25 March 2024 1,973 4 minutes read
In this article we will be discussing the various forms required for the formation of a Section 8 company along with its purpose.
The fundamental goal of forming a section 8 corporation is to promote non-profit goals. As a result, it wants to use any earnings or other money to further its objectives. As a result, no dividends should be paid to the company’s stockholders. As a result, a section 8 corporation must file several incorporation forms. Furthermore, the NPO/goal of such a Section 8 company is to promote: arts, commerce, charity, education, environmental protection, science, social welfare, and so on. A Section 8 Company is a non-profit organization that is formed under the Companies Act of 2013.
Section 8 Under the Companies Act of 2013: Things to Know
- Has the promotion of trade, art, science, sports, education, research, social welfare, religion, charity, environmental protection, or any other object as one of its goals.
- Such entities cannot, however, pay dividends to their shareholders. Furthermore, such businesses use their income to further their mission and do not pay dividends to their shareholders.
Section 8 Under the Companies Act of 2013: Advantages
- Stamp Duty is not applicable
- Tax deductions for the Company’s donations under Section 80G of the Income Tax Act
- Section 8 Companies can be founded with or without share capital; if they are formed without capital, the necessary funds are raised through donations, subscriptions from members, and general public donations
- The suffix Limited or Private Limited: https://www.mca.gov.in/MinistryV2/incorporation_company.html is not necessary at the end of the name of a Section 8 company
- When compared to other non-profit organisation structures such as trusts or societies, a Section 8 Company has more credibility.
Incorporating a social cause as a Section 8 company is rather beneficial to all stakeholders and must be undertaken with the help of professionals to ensure compliance with the necessary provisions. By establishing a Section 8 Company, individuals and groups can contribute to society while enjoying the legal benefits of a corporate structure, such as limited liability protection for its members.
Section 8 Company Forms and its Purpose
Forms for a Section 8 Company are an essential part of the registration process. The most important form for a Section 8 Company is Form INC-12, which is used for obtaining a license to operate as a non-profit entity.
The primary purpose of a Section 8 Company is to promote social welfare activities such as education, health, environment, and similar causes.
- RUN / Application with ROC for Name Approval.
| The prospective Section 8 company’s name is reserved by submitting Form RUN. Additionally, before entering a name in the form, candidates can use the MCA portal’s free name search feature. Furthermore, the Registrar may reserve the name for a period of 20 days from the date of the application based on the information and documents presented with the application. |
| Section 8’s full name must include terms like Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust, and other similar terms are also acceptable. In the RUN facility, you can submit up to two names at a time and make one resubmission. The RUN fee is ₹1000/-. It’s a good idea to include the prospective company’s object clause. |
- INC-7 / Application for Incorporation of Company
The e-form INC-7 is for the formation of a new business. However, before beginning the INC-7 application, the proposed company’s name should be reserved with MCA. INC-7 must be accompanied by the following information and documents:
- All subscribers have signed the company’s memorandum and articles.
- An affidavit in Form -INC 9 from each of the subscribers and initial directors. They claim they are innocent of any wrongdoing or misbehaviour.
- Form INC 8 is a declaration that all criteria of the Companies Act have been met.
- Proof of registered office address (INC 22) (Rental agreement, sale deed etc.).
- Address and identity documents for all MOA subscribers and the company’s first directors.
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- INC-8 ‘/ Declaration to apply for PAN and TAN
- INC-9 / An affidavit from each director and subscriber
- INC-12 / Application for Issue of License of Section 8 Company.
The licence to operate as a Section 8 company is obtained by filing Form INC-12. Applicants must submit the following documents with this application:
- Form INC-13 for draft MOA.
- Form INC-14 for section 8 company to draft AOA Declaration (Declaration from Practicing Chartered Accountant)
- INC-15 Form for section company of Declaration (Declaration from each person making application)
- Estimated revenue and expenses for the next three years.
- The company’s promoters and directors are listed.
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- INC-13 / Memorandum of Association
| Section 8 company cannot employ SPICE 33 and 34, i.e. e-MOA and e-AOA. MOA and AOA must be sent as pdf attachments to SPICe-32 by Section 8 firms. |
- INC-14 / Declaration from a Practicing CA or CS
| The company’s charter, or MOA, outlines the scope of its operations. An AOA is a document that governs the company’s internal management. The MOA for a Section 8 company must be in form INC-13, while the AOA for a Section 8 company has no set format. Table F provisions can be adopted. Each subscriber must sign the company’s MOA and AOA and include his or her name, address, description, and occupation in the presence of at least one witness who will attest signature and sign and add his or her name, address, description, and occupation. |
- INC-15 / Declaration by each subscriber
- INC-16 / License to operate as a Section 8 company
- INC-22 / Notice of the location of the registered office
- DIR-2 / Consent of directors
- DIR-3 / Application to ROC to obtain DIN
- DIR-12 / Appointment of directors
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