Section 8 Company under Companies Act, 2013
WHY INCORPORATE A SECTION 8 COMPANY?
- A section 8 company is incorporated for promotion of objects of commerce, art, science etc.
- It is registered as a limited company and enjoys all its privileges, and be subject to all the obligations of limited companies.
- A firm may be a member of the company registered under this section.
- It is issued a license by the Central Government.
- It is exempted from some provisions of the Income Tax Act, 1961.
It is prohibited from the payment of any dividend to its members.
PROCESS OF INCORPORATION OF A SECTION 8 COMPANY
- Obtain Digital Signature Certificate (DSC) for the proposed director(s): First of all, the basic requirement to incorporate a company is having a DSC as all the filings to the Registrar of Companies are made through an online application system which is appended with a valid DSC.
- Obtain Director Identification Number (DIN) for the proposed director(s): DIN is a unique Identification number allotted by the Central Government to any person intending to be a director of a company.
- Select suitable company name and make an application to the MCA for availability of name: The name of a section 8 company without the addition of the words “Private Limited or Limited” and the company name shall comply with the Company Name Availability Guidelines under the Companies Act, 2013.
- License requirement: The proposed company shall apply to the Central Government for license in a prescribed form, as may be prescribed under Companies (Incorporation) Rules, 2014, before incorporation of company.
- Capital requirement: There is no minimum capital (authorised or paid up capital) requirement for registering a public company.
- Registered office: It is the principal place of business of the proposed company from where it can control its operations.
- Documentation & Filing: Documents, such as Memorandum of Association (MOA) and Articles of Association (AOA), need to be drafted, signed and filed electronically, along with the fees applicable.
Certification of Incorporation: After scrutiny, the Central Registration Centre (CRC) issues a Certificate of Incorporation.
Generally, it takes 25-30 days from the date of application to get the Certificate of Incorporation from CRC.
Following additional documents are required:
- A copy of declaration, by each person making the application, in the prescribed format as per the Company (Incorporation) Rules, 2014.
- All copies of the documents must be self-attested by the document holder.
- Telephone bill/ mobile bill/ electricity bill/ bank account statement must be in the name of the applicant and should not be older than 2 months.
- In case of documents that are in languages other than English, it should be transferred to English with the help of a professional translator, carrying his details (name, signature, address, and seal).