This article gives more information on the registration of a Section 8 company, Trust, and Society, and essential information that helps form any such body.
Not every company’s motive is to gain profit for itself. Some companies are exceptional as they come forward to work towards the welfare of Society with certain charitable purposes. Law has categorised such a company as a Section 8 company. Besides a Section 8 company, two bodies, including Trust and Society, share common purposes of doing welfare to the Society. In this article, you will learn about Section 8 Company, the Documents Required for Section 8 Company, and its registration procedure apart from having basic details about Trust and Society. People often get confused with the definition of Section 8 Company, Trust and Society. Registration of Section 8 Company Online is a simple and convenient way to set up a non-profit organisation. Documents Required for Section 8 Company Registration is listed below,
Section 8 Company and Registration
As per Section 8 of the Companies Act, 2013, a Section 8 Company is one that works towards promoting arts, science, commerce, protection of the environment, religion, sports, research, education, and other similar welfare activities. Such a company applies its profit only to fulfil its objectives. Such a type of company is devoid of paying dividends to its members. The process of Registration of Section 8 Company Online involves filing an application with the Registrar of Companies.
Documents Required for Section 8 Company
Documents Required for Section 8 Company have been mentioned below:
- Digital signature certificate
- ID proof, including PAN Card and Aadhar Card
- Documents related to address proof
- Memorandum of Association
- Article of Association
- Director Identification Number (DIN)
Procedures of Registration
To have the Section 8 Company Registration,
- The central government has to accept the application made by using a form
- The Central government only accepts such an application if it fulfils all the terms and conditions imposed under the license.
- After accepting the application, the applicants have to pay the fee
- Once the fee is paid, the Registrar of Companies will register the company
Such a company gets the status of a limited company, although it does not require to include ‘Limited’ or ‘”Private Limited’ at the end of its name.
What is a Trust?
Trust is an agreement between two parties where one party agrees to transfer their property to the other, and the latter agrees to hold the property for the benefit of the other.
Trust is the oldest form of Non-Profit Organisation regulated under the Indian Trust Act, 1882.
Trust is formed to fulfil many goals, including minimising the tax, preserving the property for a minor, charity, etc. At least, 2 individuals are required to form a Trust. There are many types of Trust. However, the two main Trusts are Public Trust and Private Trust.
Public Trust is formed keeping in view the benefits of the public at large. A private Trust is formed to benefit a certain number of individuals.
Parties in a Trust
Generally, there are three parties in a Trust. They have been mentioned below
- Donor: A donor is a person who transfers his property
- Trustee: The trustee is vested with the interest to administer the property
- Beneficiary: A beneficiary is a person whose Trust has been formed for his benefit
What is Society?
A Society is a group of a minimum of 7 people who have come forward to fulfil a common charitable purpose. However, instead of being limited to charitable purposes only, it may also cater to other purposes encompassing scientific or literary fields.
Society is regulated or controlled by the provisions under the Society Registration Act 1860. Society involves a democratic process since an elected body manages it. The governing body of a Society consists of a trustee, council, committee, directors, etc. All India registration is required for the operation across the country. The members of a Society hold office for a limited period, and they can resume their office again after re-election.
Registration of the Society
To register the Society, a memorandum of association has to be filed. The memorandum of association will contain
- The name of the Society
- The purpose of the Society
- Addresses and names of the members of the governing body, councils, and directors
- A copy of rules certified by at least three members of the governing body.
After filing the memorandum of association, the Registrar will register the Society.
Digital Signature Certificate (DSC):
A Digital Signature Certificate (DSC) is an electronic form of signature used for signing digital documents and transactions. It serves as a secure and authentic way to verify the identity of the signatory in online transactions, similar to a handwritten signature in traditional paper documents. DSCs are issued by licensed Certifying Authorities (CAs) after verifying the identity and credentials of the applicant. They play a crucial role in electronic governance and facilitate secure and legally binding digital transactions, including the e-filing of documents with government authorities.
Director Identification Number (DIN):
A Director Identification Number (DIN) is a unique identification number assigned to individuals who serve as directors on the board of companies registered in India. It is mandatory for all directors, whether appointed in existing companies or proposed directors during company incorporation. DIN is issued by the Ministry of Corporate Affairs (MCA) and serves as a means of tracking and regulating the activities of directors across different companies. It helps ensure transparency, accountability, and compliance with corporate governance norms.
Registered Office Proof:
Registered Office Proof is documentation that confirms the physical location of a company’s registered office. This proof is required during the incorporation of a company and subsequent filings with regulatory authorities. It typically includes documents such as lease agreements, rental agreements, or property ownership documents (such as sale deed or property tax receipts) that validate the company’s registered address. Proof of registered office is essential for establishing the legal presence of the company and receiving official communications from government authorities and stakeholders.
Documents Required for Directors (Indian Nationals):
For Indian nationals serving as directors in a company, the required documents typically include:
- Proof of identity (such as Aadhaar card, passport, or voter ID)
- Proof of address (such as Aadhaar card, passport, or utility bills)
- Passport-sized photographs
- PAN (Permanent Account Number) card
- Digital Signature Certificate (DSC) application form
Documents Required for Directors (Foreign Nationals):
For foreign nationals serving as directors in an Indian company, additional documentation may be required, including:
- Passport (for proof of identity and nationality)
- Proof of address in the home country
- Passport-sized photographs
- Digital Signature Certificate (DSC) application form
- Any other documents as specified by the Ministry of Corporate Affairs or regulatory authorities
Documents for Shareholders:
Documents for shareholders typically include:
- Proof of identity (such as an Aadhaar card, passport, or PAN card)
- Proof of address (such as an Aadhaar card, passport, or utility bills)
- Share subscription and shareholding agreement (if applicable)
- Any other documents required by the company or regulatory authorities for shareholding verification and compliance purposes
Memorandum and Articles of Association:
The Memorandum of Association (MOA) and Articles of Association (AOA) are two key documents that govern the constitution and functioning of a company. The MOA outlines the company’s objectives, scope of operations, and relationship with shareholders, while the AOA contains rules and regulations for internal management and administration. These documents are mandatory for company incorporation and must be filed with the Registrar of Companies (ROC). They provide the legal framework within which the company operates and guide its activities, rights, and obligations. Amendments to the MOA and AOA require approval from shareholders and regulatory authorities.
Comparative Analysis of Trust, Society, and Section 8 Company
Although the basic purpose of Trust, Society and Section 8 company is almost the same, i.e., to benefit the third party, there are still many differences between these three bodies.
| Details | Trust | Society | Section 8 Company |
| Legislation | Regulated under the Indian Trust Act, 1882 | Society is regulated by Society Registration Act, 1860 | Governed under the provisions of Companies Act, 2013 |
| Members | A Trust requires a minimum of two individuals | A Society requires at least seven members. | Section 8 company requires a minimum of two directors |
| Management | To control the Trust, only one person is sufficient | Requires members | Requires directors |
| Execution | To execute the Trust, a non-judicial stamp paper is required | No stamp paper is required | No stamp paper is required |
| Borrow Fund | Trust can borrow only from settlor or donor | Society can borrow from the members | A Section 8 company can borrow from shareholders. |
| Amendment | to a Trust is possible through a supplementary trust deed. | to a Society can be made through a Memorandum of Association and rules and regulations | is possible by following the directions mentioned in the Companies Act 2013. |
| Wind-up | A Trust is generally irrevocable, and winding up may not occur | A Society can be wound up with the consensus of 3/5th members | can be wound up at the desire of shareholders. |
| Registration | Registered as NGO/NPO | Registered as NGO/NPO | Registered as NGO/NPO but enjoy the status of a limited company. |
| Cost | Low-cost | Medium-cost | High-cost |
| Registration under Income Tax Act, 1961 | Is allowed registration under the Income Tax Act, 1961. | Is allowed registration under the Income Tax Act, 1961. | Is allowed registration under the Income Tax Act, 1961. |
| Legal Right | Trustee holds the legal right of a Trust | is held in the name of Society | is held in the name of the company |
| Registration Period | The registration period of a Trust is 15 to 20 days | the period is between 20 to 25 days | the registration period is between 30 to 45 days. |
Final Thoughts
Whether it is a Trust, Society, or Section 8 company, each is formed with a common purpose i.e. the welfare of others. Each of these falls in the category of Non-Profit Organisations. However, each of these organisations enjoys its individual status and is regulated under certain provisions. After completing the Registration of Section 8 Company Online, you can enjoy the benefits of a legal entity and conduct social welfare activities. If you have any doubts on Documents Required for Section 8 Company, or society or trust, contact our experts.
FAQs
What is the minimum requirement for Section 8 company incorporation?
The minimum requirement for incorporating a Section 8 company includes having a minimum of two directors (for private limited) or three directors (for public limited), and at least one director must be a resident of India. Additionally, there must be a minimum of two shareholders for a private limited company and a minimum of seven shareholders for a public limited company.
What documents are essential for incorporating a Section 8 company?
Essential documents for incorporating a Section 8 company typically include:
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Director Identification Number (DIN) for directors
- Digital Signature Certificate (DSC) for directors
- Proof of identity and address of directors and shareholders
- Address proof for the registered office
- Consent and declaration by directors
- NOC from the landlord for using the registered office (if rented)
What is the cost involved in the process of Section 8 company incorporation?
The cost involved in the process of Section 8 company incorporation may vary depending on factors such as professional fees, government filing fees, stamp duty (if applicable), and other incidental expenses. Generally, the costs include fees for DIN application, name reservation, incorporation fee, stamp duty for MOA and AOA, and professional fees for legal and professional services.
Can a Section 8 company be for profit, or is it strictly non-profit?
A Section 8 company, also known as a not-for-profit company, is primarily intended for promoting charitable, social welfare, religious, or other non-profit objectives. It is prohibited from distributing profits to its members and must apply its income towards promoting its objectives. While it is primarily non-profit, Section 8 companies can generate surplus funds through their activities, but such funds must be reinvested towards the company's objectives and cannot be distributed as dividends.
Is an audit mandatory for Section 8 companies during the incorporation process?
An audit is not mandatory during the incorporation process of Section 8 companies. However, once incorporated, Section 8 companies are required to comply with statutory audit requirements prescribed under the Companies Act, 2013. This includes conducting an annual audit of the company's financial statements by a qualified auditor appointed by the company's board of directors. The audit ensures transparency, accuracy, and compliance with legal and regulatory requirements.
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