The concept of Section 8 companies was presented in the Organizations Act 2013 that allowed organizations with charitable objectives. These organizations are enlisted without the words ‘Limited’ or ‘Private Limited. The principal goals behind Segment 8 companies are to advance business, craftsmanship, science and so forth. The benefits acquired by such organizations will be utilized exclusively for advancing the goal of the organization and no profit will be paid to the members of Section 8 companies.
Documents Required for Section 8 Company Incorporation1. Identification size photos of the proposed chiefs.
2. Personality and Address Verification of the proposed chiefs.
3. Service bill not more established than 2 months affirming the private location of the proposed chiefs ( i.e., Bank Proclamation/phone bill/power bill).
4. Evidence of enrolled office alongside the service bill not more established than 2 months. The service bill can be phone bill/power charge/Water Bill.
5. No Objection Certificate (NOC) for utilization of enlisted office of proposed organization from proprietor and individual whose name is referenced in the service bill.
6. Statement of Approved Signatory for GSTIN, on the off chance that the organization wishes to apply for something very similar.
7. Specimen Signature Card for online application for registration with Employees’ Provident Fund Organization.
8. Class-3 Digital Signatures (DSCs) of all the proposed Directors.
9. Statement in type of an affirmation from the proposed directors and subscribers, in the event that where the fundamental object of the organization requires endorsements from sectoral controllers like RBI or SEBI.
10. Draft Update and Articles of Relationship of the Organization where the photos of the supporters will be attached.
11. A declaration in Form INC-14 which will be executed by a CS/CA/CMA.
12. An estimate of the future annual income and expenditure of the company for next three years, specifying the sources of the income and the objects of the expenditure.
13. A declaration in Form INC-15 by every one of the people making the application.
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Eligibility Criteria for Incorporation of the Section 8 Company
Benefits of Section 8 CompaniesTax Exemptions: Section 8 companies are eligible for a number of tax exemptions, including exemption from income tax, stamp duty, and registration fees.
Credibility: Section 8 companies have a high level of credibility in the eyes of donors, investors, and other stakeholders due to their focus on social and charitable objectives.
Funding: Section 8 companies can attract funding from a variety of sources, including individuals, organisations, and government agencies that are interested in supporting social causes.
Limited Liability: Section 8 companies provide limited liability protection to their members, which means that the personal assets of the members are protected in case of any financial loss or liability.
Recognition: Section 8 companies are recognised as a legal entity under the Companies Act, which means that they can enter into contracts, own property, and sue or be sued in their own name.
Section 8 Company may be established limited by shares or by Guarantee (with or without share capital). Is it mandatory that the name of section 8 Company shall include the words like – Foundation, forum, association, federation, chamber, confederation, Council, electoral trust etc.? Yes. As per rule 8(7) of the Companies (Incorporation) Rules, 2014, for companies specified in section 8 of the Act, name will include the words foundation, Forum, Association, Federations, Chambers, Federations, councils, Electoral Trusts and others, etc
Stamp duty on issuance of share certificates is governed by Indian law Stamp Act 1899 and no relaxation of special stamp rates Stamp duty was paid upon transfer act. However, as is the case with other companies, there is no stamp Tax payable on transfer of company shares section 8 Also, if done in demat mode.
No. Rule 3 of the Company Rules (Establishment of Company), 2014 prohibits an individual company from being merged into a Section 8 or convert into a Section 8 company.
Business? No, rule 3(6) of the Companies (Establishment) Rules, 2014 prohibits an individual company from investing in any securities of any kind Group.
Yes, under the Companies Act 2013, a limited partnership or An LLP can become a member of a Section 8 Company. The provisions of the respective Acts must be respected by general partnership or LLP as the case may be.
