How to register Section 8 Company?

Running a non-profit organization (NGO) is a noble endeavor that allows you to contribute to the betterment of society, particularly for the less privileged. If you are considering registering your NGO in India, it is crucial to understand the different types of NGOs operating in the country. While Trusts and Societies are more familiar, Section 8 Company Registration are a relatively recent development under the Companies Act, 2013. This article will delve into the process of Section 8 Company registration in India, outlining the necessary steps and procedures involved.

Why to register Section 8 Companies

Section 8 Companies, registered under the Companies Act, 2013, and its predecessor Section 25 Company under the Companies Act, 1956, are entities established for non-profit purposes. These companies engage in activities related to sports, commerce promotion, art, technology, education, research, social welfare, religion, charity, environmental protection, or any other similar objectives. Moreover, they commit to utilizing their income or other funds solely for promoting their objectives and restrict the payment of dividends to their members.

Registration Process for Section 8 Company in India

To register a Section 8 Company, you must follow the prescribed procedures outlined in the Companies Act, 2013. During the Section 8 company registration process, the promoters are granted a Section 8 License Letter in addition to the Certificate of Incorporation. It is highly recommended to seek the guidance of a professional, such as a Company Secretary well-versed in Company Law provisions, to ensure a smooth and error-free incorporation process.

Step-by-Step Procedure for Section 8 Company Registration

1. Filing of Name Application of Section 8 Company in SPICE PART A: The name of the Section 8 Company Incorporation should include terms such as Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust, etc. You can file a maximum of two names in order of preference. If the first two choices are unavailable, you can file for resubmission with two additional names. The filing fee for SPICE Part A is Rs. 1000/-, and the reserved name is valid for 20 days. Extension requests for 40/60 days can be made with an additional fee.

2. Obtaining digital signatures of first directors/shareholders: The next step involves obtaining Class III Digital Signatures of the first subscribers and directors. These signatures are necessary for filing the Incorporation Form SPICE PART B with the Ministry of Corporate Affairs (MCA).

3. Drafting the Memorandum of Association and Articles of Association: These documents serve as the constitution of the Section 8 Company, defining its activities and internal governance. The Memorandum of Association (MOA) should be in Form INC-13, while there is no prescribed format for the Articles of Association (AOA). Both the MOA and AOA should be signed by each subscriber in the presence of at least one witness who will attest to the signatures.

4. Drafting other required documents as per company law: Apart from the MOA and AOA, several other documents need to be drafted during the Section 8 Company incorporation. Professional firms with experienced Company Secretaries can assist in preparing these documents.

5. Filing of SPICE PART B: Before filing Form SPICE 32, ensure that all the required documents are complete and accurate. It is advisable to thoroughly review the documents beforehand.

6. Attachments of SPICE 32: The following documents should be attached to SPICE 32:

a. Memorandum of Association
b. Articles of Association (no specific format)
c. Declaration in Form INC-14 by CS/CA/CWA in practice
d. Declaration by each promoter applying in Form INC-15
e. Estimate of future annual earnings and expenditure for three years
f. Consent and declaration of first directors in Form DIR-2
g. KYC documents of the promoters
h. Evidence of registered office (e.g., sale deed, lease agreement)
i. Utility bill of registered office (e.g., power bill)
j. NOC from the owner if the registered office is on rent

Note: For Section 8 Company incorporation, Spice 33 and 34 e-MOA and e-AOA cannot be used. Instead, the MOA and AOA should be drafted as PDF attachments to SPICE-32.

Learn what are the annual compliance of section 8 company.

Conclusion

Once the Ministry of Corporate Affairs (MCA) is satisfied with the submitted documents and information, they will issue the Certificate of Section 8 Company Incorporation, along with PAN and TAN. Additionally, the Section 8 License Letter will be issued immediately. Compliance Calendar, a professional team well-versed in the step-by-step procedures, can assist you with the registration process for Section 8 Companies in India. By making India a land of givers, together, we can support humanity. For any queries or concerns, feel free to schedule a one-time free consultation by contacting [email protected] or WhatsApp 9988424211.