionals
Deliver Service
on Time
Cost
Effective
Assured Customer
Satisfaction
No Hidden
Fees / Charges.
Frequently Asked Questions
FAQ
General Questions
Any person or Number of associated persons intending to register a limited liability company for objects specified below can opt to apply for Company Registration or Company Formation under Section 8. However the following have to be proved to the satisfaction of the Central Government that:
- Promotion of commerce, art, science, sports, education, research, and social issues like social welfare, religion, charity, protection of the environment or any other object is also included.
- The company after incorporation intends to apply its profits, if any, or other income in promoting such objects only;
- Payment of Dividend to the members should be prohibited by the company.
No. Rule 20(1) of the Companies (Incorporation) Rules, 2014 provides that only a limited company registered under this Act or under any previous company law shall make an application to the Registrar for the issue of license. Therefore, a company with unlimited liabilities cannot be registered as a Section 8 Company.
Yes. As per rule 8(7) of the Companies (Incorporation) Rules, 2014, for the Companies under Section 8 of the Act, the name shall include the words foundation, Forum, Association, Federation and the like etc.
Under the Section 2(42) of the Companies Act, 2013 the term “Foreign Company” is defined as any company or body corporate incorporated outside India which–
- Has a place in India where business is conducted, whether bought by itself or through an agent, through physically or through online.
- Is conducting any business activity in India.
- Now since a Company or a body corporate incorporated outside India for doing not for profit activities, which has opened a branch/liaison office in India, cannot fall in the definition of a foreign company as a business activity is missing.
Therefore, such a company cannot be termed as a foreign company. However, subject to compliance with FEMA regulations, it can open branch/liaison offices. Such not for profit companies or bodies corporate incorporated outside India can promote and register a Section 8 Company in India as a distinct entity.
In terms of section 8, any person or an association of persons intending to register a limited liability company for objects specified in section 8(1)(a), subject to the restrictions provided in section 8(1)(b) and (c), can opt to apply for registration of Section 8 Company.
The term “person” has not been defined in the Companies Act, 2013. Section 2(41) of the General Clauses Act, 1897 provides that “person” shall include any Company or association or body of individuals, whether incorporated or not. Section 11 of the Indian Contract Act, 1872 provides that every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is sound mind and is not disqualified from contracting by any law to which he is subject.
Therefore a Co-operative society can be regarded as a Person and thus capable of becoming a subscriber of a company including Section 8 Company.
No. As per proviso to section 2(85), section 2(85) does not apply to a Section 8 Company and accordingly, a Section 8 Company cannot be treated as a small company. Likewise, a small company on conversion to a Section 8 Company shall cease to be a small company.
Yes, a Section 8 Company can be converted into any other company including OPC as prescribed under Section 8(4)(ii) read with Rules 21 and 22 of Companies (Incorporation) Rules, 2014. This is further subject to restrictions and compliances as per other applicable laws including the Income-tax Act, 1961.
Yes. Section 8(1) of the Companies Act, 2013 allows person or association of persons to be registered as a Section 8 Company on the fulfilment of certain conditions and procedure as prescribed therein. The term “person” has not been defined in the Companies Act, 2013. Section 2(41) of the General Clauses Act, 1897 provides that “person” shall include any Company, or association or body of individuals, whether incorporated or not. Accordingly, a Limited Liability Partnership is a person. Therefore, it can be registered/ converted as a Section 8 Company.