Trust/Section 8 Company
Quick Contact
Documents Required
- Aadhaar Card
- Recent Utility Bill Business Place
- Name Significance Letter
- Specimen
Trust/Section 8 Company Registration
A Section 8 Company is a type of non-profit organization in India, established with the primary objective of promoting charitable activities, arts, sciences, education, and sports. The unique aspect of a Section 8 Company is that any profits earned are reinvested to further these objectives and are not distributed among the members as dividends.
Key Features of a Section 8 Company
- Objective: Promote charitable causes, arts, science, education, and sports.
- Profit Utilization: Profits are utilized to advance the company’s objectives.
- Non-Profit Distribution: No dividends are distributed to members.
Advantages
Separate Legal Entity: Distinct from its members, enabling the company to own property and enter contracts in its own name.
Limited Liability: Members’ liability is limited to their share, protecting personal assets from the company’s debts.
Tax Benefits: Eligibility for various tax exemptions under the Income Tax Act and ability to receive CSR funds.
Credibility: Higher trust and transparency due to regulation under the Companies Act, 2013, with mandatory audits and annual filings.
No Minimum Capital Requirement: Flexibility in financial resources needed for incorporation.
Perpetual Succession: Continuous existence regardless of changes in membership or management.
Disdvantages
Regulatory Compliance: Extensive compliance requirements under the Companies Act, 2013, including mandatory audits and annual filings.
Limited Profit Distribution: Profits cannot be distributed to members, limiting financial incentives for investors.
Stringent Formation Process: Lengthy and complex process for obtaining government approval and incorporation.
Operational Restrictions: Restricted to promoting specified charitable objectives, limiting the scope of activities.
Government Control: Increased scrutiny and oversight from regulatory bodies.
Resource Intensive: High administrative and compliance costs compared to other non-profit structures.
Eligibility Criteria
1. Objective:
- Primary Purpose: The company must be established for promoting charitable objects such as commerce, art, science, education, research, social welfare, religion, charity, or protection of the environment.
- Non-Profit Distribution: The company must apply its profits or other income in promoting its objectives and must not pay any dividend to its members.
2. Founders:
- Individuals or Entities: The company can be formed by an individual or an association of individuals.
- Number of Members: A minimum of two members is required if the company is to be incorporated as a private limited company, and a minimum of seven members if it is to be incorporated as a public limited company.
3. Directors:
- Minimum Directors: A minimum of two directors if it is a private limited company, and a minimum of three directors if it is a public limited company.
- Director Identification Number (DIN): All directors must have a valid DIN issued by the Ministry of Corporate Affairs.
4. Regulatory Approvals:
- Approval from Central Government: A Section 8 Company requires a license from the Central Government, specifically from the Ministry of Corporate Affairs. This license confirms that the company is incorporated for promoting charitable purposes.
5. Incorporation Requirements:
- Digital Signature Certificate (DSC): All directors must have a DSC to sign electronic documents.
- Name Approval: The name of the company should not include the words “Private Limited” or “Limited” but should reflect its charitable nature.
- Memorandum of Association (MOA) and Articles of Association (AOA): These documents must specify the company’s objectives and the rules and regulations for its operation.
6. Financial Requirements:
- Capital: There is no specific minimum paid-up capital requirement for a Section 8 Company.
- Application of Income: The income and profits of the company must be used solely for promoting its charitable objectives.
7. Compliance with Companies Act, 2013:
- Provisions: The company must comply with the provisions of the Companies Act, 2013, including those related to the formation, management, and dissolution of the company.
- Annual Filings: The company must adhere to annual filing requirements and other compliance mandates as per the Companies Act, 2013.
8. Other Considerations:
- Tax Exemptions: Section 8 Companies are eligible for various tax exemptions under the Income Tax Act, provided they meet the prescribed conditions.
- No Profit Distribution: The company must not declare or pay dividends to its members.
Documents Required
1. Digital Signature Certificate (DSC):
- Required for all proposed directors and subscribers to sign electronic documents.
2. Director Identification Number (DIN):
- Required for all proposed directors (can be obtained during the incorporation process).
3. Name Reservation:
- Proposed names of the company (to be applied through the RUN service on the MCA portal).
4. Memorandum of Association (MOA):
- Drafted as per Section 8 requirements, outlining the objectives of the company.
5. Articles of Association (AOA):
- Drafted as per Section 8 requirements, detailing the rules and regulations for the company’s management.
6. Form INC-13:
- Application for the incorporation of a Section 8 Company.
7. Form INC-14:
- Declaration by a Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant in practice, affirming the MOA and AOA compliance.
8. Form INC-15:
- Declaration by each subscriber to the MOA and the first directors stating their intent to form the company.
9. Proof of Identity and Address for Directors and Subscribers:
- Identity Proof: PAN card, passport, voter ID, or driving license.
- Address Proof: Bank statement, utility bill (not older than 2 months), or passport.
10. Proof of Registered Office Address:
- Utility bill (electricity, water, gas) not older than 2 months.
- Rent agreement (if the office is rented).
- NOC from the owner of the premises (if applicable).
- Sale deed or property tax receipt (if the office is owned).
11. Form INC-9:
- Declaration by the subscribers and directors.
12. Consent to Act as Director (Form DIR-2):
- Signed consent from each director to act as a director of the company.
13. Passport-size Photographs:
- Recent passport-size photographs of all directors and subscribers.
Our happy clients say about us
Starting my business as a sole proprietorship was made incredibly easy with the guidance and support from SS Memane . Their team provided clear instructions and assistance throughout the process, making it seamless and stress-free. Highly recommended.
I couldn't be happier with the service provided by SS Memane for my sole proprietorship registration. They were efficient, professional, and knowledgeable, ensuring that everything was done correctly and promptly. Thank you for your excellent support!
SS Memane exceeded my expectations with their exceptional service for my proprietorship registration. From start to finish, they were responsive, thorough, and dedicated to ensuring a smooth process. I'm grateful for their expertise and would definitely choose them again!
- Copyright 2024 © SS Memane || Designed By || Mr. Sunil Memane