In the realm of corporate entities driven by a social mission, Section 8 Companies stand out as beacons of altruism and social responsibility.
Section 8 Company
Outline
Section 8 Company: Fostering Social Impact through Non-Profit Endeavors
In the realm of corporate entities driven by a social mission, Section 8 Companies stand out as beacons of altruism and social responsibility. These organizations, governed by Section 8 of the Companies Act, 2013 (previously Section 25 of the Companies Act, 1956), are dedicated to promoting charitable, educational, scientific, or other socially beneficial objectives. Let’s explore the registration process, documentation requirements, and the myriad benefits of establishing a Section 8 Company.
What is Section 8 Company? – Companies Act, 2013
According to the Companies Act 2013, a Section 8 company is defined as an organization whose objectives are to promote arts, commerce, science, research, education, sports, charity, social welfare, religion, environmental protection, or other similar activities goals. These entities utilize their profits to achieve their mission and do not distribute dividends to their shareholders.
Registration Process
Establishing a Section 8 Company involves a structured registration process, designed to ensure compliance with legal regulations while fostering the organization’s philanthropic goals:
1. Name Reservation: Choose a unique name for the Section 8 Company, reflecting its charitable objectives.
2. Drafting of Memorandum and Articles of Association: Prepare the Memorandum of Association (MoA) and Articles of Association (AoA) in accordance with the provisions of Section 8 of the Companies Act.
3. Application for Incorporation: Submit the application for incorporation along with the MoA, AoA, and other requisite documents to the ROC.
4. Review and Approval: The ROC will review the application for compliance with legal requirements and may seek clarifications or additional documents, if necessary. Upon satisfaction, the ROC will issue a Certificate of Incorporation, confirming the establishment of the Section 8 Company.
5. Post-Incorporation Compliance: Fulfill post-incorporation compliance requirements, including obtaining necessary registrations and approvals, opening a bank account, and adhering to statutory obligations such as filing of annual returns and maintaining proper accounting records.
Benefits of Section 8 Company
1. Tax Exemptions: Section 8 Companies enjoy tax exemptions on income generated from their charitable activities, including donations and grants received for such purposes. This encourages philanthropic initiatives and maximizes the impact of social welfare programs.
2. Limited Liability: Directors and members of Section 8 Companies have limited liability, protecting their personal assets from liabilities arising out of the company’s activities.
3. Credibility and Trust: The registration as a Section 8 Company lends credibility and trustworthiness to the organization, as it signifies adherence to legal regulations and commitment to social welfare objectives.
4. Flexibility in Operations: While Section 8 Companies are subject to regulatory oversight, they have flexibility in their operations to pursue charitable activities aligned with their mission.
5. Perpetual Succession: Section 8 Companies enjoy perpetual succession, meaning they continue to exist despite changes in membership or leadership.
Documents Required for Section 8 Company
Scanned copies of:
Aadhar Card, PAN Card, Email Id & Mobile Number of all Partners
Identity Proof of all partners (Passport, Driving License, or Voter ID Card)
Address Proof of all partners (Bank Statement or Passbook, electricity bill, telephone bill, Aadhar Card, or any utility bill).
Registered Office Address Proof – Electricity Bill along with NOC from the owner (if rented), or any other ownership proof of proposed registered office.
Passport Size Photograph, mobile number, and email address.
Note : All documents shall be self-certified. There is no requirement for submitting physical documents.
Key Points about Section 8 Company Act
In India, Non-Governmental Organizations (NGOs) can be registered under the Registrar of Societies or as a non-profit entity under Section 8 Company of the Companies Act, 2013.
Profit generated by Section 8 Companies cannot be used for purposes other than charitable objectives and cannot be distributed among shareholders.
Section 8 Companies are required to comply with the provisions of the Companies Act 2013. They are mandated to maintain books of accounts, file returns with the Registrar of Companies (ROCs), and comply with GST and IT Act.
Any changes to the charter documents like the Articles of Association (AoA) and Memorandum of Association (MoA) require the government’s consent.
Conclusion
In conclusion, Section 8 Companies play a vital role in driving positive social change and advancing philanthropic causes. By providing a legal framework for pursuing charitable activities, these organizations empower individuals and communities to address pressing social issues and contribute to the greater good. Through diligent registration, compliance, and dedication to their mission, Section 8 Companies can create lasting impact and inspire others to join the movement towards a more equitable and compassionate society.
If you need help with the incorporation and compliances, we have got you covered. Team Udyog Buddy has been satisfying a lot of businesses. And now, we’ll help you get your registration process easier with our experts and professionals who are dedicated to providing a hassle-free and affordable registration experience.
Why Choose Udyog Buddy ?
Udyog Buddy is a team of experienced professionals, our end-to-end service model, combined with personalized support, makes the incorporation journey straightforward and stress-free. Additionally, our commitment to cost-effective solutions and time efficiency allows businesses to focus on growth and operations without unnecessary delays or financial strain. Choosing Udyog Buddy means partnering with a trusted expert dedicated to helping your business succeed from the very start.
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