So, you have a cause in mind. Hence, You have to build a non-profit company or section 8 company that can help you reach your goals. Well, there’s a lot about starting a business. Firstly, you need to be legally registered under the Indian Companies Act 2013. We have tried to cover the most important information required to ensure accurate registration of a Section 8 Company or a Non-Profit Company.
Incorporation of Non-Profit Company or Section 8 Company
The Indian Companies Act 2013 regulates Section 8 Company Registration. It is administered by the Ministry of Corporate Affairs – MCA. And usually formed for promoting science, art, commerce, charity, religion or any other purpose useful to society. Section 8 company has limited liability and cannot make any profits. There is no requirement for minimum paid-up capital.
Purpose of Section 8 Company
The main purpose of establishing a company under section 8 is to promote non-profit objectives. These objectives could be trade, commerce, arts, charity, education, religion, environment protection, etc. This company’s profits help promote its objectives. However, there is no dividend distribution to the shareholders. Moreover, Section 8 Company requires no minimum paid-up capital.
Minimum requirements the incorporation of a Section 8 Company
Following are the minimum requirements for the registration of a Section 8 Company under the Indian Companies Act 2013:
- There must be at least two shareholders.
- At least two directors (directors and shareholders can be the same person);
- Minimum one of the director should be an Indian Resident.
- Lastly, no requirement for minimum capital.
Documents Required for Section 8 Company
Following are the required documents for the registration of a Section 8 Company:
- The PAN Card is a mandatory requirement
- Identity Proof (Voter ID / Aadhar Card / Driving License / Passport)
- Address Proof (Electricity bill/ telephone bill/mobile bill/bank statement)
- Registered Office Address Proof (rent agreement along with latest rent receipt if rented premise along with NOC of the landlord)
- Sale Deed / House Tax Receipt (if the director or the promoter owns the premise.)
Procedure for the incorporation of a Section 8 Company
Below is the process for the incorporation of a Section 8 Company:
1 – Obtain Director’s DSC on receipt of DSC file Form DIR-3 with ROC.
2 – Once the DIR-3 is approved, the ROC will allot DIN.
3 – File Form INC-1 with the ROC for applying for a company with 6 name options wherein one name is selected.
4 – After approval file FORM INC-12 with the ROC to apply for a licence for the section 8 company. Following are the required documents with INC-12:
- Draft MOA as per Form INC-13
- Create AOA
- Declaration as per Form INC-14 (From practising chartered accountant)
- Declaration as per Form INC-15 (From each person making an application)
- Estimated income and expenditure for the next 3 years.
5 – Finally, once the form is approved, a license under section 8 will be issued in FORM INC-16.
6 – After obtaining the license, file SPICe Form 32 with the ROC for incorporation.
Moreover, here is a list of required documents along with SPICe Form 32:
- An affidavit from all the directors cum subscribers – INC-9.
- Declaration of deposits.
- KYC of all the directors.
- Form DIR-2 with its attachments i.e. PAN card and address proof.
- Consent letter of all directors.
- Interest in other entities of the directors
- Utility bill as proof of office address
- NOC in case of leased/rented premises.
- Draft MOA and AOA
Completion of the Incorporation Process
Consequently, the SPICe Form 32 goes to the ROC along with the required documents. Moreover, if the ROC is satisfied with the forms submitted, a certificate of incorporation is issued along with a unique company identification number – CIN. Once approved, Section 8 Company incorporation finishes.
We have tried to compile everything required to set up a Section 8 Company i.e. a Non-Profit Company. Hope the above-given information is helpful for Section 8 Company registration with ROC. We will keep on bringing more such topics to help you in your business’ legal, financial and taxation issues. However, it will be convenient to hire a qualified expert who can guide you through for faster processing.