Section 8 Company (NPO) Registration

A section 8 company is called so as it is notified in section 8 of the Companies Act 2013. It is a non-profit organization (NPO) with the objective being encouragement of environmental protection, religion, social welfare, research, education, art, science and sports or any such activity which does not involve profit-making. The structure of such an entity is similar to a trust or society, the difference being that while the latter are governed by state government rules, a Section 8 company registration comes under the purview of Ministry of Corporate Affairs.

NPO company registration in India is done just like all the other company incorporations, through the Registrar of Companies of the state where the organization is located. Any group which means to use its income and other finances to achieve its aim of propagating the values that it believes in and has no intention of paying any dividend to its members can apply for incorporation. Our well- trained legal experts are always at the service of our clients to help transform their organization into a section 8 company by providing all necessary professional and legal support.

Reasons To Register A Section 8 Company

Tax Benefits

NPO registration In India provides an organization with tax exemptions apart from helping those individuals donating money to them by deduction of the donated amount from their taxable income under Section 80G of the Income Tax Act,1961.

Credibility

Section 8 company registration is a Government of India regulated process and therefore such companies have stricter regulations than a trust or society making them more trustworthy in the eyes of donors and general public. The nature of their incorporation also makes them observe firm compliance rules, increasing their reliability quotient.

Unique Identity

Like any other company, these companies are a separate legal entity than their owners and also enjoy the benefits of perpetual existence meaning in case of a shareholder/ director being incapable in discharging his/ her duties, a nominated person can replace him/ her.

Exemptions

A private limited company has to suffix the words “private limited” after its name but no such obligations are imposed on a section 8 company. Besides, no minimum capital needs to be contributed for section 8 company incorporation and they are also exempted from paying the registration stamp duty. Constituted with the purpose of promoting a cause, such entities can get funding from subscriptions from general public or members apart from donations.

Documents

Required by Directors

  • Identity Proof : PAN for Indian nationals
    Notarized or Apostilled Passport for foreigners
  • Address Proof : Passport, Aadhar, Driving License along with Bank Statement/ Electricity/ Telephone/ Water / Piped Gas Bill
    Note : The bank statement/ utility bill must not be more than 2 months old.
  • Digital Signature Certificate (if already issued)
  • Director Identification Number (if already issued)
  • Two photographs are needed to be submitted with the application.

Required for Registered Office Proof

  • Sale Deed/ Rental Agreement, Property tax Receipt, Electricity/ Water/ Telephone/ Piped Gas Bill
  • A No Objection Certificate from the owner of the property mentioning that the property has been let to be used as registered office of the company.

Steps To Incorporate Section 8 Company Registration

Step 1:  Applying for the Digital Signature Certificate (DSC) as the online application form for section 8 company incorporation is required to be signed with the e-signature of the applicant. Photographs, ID and address proof are needed for DSC application.

Step 2:  Director Identification Number (DIN) is a mandatory unique identification number issued by the Registrar of Companies (RoC) to the director of a company. The application for this purpose also needs photos, ID and address proof.

Step 3:  An application has to be made to the RoC for approval of the company’s name. The name chosen should be unique and should not be in use by any other company as name or trademark.

Step 4:  Any approval or compliance asked for by the RoC has to be obtained from the respective government department and provided to the RoC office.

Step 5:  The application for NPO company registration in India is filed at the Ministry of Corporate Affairs (MCA) where the Registrar will wait for 30 days for any objections and to make other relevant consultations. In case of no opposition to the application the registrar may grant the license with or without any conditions.

Step 6:  The company needs to draft the Memorandum and Articles of Association (MoA & AoA) explicitly mentioning the objective of the organization to be of a charitable nature. The MoA and AoA along with the subscription statement have to filed with the MCA.

Step 7:  After the 30-day period as specified in step 5, you will get the incorporation certificate along with the Company Incorporation Number (CIN) completing your section 8 company registration process.

Step 8:  After obtaining the license, apply for PAN and TAN for your company, which can be further used to open a bank account in the company’s name.

Frequently Asked Questions

WHAT IS DIGITAL SIGNATURE CERTIFICATE AND WHY IS IT REQUIRED FOR COMPANY INCORPORATION?

Digital Signature Certificate (DSC) as the name suggests it is a digital signature of an individual and it is required for filling the e-forms of company incorporation electronically to Ministry of Corporate Affairs

WHO CAN BECOME A DIRECTOR OF A SECTION 8 COMPANY?

The Director required to be above 18 years of age and must be a natural person. He may or may not be citizen or residence of India. We can say that even foreign nationals can be Directors in Indian Section 8 Company.

WHAT IS THE MINIMUM LIMIT OF DIRECTORS TO FORM A SECTION 8 COMPANY?

In case of Section 8 Company, minimum no. of director is two.

HOW MUCH MINIMUM CAPITAL REQUIRED TO FORM A SECTION 8 COMPANY?

In case of Section 8 Company, minimum capital required is Rs.1,00,000/-.

WHAT IS MEMORANDUM OF ASSOCIATION & ARTICLE OF ASSOCIATION?

MOA & AOA of the company defines all the rules and regulations and the working flow of company. It also defines everything about the company’s objects, capital, identity, goals and working pattern. After the name of the company is select the Memorandum of Association and Articles of Association of the company is required to be drafted, the last page of the MOA and AOA is known as subscriber sheet which need to be filled in by the promoters in their own hand writing including their personal details and shareholding ratio.

DO PROMOTERS HAVE TO BE PRESENT PERSONALLY TO INCORPORATE A COMPANY?

Yes, promoters need to be present to personally meet us at our office or meet at any place for the registration of a Company. All the incorporation documents required to be present in original and scanned copy also required to submit.