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![Eligibility Criteria for Section 8 Company Registration in India](https://s3.us-west-2.amazonaws.com/timessquarereporter.com/upload/media/posts/2024-05/16/eligibility-criteria-for-section-8-company-registration-in-india_1715846704-b.jpg)
An Overview of Section 8 Company Registration
Following is the eligibility criteria for Section 8 Company Registration in India:
At least 1 Director is required and he or she should be a resident of India
HUF, an individual is eligible to commence a Section 8 Company in India
The objective of the Company should be one or more of the following – the advancement of science & art, social welfare, promotion of sports/arts, and financial support to lower-income groups
2 or more individuals who will act as Directors/Shareholders should fulfill all the compliance & requirements of the Section 8 Company Registration under the Companies Act
Directors, founders, and Members Directors of the Company cannot draw any remuneration in any form of cash or kind
No profit should be shared or distributed among the Directors & members of the Company indirectly/directly.
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Requirements for Section 8 Company Registration
Following are some vital requirements for Section 8 Company Registration:
1. Directors:
For Section 8 Company Registration in India, a minimum of 2 Directors are required.
2. Capital Requirement:
There is no minimum paid-up capital for the Registration of Section 8 Company. NGOs in India established as a Section 8 company need not use the words Private Limited or Limited in their name.
3. Management
Section 8 Company is managed by the BoD (Board of Directors) as per AoA & MoA of the Company, unlike other Trusts that are handled by the Trustees as per the Trust Deed.
4. Regulation under various Acts:
Section 8 Company needs to follow the Rules & Regulations prescribed under the Companies Act, 2013. It needs to file returns & maintain Books of Account with ROCs. Section 8 Company can’t make any alterations to the provisions of Memorandum of Association (MoA) & Articles of Association (AoA) without prior consent of the Central Government and it should follow the provisions of the GST Law & Income Tax Act.
5. Charitable Objects:
In India, Section 8 Companies are registered with non-profit objectives. The AoA & MoA must mention the purpose for which it is set up. Any profits earned by the Section 8 Company is utilised for the furtherance of its main objectives i.e., charitable purposes in the Company. The profits will not be distributed among its members.
6. DSC and DIN:
DSC or Digital Signatures of all the proposed Company’s Directors are necessary for the Registration because the forms for the Registration process are filed online & should be digitally signed. Apart from DSC, you need to apply for DIN for the Directors and the application for allotment of DIN must be filed in Form DIR-3 or along with the SPICe+ Form for the Registration.
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