Section 8 Company Registration - NGO
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How To Register A Section 8 Company?
Registering a Section 8 Company is quick, easy, and can be done online with Legalguard.in in 3 simple steps.
We help you obtain digital signature certificate.
We draft and file the documents required for registration (MoA, AoA & Declarations).
We help you with the post-registration formalities and compliances.
NGOs can be registered in India in 3 forms i.e. Trust, Society or Section 8 Company. Section 8 Company is the most preferred form.
Section 8 Company - An Overview
A Section 8 company under the Companies Act, 2013 or a Section 25 Company as per the Companies Act,1956 is a non-profit organization registered with the objective of promoting the fine arts, science, literature, or knowledge sharing for a purposeful matter or for charity. These are the limited companies established under the Companies Act. The Government grants these companies an exclusive license under the Section 8 Companies Act. The three main conditions for granting the license are:
- The company should form for a charitable purpose.
- Income and profits should be used for these objects.
- The company should not pay any dividends to its members.
What Gives Edge to Section 8 Company Over Trust and Society
Trust - No Govt. Website for Online Verification
Society - No Govt. Website for Online Verification
Section 8 - Can be verified on MCA Portal
Trust - Name can be copied by others, which creates hurdles in making a separate identity
Society - Name can be copied by others, which creates hurdles in making a separate identity
Section 8 - There can be only 1 Section 8 Company of 1 name in India
Level of Operations:
Trust - National level, but it does not have a registration certificate, hence creates doubt in minds of people (including foreigners planning to donate)
Society - Complicated process of registration of the national level society
Section 8 - National level
Trust - Less preferred by Companies required to do CSR
Society - Less preferred by Companies required to do CSR
Section 8 - More preferred by Companies required to do CSR
Checklist for Registering a Section 8 Company in India
As defined under the Companies Act 2013, we have to ensure the requirements of the following checklist
A private limited company must have at least two directors and at most, there can be 15 directors. Among all the directors in the company, at least one must be a resident of India. A private limited company can also be registered with only 1 director but that is called one person company (OPC).
The name of your business must be unique. The suggested name should not match any existing companies or trademarks in India. The name must have the words "Foundation, Forum, Federation, Association or Council".
Minimum Capital Contribution
There is no minimum capital amount for a company. A company can be registered even with a capital of Rs. 1,000/-
The registered office of a company does not have to be a commercial space. Even a rented home can be the registered office.
Documents Required for Section 8 Company Registration
In India, Private Limited company registration cannot be done without proper identity and address proof. These documents will be needed for all the directors and the shareholders of the company to be incorporated. Listed below are the documents that are accepted by MCA for the online company registration process.
Identity and Address Proof
- Scanned copy of PAN Card. Foreign nationals must provide a valid passport (Shareholders and Directors)
- Scanned copy of Voter’s ID/Passport/Driver’s License/Aadhar (Shareholders and Directors)
- Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill (Shareholders and Directors)
- Latest Passport size Color photograph of all the promoters (Shareholders and Directors)
For foreign nationals, an apostilled or notarized copy of the passport has to be submitted mandatorily. All documents submitted should be valid. The residence proof documents like the bank statement or the electricity bill must be less than 2 months old.
Registered Office Proof
- Latest & Clear Telephone Bill/Electricity Bill/ /Water/Gas Bill of the registered office address
- No Objection Certificate from the owner(s) of the premises of the registered office.
Note: Your registered office need not be a commercial space; it can be your residence too.
Why register Section 8 Company - Benefits
The following are the advantages of incorporating a Section 8 company over other modes of registering an NGO:
- It has organised operations and greater flexibility.
- Avoids meticulous registration process and no physical presence required.
- No requirement of a minimum paid-up capital.
- Seamless procurement of tax benefits under section 12AA and 80G of the Income Tax Act.
- Any partnership firm can be a member in its individual capacity.
- Can be registered with only 2 members as against the requirement of 7 persons for registration of the society.
- More creditworthiness and goodwill as it is registered with the Central Government of India.
- No other NGO can be registered in India with a similar name.
- All filings including the filing of the balance sheet with ROC and other activities such as name change, office address change or all other kinds of change is done online.
- Most preferred from the point of view of grants by Government.
- Most preferred from the point of view of CSR funding.
- Easy to transfer ownership in comparison to trust and societies.
- Can be verified online on the website of the Government.
- Voting rights are in percentage and hence only 1 person can hold 99.99% voting rights and thus it is easy to take policy decisions.
- It is a national level NGO.
- It can be converted into a normal Private Limited or Public Limited Company anytime.
How to Register a Section 8 Company Online - A Detailed Registration Process
The Ministry of Corporate Affairs governs the Section 8 company registration process with rules and regulations framed following the law.
Search the Name before Company Registration
One of the primary steps in Section 8 Company Registration is to ensure that the company name has not already been taken by another legal entity. We can run a company name search to check the availability of the particular name in India against the MCA and trademark database.
The Company name can be checked in MCA Database
and in Trademarks Database
We recommend the businesses to come up with three to four alternative names. The Ministry of Corporate Affairs will be the final authority to approve the name based on the availability rules and regulations.
If you are disappointed that a preferred name is taken, do remember that the name of your company doesn't have to be your brand name.
Name Structure of Section 8 Company
A section 8 Company can be registered either in the form of Private Limited or Public Limited Company but unlike a normal Private Limited or Public Limited Company, the name of a section 8 Company does not end with words "Private Limited or Public Limited". Rather the name of section 8 Company must end with words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust and the like, etc.
Applicability of Tax Exemption
There is a general notion that a Section 8 company need not pay tax as they work towards the welfare of the public at large. But this is not true. A Section 8 company, like trust and society, is liable to pay tax. In order to be exempted from Tax, a Section 8 company is required to obtain certification for the said exemptions such as Section 12 A, 80G etc. from the Income Tax Authorities.
What you get after Section 8 Company Registration
Legalguard.in Section 8 Company Registration Package Includes:
Access To Experts
We provide access to reliable professionals and coordinate with them to fulfil all your legal requirements. You can also track the progress on our online platform, at all times.
By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the incorporation process to set realistic expectations.
With a team of over 150 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.