Section 8 Company register
Mainly, not-for-profit companies are registered as per the rules of section 8 under the companies act 2013. These companies promote social welfare, arts, education, and other important tasks for human welfare. These companies do not carry forward profits to the next financial year. Also, these companies receive heavy tax relief from the government.
To get registered under Section 8, companies must have to be eligible under certain criteria;
- The company must promote social welfare and do only activities related to this.
- The focus area of the company must be related to the promotion of science, commerce, environmental protection, and alike activities.
- The company must have to spend all profit earned in a particular year. The company has to spend all earned profits on the promotion of social welfare.
- Similarly, the company cannot pay dividends to its member or have no such intention to pay back the investors.
- The company must have 8 members when incorporating.
The following documents must be submitted to the MCA (Ministry of Corporate Affairs) website.
| Name of the form | Key purpose |
|---|---|
| SPICE+ | for applying to incorporate the company under section 8. |
| DIR 2 | Consent from the directors' |
| DIR 3 | Application to get Director Identification Number (DIN) to company registrar |
| DIR 12 | Rules to appoint directors to the company |
| INC 12 | For applying corporate license |
| INC 13 | Presenting memorandum of association |
| INC 14 | Written declaration from a chartered accountant |
| INC 15 | Written declaration from all members involved in the registration application process |
| INC 16 | To get the final license of the company as registered under section 8 |
| INC 22 | Location details of the registered office |
All these forms must get duly filled with the appropriate method in the process of company registration.
First Step, the Digital Signature Certificate (DSC) of the director will be collected. Thereafter DIR 3 form along with DSC must get submitted to the company registrar. The proof of address along with identity proof will be submitted at that same time.
Second Step, the registrar will allot DIN once the DIR 3 form is verified.
Third Step, INC 12 form is now get submitted to the ROC for getting the corporate license.
Fourth Step, the license will get issued under section 8 through form number INC 16.
Fifth Step, now SPICE+ form will be submitted along with the all attachments mentioned above.
Promoting social welfare is the main purpose of Non-Governmental Organizations (NGOs). These companies mostly engage in philanthropic activities and promote people's welfare in general. These companies do not operate for the sake of profits. These companies are completely exempted from paying any kind of tax to the government.
Manly three types of NGOs are getting registered in India as per three respective laws.
- Society, under the Societies Registration Act 1860
- Trust, under the Indian Trust Act 1882
- Section 8 Company, under the purview of the Companies Act 2013
The operation and management of NGOs established under these laws are quite similar. Only the name of the designation and rules governing the operation are different among them.
According to the operation area and the quality of work, NGOs are further classified under various categories here;
a. The first criterion to initiate the operation of NGOs is the minimum number of directors. There must be 2 directors at least when incorporating the NGO.
b. To register NGO as a public limited company there must be 3 minimum directors.
c. Private limited NGOs only have a maximum of 200 members while public limited companies can have any number of members.
d. Remember that, there is no fee you need to pay when registering NGOs.
Serving the human cause has always been the core philosophy behind incorporating NGOs. Registering NGOs excites members and volunteers to participate in them. They would know their participation in the social cause would never get wasted. They would show more eagerness to participate in NGO operations.
Besides that, NGOs raise funds from multiple channels through various mediums. With this collected fund, NGOs can do their work in promoting social welfare. After registration, NGOs will have a distinct name and image legally.
To register an NGO in India, you need to compile the following documents;
The process of registration becomes easy and simple with the coming of digital technology. You can complete the registration process online also if you want to. Anyway, you just need to follow these simple processes to register the NGO as per the specific rules.
First Step, you have to choose a name for the NGO, which must be unique and formal.
Second Step, Director Signature Certificate (DSC) is needed to file DIN 3 form. The application must get submitted to the registrar of companies.
Third Step, the preparation of the draft MoA and AoA will be done now and then thm to ROC.
Fourth Step, after the detailed verification, the NGO will be given registered status. Also, it now has to obtain a PAN card in its name.
Fifth Step, for tax purposes, the NGO must send an application under 80G and 12A of the Income Tax Act.