Procedure for Section 8 Company Incorporation.

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The procedure for incorporation is same as in case of a private or public company. The only difference is that a license is to be obtained from the office of Regional Director to form a company under section 8 of the Companies Act 2013 and the copy of the license is to be submitted with the office of Registrar of Companies for incorporation.

To obtain a license under section 8, an application is to be made to the Regional Director indicating the purpose and objects of the proposed company and after considering the application and if satisfied with the objects of the company the Regional Director will issue a license to incorporate such company.

Steps for Section 8 company registration:

Step I

Apply for the Reservation of the name through “RUN service” on the MCA portal

Step II

After obtaining the availability of name an application has to be filed with the office of Regional Director for obtaining a license under section 8 of the Companies Act 2013.

Step III

A public notice has to be published simultaneously in one English language and in one vernacular language in Newspapers having circulation in the City where the registered office of the company is to be situated.

Step IV

After publication license is to be obtained from the office of Regional Director after removing his objections if any.

Step V

After obtaining the license incorporation form to be filed with ROC together with necessary attachments and a copy of the license.

Step VI

Certificate of Incorporation is issued after the above forms are approved.

Benefits of A Section 8 Company Incorporation

1. The profits made by such companies are not charged to tax.
   
2. Such companies are not required to add the words ‘Limited’ or ‘Private Limited’ as a suffix to their names.
   
3. Such companies can accept donations and contributions and become eligible to give benefits under section 80G of Income Tax Act (after getting approvals from the relevant department)
   
4. Such companies enjoy a number of privileges and exemptions under Companies Act 2013 vide notification dated 05th June 2015
   
5. Such companies no need to pay the Stamp duty for registration.
   
6. A registered partnership firm can act as a member of section 8 Company.
   
7. Section 8 Companies can be formed with or without share capital
   
8. The shares of the members of Company is movable so it is easier to become or leave the membership of the Company or otherwise it is easier to transfer the ownership
   

Restrictions on Section 8 Company Registration

1. Such companies cannot distribute profits by way of dividends, etc.
   
2. All the capital and other investments are to be employed only for charitable or nonprofit purposes. They cannot have a commercial objective.
   
3. Such companies cannot alter their objects or articles of association without the approval of the Central Government (through Regional Director)
   
4. When you want to wind up or close down the company, all the reserves, assets, etc. shall be transferred to some other charitable trust or a similar social organization. The promoters will not be entitled to anything.

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Created on May 23rd 2018 07:03. Viewed 716 times.

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