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Section 8 Company

A Section 8 Company is a non-profit legal entity established for charitable purposes like education, social welfare, or environmental causes. It requires a minimum of two directors and two shareholders. This structure provides several benefits, including tax exemptions, strong governance, and enhanced credibility with donors.

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Section 8 Company Registration in India

Are you looking to start a non-profit organization to promote social welfare, education, or other charitable activities? A Section 8 Company is the ideal legal structure for your mission. It’s a non-profit entity that directs all its profits toward its charitable objectives, rather than distributing them to its members.

At FileMyFirm, we provide end-to-end services for Section 8 company registration in India. Our team of experts offers hassle-free and professional services to help you establish your non-profit organization quickly and efficiently. Contact us today to begin your journey.

What is a Section 8 Company?

A Section 8 Company, as per the Companies Act, 2013, is an organization formed to promote arts, commerce, science, research, education, sports, social welfare, religion, charity, or environmental protection. Unlike other companies, it uses all its profits to achieve these goals and is prohibited from paying dividends to its shareholders.

Key points about a Section 8 Company:

  • It is the modern version of the erstwhile Section 25 Company under the Companies Act, 1956.
  • Profits are strictly used for charitable objectives and cannot be distributed among shareholders.
  • It is a more credible structure for NGOs compared to societies and trusts, due to its stringent compliance framework.

Key Benefits of Opening a Section 8 Company

  • Tax Exemption: A Section 8 Company is eligible for a 100% tax exemption on its income, provided it is registered under Section 12AA of the Income Tax Act.
  • No Minimum Capital Requirement: Unlike other corporate structures, a Section 8 Company has no minimum paid-up capital requirement, offering greater financial flexibility.
  • Separate Legal Entity: It has a distinct legal identity and perpetual existence, which enhances its credibility and legal standing.
  • Increased Credibility: The strict legal and compliance framework makes it highly trustworthy in the eyes of donors, government agencies, and the public.
  • No Title Required: Unlike other companies, a Section 8 Company is not required to affix terms like “Private Limited” or “Limited” to its name.

Eligibility and Legal Requirements

To form a Section 8 Company, the following criteria must be met:

    • Promoter: A natural person who is an Indian national or a Hindu Undivided Family (HUF) can incorporate a Section 8 Company.
    • Number of Directors: A minimum of two directors for a private limited structure and three for a public limited structure.
    • Number of Members: A private limited Section 8 Company can have a maximum of 200 members, while there is no limit for a public limited one.
    • Company Objects: The company’s Memorandum of Association (MoA) must clearly state its non-profit objectives. All profits must be reinvested for charitable purposes.

Documents Required for Section 8 Company Incorporation

To ensure a smooth incorporation process, you will need the following documents:

    • Memorandum of Association (MoA) and Articles of Association (AoA)
    • Identity and address proof of all directors, subscribers, and nominees
    • Proof of the registered office address (e.g., utility bill)
    • Digital Signature Certificate (DSC) for all directors
    • A declaration from the proposed directors and subscribers.

Section 8 Company Registration Process

The incorporation of a Section 8 Company involves several steps:

  1. Obtain DSC & DIN: All proposed directors must obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) for online filing.
  2. Reserve the Company Name: Apply for a unique company name with the MCA.
  3. File Incorporation Forms: Submit the application for incorporation, including the MoA, AoA, and other required documents.
  4. Obtain a License: A license for the Section 8 Company is issued by the government, approving its non-profit nature.
  5. Receive Certificate of Incorporation: The MCA issues a Certificate of Incorporation, formally establishing the company.

Funding and Taxation

A Section 8 Company cannot accept deposits but can raise funds through donations, equity funding, and foreign contributions (with FCRA registration).

To attract more donors and maximize resources, it is highly recommended to obtain Section 12AA and Section 80G registration. Section 12AA provides an income tax exemption on the company’s earnings, while Section 80G allows donors to claim a tax deduction on their contributions.

FileMyFirm makes your Section 12AA and 80G registration seamless, helping your Section 8 company secure tax exemptions and attract more donors with ease!

Streamline Your Section 8 Company Registration with FileMyFirm

FileMyFirm is your trusted partner for Section 8 company registration in India. Our expertise and seamless online platform simplify the complex legal process, ensuring all formalities are met. Our dedicated team guides you through every step, from documentation to final approval, so you can focus on making a positive impact on society.

Contact us now to begin your Section 8 company registration journey.

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