How to Register NGO/Trust/Society - Section 8 Company?
A company registered under Section 8 of Companies Act is a company formed with a non-profit motive of promoting art, religion, literature, and social welfare. Incorporation of Section 8 company is mandatory under the Companies Act, 2013. Section 8 company registration as it gives numerous benefits like taxation benefits, no stamp duty for section 8 company registration.
What Is the Purpose of Registering NGO/Trust/Society – Section 8 Company?
The main purpose of registering a company as a Section 8 company is to promote non-profit objectives such as the following:
1. Commerce
2. Art
3. Science
4. Sports
5. Education
6. Research
7. Social welfare
8. Religion
9. Charity
10. Protection of environment
11. Any such other object related to the above objects
Benefits of Section 8 Company Registration
There are certain advantages of registering an NGO or NPO under Section 8 of Companies Act 2013.
Some of them are as follows:
No Stamp Duty:
No stamp duty is imposed on the incorporation of Section 8 Company in India as it is against the provision of the payment of stamp duty on the MoA and AoA of the private limited company.
No Minimum Capital Requirement:
Zero minimum capital limit has been mentioned for a Section 8 Company in India. And the capital structure can be altered at any stage as per the growth requirements of the company.
Tax Benefits:
For Section 8 Companies in India, many tax benefits are granted. The profits generated by such entities are non-taxable in nature because they use the same for charitable purposes.
Limited liability:
The members of the Section 8 company have limited liability upto unpaid call on share suscribed. They are not personally liable for the losses of the company.
Exemption to the donors:
The tax exemption is granted to the donors who has given donation to the section 8 company under Section 12A and 80G of the Income Tax Act, 1961.
Separate Legal Identity:
A section 8 company holds its own legal identity just like other registered companies & rejoices autonomous legal standing from its member.
Process to Register a Section 8 company
Step 1
Obtain a DSC of the proposed Directors of the Section 8 Company. Once a DSC is received, file Form DIR-3 with the ROC for getting a DIN. The Proof of Identity and Address Proof needs to be attached for obtaining DSC.
Step 2
Once the DIR-3 is approved, the ROC will allot a DIN to the proposed directors.
Step 3
File Form INC-12 with the ROC to apply for a licence for the Section 8 company along with the attachment of the required documents as mentioned above.
Step 4
Once the form is approved, a license under section 8 will be issued in Form INC-16.
Step 5
After obtaining the license, file the SPICe+ Form with the ROC for incorporation along with the required attachments as mentioned above.
If the ROC is satisfied with the forms submitted, he issues a Certificate of Incorporation along with a unique Company Identification Number (CIN).
Documents Required For Registration
- Electricity Bill or any other utility bill for the address proof of the Registered Office
- Photograph of the Director
- PAN Card of the Director
- Residential Address Proof of the Director (Electricity Bill/Latest Bank Statement/Mobile Bill) (not older than 2 months)
- ID Proof of the Director (Aadhar Card/Driving License/Voter ID)
Annual Compliances of Section 8 Company
Followings are the annual compliance of section 8 company:-
- Conduct a minimum of two board meetings in a year
- Maintenance of Books of Accounts
- Preparation of financial statements
- Mandatory audit report
- Income tax return filing
- Filing of financial statements in form AOC 4
- An annual return is to be filed every year with other e- filing forms like MGT 7/7A
- Additional compliances to fulfil the registration like 12AA, 80G, etc
