Section 8 Company

All You Need to Know About Section 8 Organization Documents for Registration

In India, the Section 8 Organization is governed by the Indian Companies Act, 2013 and the rules and regulations enacted thereunder. Read this article to learn about the Section 8 Organization documents for registration.

Section 8 Company is a company licensed under the Companies Act, 2013. The main object of this is to promote research, religion, charity, commerce, art, science, sports, education, environmental protection, or any other object, provided that the profits, if any, or other income is used to promote only the objects of the company. Section 8 Company documents hold a significant role for every business.

Section 8 Company

Section 8 Company is registered for charity or non-profit reasons. This Company, on the other hand, is similar to a Trust or Society; the difference being that a Section 8 Company is registered with the Central Government’s “Ministry of Corporate Affairs (MCA),” whereas Societies and Trusts are registered with the State Government. Compared to Trust or Society, this offers several advantages, including more trust among funders, government agencies, and other stakeholders. Furthermore, a crucial aspect of this Company is that its name can be incorporated without the words “Limited” or “Private Limited”.

Advantages of Section 8 Company

  • Section 8 Company offers more flexibility and systematic execution
  • It avoids the precise registration procedure and the physical presence of the partners or members
  • The paid-up capital has no minimum or maximum limit
  • It gives tax benefits under sections 12AA and 80G of the Income Tax Act
  • It makes all partners or members of any corporation or firm liable for access to the Directorship.

Documents Required for Section 8 Company Registration Process

Below are the Section 8 Company documents required while registering a company :

Under Section 7(1) e Rule 16:

  1. An identification document such as a PAN card, Aadhar card, driving license or passport is required
  2. Address evidence that is both permanent and current, such as the latest electricity, telephone, or mobile bill that is no older than 2 months
  3. Disclosure of other firms’ directorships regarding Section 2 (69)
  4. A notary or a banker must authenticate the specimen signature and picture.

Under Section 7(1) Rule e Rule 16: Documents from a Subscriber

  1. Educational qualifications
  2. Occupation

Under Section 7(1) Rule 15:

  1. Affidavit inform INC-9
  2.  Affidavit for now- acceptance of a deposit.

The directors are needed to file the documents listed below:

  • INC-9 is informed by affidavit
  • Affidavit for Deposit Non-Acceptance
  • Along with the ID and address evidence, consent to function as a director in DIR-2
  • Other documentation includes his email address, phone number, pan number, address proof, and a list of the firms to which he belongs
  • Certificate of Business commencement
  • A business incorporation certificate.

Section 8 of the Companies Act of 2013: Total Reliefs and Exemption for Companies

  • Under Section 8 companies, the directorship is exempt from the most significant number of directorships indicated in Section 165 of the Act
  • A general meeting was held by providing notice of 14 days
  • Instead of four meetings each year, a Section 8 business would convene at least one meeting every six calendar months
  • The recording of minutes of board meetings, general meetings and other resolutions must not be subject to application to the section 8 Organization. However, meeting minutes may be produced within 30 days after the meeting’s result in circumstances where the firm’s articles provide confirmation via the minute distribution procedure
  • A section 8 firm would be one of its members
  • Section 149(1) of the Act does not apply to Section 8 companies since they are not required to engage an independent director. Because of the reasons stated above, the Audit Committee under Section 8 will not be required to include independent directors in addition to its board members
  • Section 8 businesses are exempt from the requirement to appoint a trained CS professional as their company secretary
  • Section 8 enterprises are exempt from forming a Remuneration Committee or a Stakeholders Committee.

Directors in a Section 8 corporation

  1. Section 149(1): It requires a minimum of three directors for a public limited company and two directors for a private limited company, with a maximum of fifteen directors. However, there is no prescription for a section 8 business.
  2. The second proviso to section 149(1) mandates the appointment of a woman director in a specific class of firms.
  3. Section 149(3):  All companies must have resident directors.
  4. Section 165 of the Companies Act, 2013: It states that directorships in Section 8 companies will not be totaled up when the total number of directorships is computed.
  5. Section 149(1) of the Companies Act of 2013: This stated that Section 8 companies are not required to nominate an independent director and are exempt from any subsequent rules relating to independent directors.
  6. According to Section 149(3) – Section 8, a corporation must have at least one Resident Director, i.e. a director who has lived in India for at least 182 days or more in the preceding calendar year.

Total Number of board meetings and their quorum

Section 8 corporations must hold at least one meeting half-yearly, and the quorum for board meetings must have eight directors or one-fourth of its entire strength, whichever is smaller. However, the quorum must consist of at least two people.

Section 8 Company Registration Fee

The following are the registration fees for Section 8 company registration:

  1. DIN – 3000 & DSC
  2. 1000 MoA & AoA & Government Fees & Incorporation Fees – 6000-8000* Notary and Stamps – 2000 
  3. Professional Fees – 8000-10000

Annual compliance with the Firms Act 2013 for Section 8 companies

  • A minimum of two board meetings must be held each year.
  • Keeping Accounting Records
  • Financial Statement Preparation
  • An audit is required
  • Filing of income tax returns
  • Financial statements in form AOC 4 must be filed
  • An annual return must be filed every year, along with other e-filing forms such as MGT 7
  • Additional registration requirements include 12AA, 80G, and so on.

Conclusion

As a result, Section 8 Companies are created with a charitable motivation and work on the pillars of not generating profits for themselves but instead assisting others in meeting their necessities. Because most of these concerns are not addressed by government policy for various reasons, there is a demand and space for groups ‘that attempt to solve those.’ Thus, the concept of the non-profit organisation emerged.

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