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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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