Incorporating a Section 8 organization is a great way to get your business off the ground. But what is the process? This guide will walk you through everything you need to know, from filing the paperwork to getting approval from the government. We'll also give you some tips on making the process go smoothly. Read on to find out more.
We can break down the process of incorporation of a section 8 company into the following steps: Create a business plan, Register your business name, Apply for incorporation and Obtain your Certificate of Incorporation. Each step should be carried out with utmost care to avoid any setbacks or complications that may arise later in starting your business. The guide will walk you through these steps and help you follow the correct procedure for Incorporation of Section 8 Company.
The primary aim of registering a Section 8 Company is to promote non-profit objectives, such as trade, art, commerce, education, charity, environmental protection, sports research, social welfare, and more. At least two directors are needed to register a Section 8 organization, and there is no requirement to obtain a minimum amount of paid-up capital to establish such a company.
What Are Section 8 Companies?
Section 8 companies are privately held companies that are not open to the public for investment. These private companies can be started with only one shareholder and established in any state in the United States. Section 8s are often used by founders or family members who want to keep the company within their family or close circle of friends. There is no requirement for these types of businesses to go public, but there are some limitations when raising funds from outside investors.
Steps For Incorporation of Section 8 Company
Start With a Business Plan: The first step to incorporation is to write a business plan. A business plan will help you organize your thoughts and think through the steps you need to take to start your company. It will also help you cover the areas that are necessary for incorporation. You should include everything from how much money you need and how long it will take to get started to what type of legal entity you want and which service providers might be a good fit for your business.
Get Your Business Licence: Getting your business license is the first step in starting your section 8 company. It’s also essential to keep your license up to date with any changes in your business, so you should ensure that you’re aware of all the steps in this process.
There are some of the things that need to be taken into account when getting your business license. For instance, you will need a name for your business and an address where it can be located. Next, you’ll have to file articles of incorporation and by-laws.
Then comes the more difficult part: choosing what type of corporation you want your business to be. Again, there are many different types, each with pros and cons. Finally, you’ll need to decide how much control you want shareholders to have over decisions and how much money they would invest.
Register Yourself as a Business: Registering yourself as a business is the first step to incorporation. Next, you’ll need to register a business name, file for a business license, and get an Employer Identification Number (EIN). Plenty of resources are available online or through your city’s local government if you’re unsure where to begin. Once you’ve registered your business, you’ll need to submit a Form SS-4 to the IRS and apply for tax-exempt status if applicable.
Please Register Your Location and Rent Office Space/Shop: When writing your location, it is essential to have the name of your company registered with the local government. It not only gives you an official address for correspondence and tax purposes but also legitimizes your business. It is worth investing in a good location as office space involves additional costs. You will need to pay rent and utility bills, which is advisable to factor into your start-up costs.
Register for GST (if applicable): To register for GST, you need to go to the Australian Tax Office (or call them at 13 28 66) and fill out the ABN application form. You’ll need your ABN before you can complete an application. You will also need to provide details about your business, such as its name and address, what it sells or does, and who it’s trading with or providing services for.
Employee Registrations (EPF, M&E): Employee registrations for EPF, M&E etc., are mandatory for every company. To register your employees, you need their National Identity Number (NIN) and the CID number generated by the company. You can also get details about the procedure by visiting the EPF website. Once registered with EPF, you must notify them through an application form on their website.
Every week they generate an Employer Report that lists all employers who have not submitted this form and includes both active and inactive employers. If you do not submit this form within 15 days of becoming an employer, the authorities will impose penalties on your company.
Get Compliances Done: Getting all the submissions done. These include, but are not limited to, getting an RCN number registering the name, and It will require some time and resources on your part. But once you have completed these steps, you can move on to other factors, such as preparing documents for compliance, selecting a bank account for your new business, and more.
Incorporation of Section 8 Company Guide: Forms Required for Section 8 Company Registration
To register a Section 8 company in India, the following forms are required:
- SPICE+ – For an application for Incorporation of Company
- INC 12 – For an application for a License
- INC 13 – To file Memorandum of Association
- INC 14 – For declaration from a practising Chartered Accountant
- INC 15 – For declaration from each person making the application
- INC 16 – To file for a license to incorporate as a Section 8 Company
- INC 22 – To indicate the situation of the Registered Office
- DIR 2 – To showcase the consent of the Directors
- DIR 3 – To apply to ROC to get DIN
- DIR 12 – For the appointment of Directors
Benefits of Section 8 Company Registration
Section 8 companies, also known as non-profit organizations (NPOs), are registered under the Companies Act, 2013 to promote charitable objectives such as education, art, science, religion, social welfare, etc. Here are some benefits of Section 8 company registration:
Limited liability: The liability of the members of a Section 8 company is limited to the amount of their share capital. This means that the personal assets of the members are not at risk in case the company incurs losses or faces legal action.
Tax benefits: Section 8 companies enjoy several tax benefits such as exemption from income tax, stamp duty, and registration fees.
Credibility: Section 8 companies enjoy better credibility among donors, volunteers, and beneficiaries compared to other forms of non-profit organizations.
Perpetual succession: A Section 8 company has perpetual succession, which means that the company continues to exist even if its members change.
Easy to raise funds: Section 8 companies can raise funds easily through donations, grants, and other sources. They can also issue shares to their members as part of a membership plan.
Conclusion
The process of Incorporation of Section 8 Company is not difficult to follow. However, you must know all the steps and provide accurate information. If you do this, the incorporation process should go smoothly, and your section 8 company will be up and running in no time.
Vakilsearch is a leading legal service provider in India. They are also one of India’s most trusted providers of incorporation services. Vakilsearch is a leading provider of incorporation services for section 8 companies in India. They have an experienced team with qualified professionals who can guide you through the process.
Vakilsearch provides a wide range of services like the incorporation of a section 8 company, drafting, and registration of agreements, drafting and registration of contracts, drafting and registration of memorandum or articles of association, drafting and registration of partnership deed for LLP, drafting and registration for the formation of companies under the Companies Act 2013. So consider checking out Vakilsearch if you plan to incorporate a section 8 company.
FAQs
Is it necessary to obtain permission from the central government?
Yes, Section 8 companies are required to obtain permission from the central government before incorporating the company.
Can NRIs/Foreign Nationals serve as directors of Section 8 companies?
Yes, NRIs/Foreign Nationals can serve as directors of Section 8 companies, subject to certain conditions.
Is a digital signature required to complete registration procedures?
Yes, a digital signature is required to complete the registration procedures for a Section 8 company.
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