SECTION 8 Company or NGO INCORPORATION
ONLY at ₹14,999/- all inclusive
If you’re looking to operate a Company which does welfare for masses, promotes commerce, arts, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
AND you do not to wish to earn profit and will use any profits earned during for attaining the objects for which NGO was formed.
It has less compliance requirements as compared to other private limited companies.
Eligible for Tax benefits
A Section 8 Company is eligible to apply for Tax exemption benefits and thus can procure donations by issuing 80-G certificates to donors.
No Stamp duty
No Stamp duty is required to be paid for registration of a Section 8 Company.
What all do you GET?
- Name Approval Certificate
- Certificate of Incorporation
- PAN and TAN of the Company
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Govt. License for NGO
- Digital Signature Certificates for 2 promoters
- Director Identification Number (DIN) for two Directors
- Bank Account Opening Support
- Registration for PF and ESIC
HOW DOES IT WORKS?
What is a Section 8 companies?
A Section 8 company is a type of non-profit organization incorporated under Section 8 of the Companies Act, 2013 in India. It is formed with the primary objective of promoting charitable, social welfare, educational, scientific, literary, or similar purposes.
Section 8 companies are established to operate for the benefit of the public and not for the purpose of earning profits or dividends for its members.
What are the examples of Section 8 companies?
There are numerous Section 8 companies in India that operate in various sectors and work towards different social, charitable, or non-profit objectives.
Some examples of well-known Section 8 companies are Teach for India, HelpAgeIndia, CRY (Child Rights and You), Akshaya Patra Foundation, Pratham Education Foundation etc.
What is the benefit of Section 8 company?
Section 8 companies, also known as non-profit organizations, enjoy several benefits that make them attractive for individuals and entities looking to engage in charitable or social welfare activities.
These include limited liability, eligibility to apply for various tax exemptions, access to fundings and grants, credibility and trust, perpetual existence, Social Impact etc.
Can Section 8 company directors take salary?
Yes, directors of a Section 8 company in India can receive remuneration or salary for their services. Section 8 companies are allowed to pay reasonable remuneration to their directors for their managerial or professional services rendered to the company.
However, it is important to note that the remuneration should be within the limits specified in the Companies Act, 2013, and should be approved by the shareholders of the company.
How is a private limited company registered?
Registering a Private Limited Company is same as Incorporating a private company, which involves the same procedure:
- Choose a name for your company and apply for RUN (Reserve Unique Name) with the the Ministry of Corporate Affairs.
- Once the name gets approved, file the requisite forms like Spice+, MOA, AOA, INC-9 and Agile Pro and pay the applicable government fees.
- If the MCA finds the documents to be appropriate, the Company incorporation will be granted within 5-7 working days
Applicant will receive the Certificate of Incorporation, PAN, TAN and other details of the Company on the registered email.
What is the difference between Pvt Ltd and Section 8 company?
Private Limited Company and Section 8 Company are two different types of legal entities in India, each with its own characteristics and purposes.
Below are some key differences between them:
- Purpose of formation: A private limited company is formed for commercial purposes and to earn profits, while a Section 8 company is formed for non-profit objectives. Section 8 companies are formed to promote social welfare, charitable work, science, art, education, religion, and to protect the environment, among other things.
- Profit Distribution: In a Private Limited company, profits can be distributed among the shareholders in the form of dividends, subject to applicable laws and regulations. On the other hand, a Section 8 company is prohibited from distributing profits or dividends to its members.
- Licensing: A Section 8 company needs to obtain a license from the Registrar of Companies (ROC) before commencement of activities. The license is granted after verifying the company’s non-profit objectives. In contrast, there is no specific licensing requirement for a Private Limited company.
- Name Restrictions: Section 8 companies are required to include the words “Section 8” or “Section 8 company” in their name as a part of their identification. Pvt Ltd companies, on the other hand, should use the words “Private Limited” as a suffix to its name.
- Compliance and Regulations: Both Pvt Ltd and Section 8 companies are subject to compliance and regulatory requirements under the Companies Act, 2013. However, Section 8 companies have additional obligations related to maintaining non-profit status, utilizing income for charitable purposes, and complying with specific reporting and disclosure requirements.
Who is the owner of Section 8 company?
The ownership of Section 8 company is vested in the subscribers or shareholders of the company which may include individuals, organizations, or a combination of both. Section 8 companies may have a board of directors responsible for the overall management and administration of the company.
These directors are appointed by the members and may play a significant role in decision-making and ensuring compliance with relevant laws and regulations. However, the ownership of the company remains with the members collectively.
Is Section 8 company taxable?
Yes, Section 8 companies in India are subject to certain tax obligations. While Section 8 companies are non-profit organizations, they are still liable to pay taxes on certain types of income and transactions.
However, Section 8 companies are eligible for various tax exemptions and benefits under the Income Tax Act, 1961 which include exemptions under Section 80 G and 12AA etc. These exemptions are granted on the condition that the income generated by the Section 8 company is used for furthering its non-profit objectives.
The specific tax exemptions and benefits available to a Section 8 company depend on the nature of its activities and compliance with relevant tax regulations.
What is the minimum capital for Section 8 company?
The Companies Act, 2013, which governs Section 8 companies, does not prescribe any minimum capital requirement for their incorporation.
What is the minimum number of directors to incorporate a private company?
The minimum number of directors required to incorporate a private company is 2 (two) and a company can have a maximum of 15 directors. A company can appoint more than 15 directors also subject to passing of special resolution.
What is turnover of Section 8 company?
There is no turnover concept for a Section 8 company as it is a not for profit organization. However, it may have revenue in form of funds received from various sources, such as donations, grants, sponsorships, membership fees, and income generated from activities directly related to its non-profit objectives.
The revenue can vary significantly based on the scale of operations, projects undertaken, and the level of funding and support received.
How many directors required for Section 8 company?
A Section 8 company in India is required to have a minimum of two directors. While the minimum requirement is two directors, Section 8 companies can have more than two directors as per their requirements and the decision-making structure established by the organization.
Does Section 8 company need a company secretary?
A Section 8 company in India is required to appoint a Company Secretary if the paid-up share capital is Rs. 10 Crores or more.
It’s important to note that if a Section 8 company does not meet the paid-up share capital threshold, it is not mandatory to appoint a whole-time Company Secretary.
Is Section 8 company limited by shares or guarantee?
A Section 8 company can be limited by shares or by guarantee, depending on the choice made by the founders or promoters of the company during its incorporation. The choice of whether to make the Section 8 company limited by shares or guarantee depends on the specific requirements and objectives of the organization.
Section 8 Company Limited by Shares: In this case, the Section 8 company issues shares to its members or shareholders, who hold ownership in the company in proportion to their shareholding. The liability of the members is limited to the amount unpaid on their shares. If the company faces financial difficulties or is wound up, the liability of the shareholders is limited to the extent of their unpaid share capital.
Section 8 Company Limited by Guarantee: In this case, the Section 8 company does not have share capital or shareholders in the traditional sense. Instead, the members of the company give a guarantee to contribute a specified amount towards the liabilities of the company in the event of its winding up.
How can I register my NGO Section 8 company in India?
Registration of Section 8 company is almost similar to the registration of a Private Limited company which involves following steps:
- Choose a name for your company and apply for RUN (Reserve Unique Name) with the Ministry of Corporate Affairs.
- Once the name gets approved, file the requisite forms like Spice+, MOA, AOA, INC-9 and Agile Pro along with necessary attachments and pay the applicable government fees.
- If the MCA finds the documents to be appropriate, the Company incorporation will be granted within 5-7 working days
- Applicant will receive the Certificate of Incorporation, PAN, TAN and other details of the Company on the registered email.
Can an NGO be registered as a company?
Yes, an NGO (Non-Governmental Organization) can be registered as a company in India. The most common form of registration for an NGO is as a Section 8 company under the Companies Act, 2013.
A Section 8 company is specifically designed for non-profit organizations that intend to promote charitable, social welfare, educational, scientific, literary, or similar objectives.
What documents are needed to open an NGO?
The following documents are required for LLP incorporation:
- Identity, address proof and passport size photograph of all Directors;
- Identity, address proof and passport size photograph of all Subscribers;
- Registered Office documents – Rent Agreement/Sale Deed/Lease Deed; No objection Certificate (if premises are rented) and utility bill (not older than two months);
- Projected Statement of Income and Expenditure; and
- Projected Statement of Assets and Liabilities.
What is the qualification to run NGO?
There is no specific qualification required to start or run a non-governmental organization (NGO).
To be successful in running an NGO, it is essential to have a deep understanding of the social issues that the organization aims to address, as well as strong organizational and leadership skills.
Additionally, knowledge of fundraising and grant writing, marketing and communication, and project management is essential for managing an NGO effectively.
Is Digital Signature mandatory for carrying out registration formalities?
Yes, it is essential to obtain Digital Signature for the Directors to carry out the registration formalities.
ANSWERING YOUR QUERIES
What is a Private Limited Company?
It is essentially a company with private ownership, i.e. the shares are held privately and cannot be bought by the public at large.
It is an ideal option for small businesses where owners pay a share capital to subscribe to their shares in the company.
Who is Eligible to Register?
Requires a minimum of two directors and shareholders. Two or more individuals who have a valid PAN and Address Proof, along with a proposed office space/premises can be shareholders and directors.
Foreign citizens can also be directors in the company provided it has a minimum of 1 resident Indian as a director and a share holder.
What is a Share Certificate?
Legal proof of ownership of shares or stocks issued by a Company
What is DIN?
A unique number issued to the directors of a Company.
It is prerequisite for application of Directorship of a company.
For first time directors, it gets issued automatically once the company is incorporated.
Still Have Queries?
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