A Pvt Ltd company established in 2010 in New Delhi. However, a lot of projects are into the development segment and hence thought that it would be best to establish a separate entity as a Non profit enterprise u/s.Section 8of the Company's Act 2013.
My queries are as follows:
a) If we are to establish this type of enterprise from scratch what are the modalities involved in the same ?
b) Is Section 25 is the best type of company to establish for our kind of development related projects or are there other types of companies engaged in this kind of activtes.
c)We intend to raise funding from external investors/companies for our social enterprise projects to enable us to scale up fast and hire resources. Is this possible?
d) What are the main legalities involved for shareholders and employees of a Section 25 company?
e) In our case we have a Finnish national who intends to be a part of this company. What are the legalities involved with respect to a Finnish foreign national being a shareholder of the company?
f) Are there any salary restrictions or cap on the shareholders of the company?
g) Are there any salary restrictions etc on employees of the company?
h) Can bonuses be disbursed to employees and shareholders ? If yes, is there a cap on this too?
i) What are the timeframes of establishing this type of company from scratch?
19 October 2014
Section 8: Formation of companies with charitable objects, etc
As per Section 8(1a, 1b, 1c) of the new Companies Act, 2013, a Section 8 company can be established for “promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object”, provided it “intends to apply its profits, if any, or other income in promoting its objects” and “intends to prohibit the payment of any dividend to its members.”.
To register a section 8 company in India, the process is similar to the incorporation of other companies (except an additional license is required). The applicant looking to start a section 8 company is required to file Form INC-1 for name availability. Once the name is approved, there is a further requirement of obtaining a license for a Section 8 Company, for which Form RD-1 is to be filed in order to obtain a license for such company. After obtaining license number, applicant can proceed further to incorporate a company by filing e forms INC-7, INC-22 and DIR-12 or e-forms INC-7 and DIR-12 as the case may be.
CAclubindia
