What is Section 8 and what are Section 8 Companies?
Section 8 of the Companies Act 2013 provides for the formation of the companies with charitable objects etc. Section 8 Company, (earlier Section 25 Company of the Companies Act, 1956), is a legal entity for Non-Government or Non-Profit Organizations.
A Section 8 Company is similar to a Trust or Society; expect, a section 8 Company is registered under the Central Government's Ministry of Corporate Affairs. Trusts and Societies are registered under State Government regulations. A section 8 company has various advantages when compared to Trust or Society like improved recognition and better legal standing. Section 8 company also has higher credibility amongst donors, Government departments and other stakeholders.
Documents for Incorporate a section 8 company
- Identity Proof of all the directors - copy of the PAN card (Mandatory).
- Address Proof – copy of Aadhar/ Driving License/ Passport/ Telephone Bill/ Electricity Bill.
- Passport size photograph of all the directors.
- Rent Agreement in case the registered office of the company is on rent.
- Utility Bill of registered office.
- Form DIR-2 which is consent to act as director.
- Director's interest in other entities.
Procedure of Incorporation of Section 8 Company registration
Here are the following steps required to incorporate a section 8 company
DSC
First, Obtain the Digital Signature Certificate (DSC) of all the directors and promoters of the company, in case they don't have the same. For obtaining DSC an application is made to the certifying authority.
DIN
Secondly, to obtain the Directors Identification Number(DIN)for all the directors in the company.
Name Approval
For name approval, an application will be filed in Form INC-1 to the registrar of the company. Maximum six names can be provided for the name approval by the applicant. An approved name is valid for the 60 days. It is required for section 8 company to include the words such as foundation, association, forum, council, chambers etc. in accordance with the company, incorporation rules 2014.
Draft MOA & AOA
After name approval, the next step is to draft MOA & AOA and then it is required to file it to ROC in form INC 12 with other documents for the license under section 8 of the companies act, 2013. The MOA & AOA must be signed by the subscribers of the memorandum.
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