SECTION 8 COMPANY
Last udpated: July 14, 2021, 5:09 p.m.
Section 8 License Company Concept and Rules
It is a Company which is formed under section 8 of Companies Act, 2013 and the main objects behind it’s formation is to promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
It is a Non - Profit Organization that means there are two restrictions are imposed by Law on it –
- It can apply its profits, if any, or other income in promoting its objects only, and
- It is Prohibited to payment of any dividend to its members.
The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.
The name of such a company must not be ended with a word “limited” or “private limited” instead the last name of such type of companies must be ended with a word “foundation” or “association”.
- No Minimum Paid up Capital requirement.
- Tax exemptions
- More credible than trust or society.
Procedure for Incorporation –
- Prepare Following Documents –
- Draft MOA in the form INC- 13.
- Draft AOA in the form of Table F.
- A Declaration by the Professionals (Advocate/CA/CS/CMA) in the form INC – 14 that the memorandum of association and articles of association have been drawn up in conformity with the provisions of section 8 and rules made thereunder and that all the requirements of the Act and the rules made thereunder relating to registration of the company under section 8 and matters incidental or supplemental thereto have been complied with.
- Projected 3 years Income & Expenditure Account.
- A Declaration by Subscribers of MOA in the form of INC – 15.
- Reserve unique name through MCA web portal by submittion of Spice+ (Part A).
- Proceed for Incorporation of company through MCA web portal by submittion of Spice+ (Part B).
- If ROC is satisfied by the above filings then it shall issue licence in the form of INC – 16 (for newly registered Companies) or INC – 17 (for existing limited companies converted into section 8)