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SECTION 8 COMPANY

ADVANTAGES & BENEFITS

No minimum capital 

There is no minimum capital requirement for a Section 8 Company Registration in India.

Tax Benefits

There are numerous tax benefits under the Section 8 Company Registration in India.

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No Stamp Duty

No stamp duty is imposed on the incorporation of Section 8 Company in India as it is against the provision of the payment of stamp duty on the MOA and AOA of the private limited company.

Separate Legal Identity 

Section 8 Company registration has a separate legal entity. It acquires a distinct legal identity from its members.

Credibility

Section 8 Company has more credibility than any other form of a charitable organisation. It is under the strict provision of the Companies Act which requires a mandatory audit every year.

Exemption to the donators

Under Section 80G, the exemption is granted to the donators if the section 8 company is registered under section 80G.

ELIGIBILITY CRITERIA

  1. An Individual or HUF or limited Company is eligible to start a Section- 8 company registration in India.
  2. Two or more person who will act as a shareholder or Director of the company should fulfil all the requirements and compliances of the Section 8 Company registration.
  3. At least one of the directors shall be a resident of India. However, a firm may be a member of the company registered under this section.
  4. The objective should be the promotion of sports, social welfare, the advancement of science and art, education and financial assistance to lower income groups.
  5. The surplus generated must be used for meeting the principal objective of the section 8 company only.
  6. Founders, members, and directors of the company cannot draw any remuneration in any form of cash or kind.
  7. No profit should be distributed among the members and director of the company directly or indirectly
  8. The company should have the clear vision and project plan for the next three years.

DOCUMENTS REQUIRED

  1. PAN Card of the Directors and Shareholders
  2. Aadhar Card
  3. Latest Bank Statement
  4. Telephone Bill or Electricity Bill
  5. Voter ID or Passport or Driving license
  6. Passport size photograph of all the directors and shareholders
  7. Copy of the Rental agreement, in case the property is on rent for the registered office

FAQs

Section 8 Company is often called as Non- Profit Organization Company. A non-profit organization is often known as NGO. An NGO can register under Trust Act or under Section 8 companies act, 2013 (earlier Section 25 of Companies Act 1956). The NGO registration can be done for promoting art, science, commerce, Technology, sports, education, social research, social welfare, religion, charity and protection of environment etc.

  1. Education
  2. Poverty
  3. Disease
  4. Blood bank
  5. Environment protection
  6. Other objects for general public utility.

Yes, we have to take the permission or approval for section 8 company registration in India from the central government. CG approval is applied before section 8 company registration.

Yes, section 8 company registration is costly then trust or society registration.

The annual compliances of section 8 company are just like the other companies.

  1. At least two Board meeting during the year should be conducted.
  2. Mandatory Audit
  3. Annual return is to be filed every year with other e- filing forms like MGT 7, AOC 4.
  4. Income tax return is to be filed every year.
  5. Additional compliances to fulfill the registration like 12AA, 80G etc.

In Section 8 Company, the auditor is appointed within 3o days of Section 8 company registration by the board of Director and no Central Government approval is required.

Following are the disadvantages under section 8 company registration which are as follows:
  1. Section 8 company is complex to start as it requires Central Government Approval.
  2. Section 8 compliance cost is high as compared to any other trust or society
  3. Penalty provisions are harsh under section 8 company.
  1. Section 12AA under Income tax act
  2. Section 80G for Donators of the
  3. FCRA Registration

The cost of Section 8 Company registration varies from company to company.

No, there is no concept of the minimum number of member requirement for section 8 company registration.

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