In India, a Section 8 Company, also known as a not-for-profit organization (NPO) or a Non-Governmental Organization (NGO), is established for promoting charitable objectives. Unlike other types of companies, the primary objective of a Section 8 Company is not profit maximization but the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any such other object.
Section 8 of the Companies Act, 2013 governs the formation and regulation of such companies in India. The registration process for a Section 8 Company involves several steps, ensuring compliance with legal requirements and adherence to the objectives of the organization. Let's delve into the process step by step.
Obtain Digital Signature Certificate (DSC): The first step in registering a Section 8 Company is to obtain Digital Signature Certificates (DSC) for all proposed directors. A DSC is a digital equivalent of a handwritten signature, used for signing electronic documents.
Apply for Director Identification Number (DIN): Next, the proposed directors need to apply for Director Identification Number (DIN) if they don't have one already. DIN is a unique identification number allotted by the Ministry of Corporate Affairs (MCA) to individuals intending to become directors of a company.
Name Approval: Choose a unique name for the Section 8 Company and apply for its approval to the Registrar of Companies (ROC). The name should comply with the guidelines provided by the MCA. Once approved, the name is valid for 20 days.
Drafting of Memorandum and Articles of Association: Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) outlining the objectives and rules of the Section 8 Company respectively. These documents must be drafted in compliance with the provisions of the Companies Act, 2013.
Incorporation Application Submission: Compile all necessary documents, including the MOA, AOA, and other prescribed forms, and submit them to the ROC along with the requisite fees for incorporation. The application must also include a declaration by professionals like chartered accountants, company secretaries, or advocates certifying compliance with Section 8 requirements.
Review and Approval: The ROC reviews the application and documents submitted. If everything is in order and complies with legal requirements, the ROC issues the Certificate of Incorporation. This certificate confirms the establishment of the Section 8 Company.
PAN and TAN Application: After receiving the Certificate of Incorporation, apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the Section 8 Company. These are essential for tax compliance and financial transactions.
Registration for GST (if applicable): Depending on the nature of activities and turnover, the Section 8 Company may need to register for Goods and Services Tax (GST) with the relevant authorities.
Commencement of Operations: Once all formalities are completed, the Section 8 Company can commence its operations towards achieving its charitable objectives. It must ensure compliance with all statutory requirements and maintain proper records and accounts.
Annual Compliance: A Section 8 Company is required to comply with various annual filing and compliance requirements mandated by the Companies Act, 2013. This includes filing of annual returns, financial statements, and other documents with the ROC within prescribed timelines.
Also Read: Sole Proprietorship Registration
In conclusion, the registration process for a Section 8 Company in India involves meticulous planning, adherence to legal requirements, and a commitment to advancing charitable objectives. By following the steps outlined above and ensuring compliance with regulatory provisions, individuals and organizations can establish Section 8 Companies to contribute positively to society while enjoying the benefits of legal recognition and tax exemptions available to such entities.
