Easy Office
LCI Learning

Section 8 Company: Incorporation & Myths

ARISANKALA MANISH KUMAR , Last updated: 26 October 2021  
  Share


Section 8 companies are those companies which are incorporated with an objective to promote arts, commerce, education, charity, environment protection, sports, welfare, medicines, etc. The income of the company or money raised by doing events, receiving donations cannot be used for paying out dividends among the members of the company. The money raised should be used promotional and charitable purpose.

Section 8 companies obtain their incorporation certificate from the Central Government and are liable to carry on according to rules stated by the government. If the company fails to fulfill the rules and compliances stated by the government it may lead to winding up of the company by the order of the government.

Section 8 Company: Incorporation and Myths

Procedure of incorporation of a Section 8 Company

  1. First of all you need to reserve the name of the proposed company by filing the Part A of the Spice Plus form. Choose the nature of business activity and file two names of your choice if the names get rejected by the CRC them again file with two new names within 15 days from the date rejection.

  2. Apply for Digital Signature of all the members and directors. Note: All the members and Directors should have DSC because all the forms of incorporation are online.
  3. Once the proposed name gets reserved you get a window of 20 days to file the incorporation form which Spice Plus along with concerned attachments. Spice Plus is an advanced electronic form which is a combination of 8 forms in one. You can apply for all the following with this one form:
  • Name Reservation
  • Apply for Director Identification Number (DIN)
  • PAN Application
  • TAN Application
  • Incorporation
  • ESIC Registration
  • EPFO Registration
  • GSTIN Registration
  1. After that you need to file the Part B of the Spice + form. Here you need to provide the details of the all the members and directors. What will be the authorized share capital, paid-up share capital and registered address of the company. All these details need to be filed with proper attachments.
  2. Fill the AGILE form for procuring the GSTIN.
  3. After all the steps above attach the concerned signatures and upload it to MCA website.
  4. After the company gets approval form ROC and the Certification of Incorporation, then the company needs apply seeking approval for commencing the business (INC-20A) within 180 days from the date of incorporation.

Is it mandatory for Section 8 Company to add suffix like private limited or limited?

The Section 8 Companies should not add any suffix like limited or private limited but as per the rule 8(7) of Companies (Incorporation) Rules 2014, the name of the company should contain terms like Foundation, Trust, Forum, Association, Chambers, Federation, Confederation, etc.

 

Documents and Details required for registration Section 8 Company

  1. Digital Signature of the members.
  2. Director Identification Number (DIN).
  3. Memorandum of Association.
  4. Articles of Association.
  5. Passport size photographs.
  6. Email-id & Mobile no. of Company and Members
  7. Pan Card.
  8. ID Proof of all the members (Voter ID/Passport/Driving License).
  9. Details of the First Directors.
  10. Address Proof (Electricity Bill, Property Tax).

Myths about incorporation of Section 8 Company

1. Affidavit of the directors in form no INC 15 is required

A self-declaration with regards to the matter stated in form no INC 15 is sufficient and is accepted.

 

2. INC 33 and 34 are applicable in Section 8 Company

Physical copy of the MOA and AOA duly signed by the members and witnesses (Professional) along with estimated income and expenditure statement of three years should be attached with the form.

3. Memorandum and Articles of Association should be notarized

Memorandum and Articles of Association may not mandatorily be notarized.

4. The government fee is too high

Most of the states in India the stamp duty of Section 8 Company with respect to stamp duty of MOA and AOA are very nominal.

The author can also be reached at pcsmanishkr@gmail.com


Published by

ARISANKALA MANISH KUMAR
(Practicing Company Secretary)
Category Corporate Law   Report

  1714 Views

Comments


Related Articles


Loading