Section-8 Company Registration

Section 8 Company Registration: Overview and Key Information

A Section 8 Company refers to a company formed under the Indian Companies Act, 2013, with the objective of promoting commerce, art, science, sports, research, education, religion, environmental protection, charity, or other such causes. These companies aim to apply their income and profits toward the promotion of these objectives and are prohibited from paying dividends to their members.

Key Features of Section 8 Company

• Non-Profit Objective: The company cannot distribute its profits among its members but must reinvest the funds into promoting its stated objectives.
• No Requirement for Minimum Capital: Section 8 companies are not bound by any minimum paid-up capital requirements.
• Exemption from Stamp Duty: Section 8 companies are exempt from paying stamp duty during registration.
• Tax Benefits: Donors to Section 8 companies can receive tax deductions under sections 12AA and 80G of the Income Tax Act.
• No “Limited” or “Private Limited” Required: Unlike other companies, Section 8 companies are not required to use “Limited” or “Private Limited” in their name, reflecting their non-profit nature.

Benefits of Section 8 Company Registration

1. Credibility and Trust: Section 8 companies have higher credibility among donors, government departments, and other stakeholders due to their legal status.
2. No Dividend Payments: These companies cannot pay dividends to members, ensuring that profits are directed toward the social or charitable objectives.
3. Tax Exemption: The company benefits from tax exemptions and can also provide tax benefits to donors, enhancing fundraising opportunities.
4. Ease of Compliance: Section 8 companies generally have fewer compliance requirements than other business entities.
5. Greater Reach and Scope: Section 8 companies can work on a PAN-India basis, allowing them to reach a wider audience for their initiatives.

Documents Required for Section 8 Company Registration

1. Minimum 2 Directors: At least two directors are required to form the company. For a public company, a minimum of three directors is necessary.
2. PAN Card: Self-attested PAN card copies of members and directors.
3. Identity Proof of Directors: Valid documents such as passport, voter ID, Aadhaar card, or driving license.
4. Address Proof of Directors: Self-attested address proof (e.g., bank statement, electricity bill, or mobile bill), not older than two months.
5. Passport Size Photos: Two passport-size color photos of each member and director.
6. Business Address Proof: Documents such as property papers, electricity bill, or NOC from the property owner.
7. Authorized Share Capital: Information about the authorized share capital and the number of shares subscribed by members.
8. Details of Proposed Business: A brief description of the proposed activity, educational qualifications of members/directors, and contact information.