Section 8 Company

SECTION 8 COMPANY

According to the new Companies Act, 2013 Section 25 has been re-named as Section 8.

Section 8 Company registration aims at the promotion of non-profitable objectives which include trade and commerce, charity, education, social welfare, etc. Registration of section 8 doesn’t ask for a minimum paid-up capital though requires a minimum of 2 directors.

Under the Company Act, 2013, in India, any Non-profit organization can register under the title of Registrar of societies or under a Non-profit company. In case if the company gains any profit, it will be utilized for the promotion of company objectives and won’t be shared among the shareholders.

Who can apply for it?

Any individual or an organization aiming at the below-mentioned criteria can register under Section 8 company. All these objectives must satisfy the confirmation of the Central Government.

Aiming at the promotion of science, commerce, education, art, sports, research, charity, social welfare, protection of the environment, etc.

Aiming at the intention to invest all the profits gained or the revenue generated after the incorporation in the promotion.

If and only if the company is not aiming to share any dividends to its shareholders

Name Approval

Along with the follow-up for obtaining DSC, one can apply for the name approval, the procedure may take 24-72 hrs. Suggested names for the company registration should be preceded with words such as foundation, forum, association, federation, chambers, council, electoral trust, etc. Memorandum of Association and AOA (Articles of Association), documents including INC12 filed with the ROC are drafted after the name approval.

It is mandatory to sign and mention the name, description with address, and occupation in the MOA and AOA subscription. There must be a witness present who shall attest to the signature.

Steps for incorporation

To procure the DSC of the proposed directors of Section 8 company after obtaining the DSC, file form DIR 3 along with ROC to get the Director Identification Numbers. When the DIR 3 is approved, the ROC will distribute the Director Identification Number to the proposed Director. The process to file Form INC 1 with ROC is indispensable on the application for a company name.

Subsequently, it is fundamental to file Form INC 12 after the approval on the application of the license for the Section 8 Company.

A license under section 8 will be distributed in Form INC 16, after the approval.

After obtaining the license, along with the affidavits, KYC, declarations, consent letter, draft MOA, and AOA File SPICe Form 32 with the ROC for the incorporation.

Thus, ROC will issue a Certificate of Incorporation once convinced with submitted documents and forms.