How to register section 8 company registration in Madurai

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How to register section 8 company registration in India

A company is referred to as a Section 8 Company when it registers as a Non-Profit Organization (NPO) i.e. when it has Arts, Commerce, Education, Charitable Organization, Environmental Protection, Sports, Science, Research, Social Welfare, Is intended to promote religion and its purpose (if any) or to use other income to promote these objectives. Here, we discuss about the topic on How to register section 8 company registration in Madurai. Here a clear note about this topic below.

The proceeds of the NPO cannot be used to pay dividends to the members of the company and should be for the promotion of charitable purposes. Such companies obtain an investment certificate from the Central Government and are responsible for complying with the rules laid down by the Government.

section 8

According to the rules, failure to comply with the obligations stated by the Central Government may result in termination of the Company on the orders of the Government. In addition, strict legal action will be taken against all members of the company if the intentions set by the company registration prove to be bogus.

Features of a Section 8 Company

A Section 8 company includes the following specific features that most other types of companies do not have:

Charitable Objectives: Section 8 Companies do not aim to make a profit. Their motives are full of service in nature. They target other factors like science, culture, research, sports, religion, etc.

No minimum share capital: Section 8 companies unlike all other companies, do not require a fixed minimum paid-up share capital

Limited Liability: Members of these companies may have limited liability partnership. Their responsibilities cannot be unlimited under any circumstances.

Government License: Such companies can operate only if they have a license from the Central Government. The government can also revoke this license.

Privileges: Since these companies have service-oriented objectives, they have been given many benefits and exemptions by the Companies Act.

Organizations as Members: Article 8 allows companies to become members of these companies, except for individuals and associations of individuals.

Section 8 Company Formation

An individual or an association of persons may apply to the Registrar of Companies using the forms required to form a charitable company under section of the Companies Act. The Central Government, if satisfied, may accept such application on any terms and conditions imposed under the license granted by it. Once accepted, the Registrar of Companies will register the company registration after the applicants have paid all the required fees. All the privileges and responsibilities of limited companies apply in this case. Also, these companies do not need to include the words “Limited” or “Private Limited Company” in their names, as all other companies have to do.

Since the existence of such companies depends on the license granted to them, they cannot modify their memorandum or articles of association without the approval of the Central Government. They cannot deny the license.

Required documents for Section 8 Company

  • Documents required
  • Director’s ID proof
  • Proof of director’s address
  • Director’s photo
  • Qualification of Director
  • Valid contact no.
  • Valid mail id
  • Proof of residential address
  • Announcement by the Director
  • Company name
  • Of the main business of the budget / company
  • Proof of company address
  • Details of nominees

Process of section 8 company registration:

Application for name availability in SPICe + form

Apply for name availability through the Spice + Form feature. Section 8 company must have words like Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust in its name.

The applicant can give two names at a time and submit only one in the Spice + form.

Preparation of MOA and AOA

The Memorandum of Association acts as the company’s charter and clears the company’s area of ​​activity. While an article of the organization of the company registration states about the internal management of the company.

Section 8 Use the INC-13 form to file the MOA of the company, however, no section 8 mentions the constitution suggested for the AO of the company.

Each customer is required to sign a Memorandum and Association Articles which must also provide their name, address, description and occupation, if any, in the presence of at least one witness confirming and signing up to join. Name, address, description and occupation

Spice + form filling

Once you get the approval of the Central Government it is time that you go one step further and files a Spice + form.

Benefits of Section 8 company registration:

1) Tax exemption

Numerous tax exemptions are granted to clause companies, especially donors who are contributing to section 8 companies, they can claim tax exemption against donations made to section 8 companies.

2) No minimum capital requirement

Unlike other institutions such as the public limited to the minimum capital requirement, there is no fixed limit on Section 8 companies, but the capital structure required for the development of the company registration can be changed at any stage.

3) No stamp duty is payable

A Section 8 companies are exempted from payment of stamp duty applicable for registration applicable in case of other constitutions such as private closure limited or public limited company.

4) Separate legal entity

A Section 8 company also has its own distinct identity like the constitution of other companies, and has its own distinct legal status from its member. A Section 8 company also has a permanent existence.

5) Reliable

Article 8 the company has more credibility than any other non-profit organization that can be a trust or a society. It is licensed by the Central Government. It has more stringent rules such as any change in MOA and AOA; Section 8 can take place at any stage or situation in the company. A Section 8 company has a more reliable image than other legal formats due to its strict adherence to operations.

6) No title required

Unlike the private limited company or public limited company name requirements, a section company is not required to use a suffix next to its name.

Conclusion

Not all companies aim to make a profit by trading and commercializing. Many companies have primarily charitable and for-profit objectives. Such companies are referred to as Section Companies as they are recognized under Section 301 of the Companies Act. These companies dedicate all their income and profits to the achievement of their objectives.