Section 8 Company
Registration

Section 8 Company Registration


A Section 8 Company, formerly known as a Section 25 Company under the Companies Act, focuses on promoting fields like arts, education, sports, research, and environmental protection, among others. Unlike regular companies, Section 8 entities don't aim for profits; they're purely charitable. They don't require a minimum paid-up capital and offer limited liability, safeguarding members' assets. However, these companies need a license from the Central government to operate.

Characteristics

  • A Section 8 Company focuses on charitable purposes and receives various benefits and exemptions.
  • The company's name typically ends with "foundation," "federation," or "electoral trust."
  • Section 8 entities have the authority to end their operations either voluntarily or by the Central government's order.
  • If they violate regulations, these companies may face penalties or even imprisonment.
  • When registering, Section 8 Companies are exempt from paying high fees and stamp duties.
  • They benefit from having separate legal standing and can exist indefinitely.

Pre-requisites


  • For a Section 8 Company, having a minimum of two directors and shareholders is mandatory.
  • The company must have a registered office address in place.
  • Each subscriber and director should possess a Digital Signature Certificate (DSC), and the directors are required to obtain a Director Identification Number (DIN).
  • The auditor provides the necessary declaration.

Documents required for section 8 company registration


    For an Indian citizen intending to be a Director or Shareholder:

  • PAN card
  • Aadhaar card
  • Address proof
  • Passport size photo.

For a foreign national aspiring to be a Director or Shareholder:

  • Passport copy
  • Address proof copy
  • Nationality proof copy
  • Two passport-sized photos

Register office documents

  • If the place is rented, provide the rental agreement.
  • Submit an electricity bill as proof of address.
  • Obtain a No Objection Certificate (NOC) from the landlord to conduct operations.

Procedure to register

Step 1: Name Application
Begin by submitting an application to reserve the company's name with the ROC.

Step 2: Name approval/rejection
After receiving the application, the CRC will either accept or reject the proposed name.

Step 3: Application for DSC
Application Obtain a DSC for all subscribers and Directors of the company.

Step 4: Preparation of MOA and AOA
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) and ensure that the digital signature certificates are attached to both documents.

Step 5: Forms and Documents filing
File the application forms for registering a Private Limited company, including the MOA, AOA, and other required documents. Pay the prescribed fees along with the submission.

Step 6: Certificate of Incorporation
Once the ROC is satisfied, they will issue the Certificate of Incorporation. Additionally, the company will be allotted DIN (Director Identification Number), PAN (Permanent Account Number), and TAN (Tax Deduction Account Number).

FAQ


No. Company with unlimited liability cannot have registration as Section 8 Company.

Given compliance with FEMA regulations, a Section 8 Company can establish branch offices. These non-profit entities from abroad can register and endorse Section 8 Companies as distinct legal entities within India.

Yes! A Section 8 Company has the option to convert into another type of company, such as an OPC (One Person Company). This conversion process is outlined in Section 8(4) (ii) along with rules 21 and 22 of the Companies Rules 2014.

Yes! According to Section 8(1) of the Companies Act 2013, companies of other types are allowed to register themselves as Section 8 Companies.

Yes, a Section 8 Company can act as the holding company for another company.

Certainly! The Articles of Association (AOA) for a Section 8 Company can include an entrenchment clause, as per the provisions outlined in section 5(3).

Yes! Any individual, including NRIs (Non-Resident Indians), can become a member of a Section 8 Company. Moreover, as per Section 8 of the Companies Act 2013, firms are also eligible to be members of a Section 8 Company.

Yes! Any individual, whether an Indian citizen, NRI, or a foreign national, is eligible to become a Director of a Section 8 Company. The person must be a natural individual, of sound mind, above 18 years old, and possess a Director Identification Number (DIN).