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A Section 8 company registration under the Companies Act, 2013 or a Section 25 Company as per the Companies Act,1956 is an organisation registered with an objective of promoting the fine arts, science, literature, or knowledge sharing for a purposeful matter or for charity. Section 8 companies are regulated through the Companies Act, 2013. These are the limited companies established under the Companies Act. The Government grants these companies an exclusive license under Section 8 Companies Act. There are three main conditions for granting the license.
Company Name Reservation: ₹1000/-
Digital signature registration & DIN: ₹3000/-
Notary and stamps: ₹2000/-
MoA & AoA & Government Fees & Incorporation Fees: ₹6000/- to ₹8000/-
Professional Fees: ₹8000/- to ₹10000/-
The companies registered under section 8, do enjoy certain benefits. The following are the advantages of section 8 company incorporation over other modes of online NGO registration:
Section 8 company registration may accept public donations but is not permitted to obtain capital through deposit Some of the methods it can use to raise money are listed below:
For section 8 company incorporation procedure, the following criteria must be fulfilled:
The name provided for the sec 8 company incorporation should be short, simple, unique, include the right suffix, project the motif of the NGO and so on. It is necessary to officially register and approve the company's name. This assists in avoiding any copyright concerns and ensures that no other section 8 companies have already been registered under the same name. To obtain approval, a Form INC-1 application must be submitted to the company's Registrar (Central Registration Centre – CRC of Ministry of Corporate Affairs). The applicant will need to submit six unique names for name approval in order to reduce the likelihood of name recurrence. Following approval, the name is valid for up to 60 days. The recommended names must include words like foundation, association, forum, council, chambers, etc. in accordance with the Company (Incorporation) Rules, 2014 in order to be accepted as a legitimate section 8 company name.
There are three major steps in incorporating a Section 8 company apart from the document collection, preparation and drafting. They are:
If the Section 8 Company Registration violates the Act's legal requirements, the Government will revoke it. The licence may be revoked if the Company's goals are mishandled or inconsistent with the ones that were established. A firm or other entity that violates the rules will be subject to a fine that starts at ₹10 lakh and can reach ₹1 crore. The Company's Officers & Directors who violate the terms will be subject to a fine of at least ₹25000 and up to ₹25 lakh, or both.
There is a general notion that a Section 8 company need not pay tax as they work towards the welfare of the public at large. But this is not true. A Section 8 company, like any other legal entity, is liable to pay tax. In order to be exempted from Tax, a Section 8 company is required to obtain certification for the said exemptions such as Section 12 A, 80G etc. from the Income Tax Authorities.
NIT, Srinagar, Registers their “Greenovator Incubation Foundation” as a Section-8 Company
Sept 23, 2020
The National Institute of Technology (NIT), Srinagar, registered its “Greenovator Incubation Foundation,” as a section-8 company to encourage more entrepreneurs, startups and promote innovations within the region. The “Greenovator Incubation Foundation” is also India’s first Green Technologies Incubation Centre.