Section 8 Companies

Section 8 Companies are not for benefit making substances which are enlisted under Section 8 company of the Companies Act, 2013 with the predefined objects of advancement of workmanship, trade, science, sports, training, research, social government assistance, religion, a noble cause, and assurance of climate or any such other item.

 

The permit to these Companies is given by the Central Government after legitimate examination of records.

The Salient Features of Section 8 Companies are as under:-

1. Segment 8 organizations can be consolidated as a Private Limited or Public Limited. The administrative consistency of the Company relies on the idea of the Company i.e Private Limited or Public Limited.

 

2. These Companies are enlisted with no addition Private Limited or Public Limited to imply the predetermined nature.

 

3. It is a sort of non-Profit Organization, where the Company is expected to use all its benefit for the achievement of its predefined object.

 

4. The revelation of profit to individuals is restricted for these sorts of substances.

 

5. These sorts of Companies can be enrolled under Section 12A of Income Tax Act 1961, Post which any gift made to such Companies becomes qualified for a gift under Section 80G of the Income Tax Act 1961.

 

Enrollment OF SECTION 8 COMPANY

 

The course of enrollment of a Section 8 Company is administered by The Registrar of Companies, Ministry of Corporate Affairs. The Applicant needs to make an online application with the Registrar of Companies alongside required records for the Incorporation of Section 8 Companies.

 

Enlistment of a Section 8 Companies includes drafting of different reports alongside Memorandum of Association and Articles of Association of the Company (hereinafter alluded to as MOA/AOA).

 

A Section 8 Company also requires a permit from the Central Government, which isn’t needed if there should arise an occurrence of a typical Private Limited Company as well as Public Limited Company. 

 

The candidate is expected to make an application for a permit of Section 8 Companies alongside the Incorporation of the Company.

 

The guideline necessities for Incorporation of a Section 8 Companies are as under:-

1. Chiefs and Shareholders of the Company

Chiefs are the people, who deal with the issues of the Company. Chiefs could conceivably be the member(s) of the Company.

 

 They are the employee(s) of the Company who are liable for the everyday administration undertakings and lead of business.

 

There is a necessity of somewhere around two chiefs and two investors for the Incorporation of a Section 8 Company as a Private Limited Company.

 

Records connected with Initial Proposed Directors and Shareholders, being supporters of the MOA/AOA of the Section 8 Company:-

 

Specifics of Documents

Proposed Directors

At least 2 in the event of Private Limited Company or 3 if there should arise an occurrence of Public Limited Company

Proposed Shareholders/Subscribers to MOA/AOA

At least 2 in the event of Private Limited Company or 7 if there should arise an occurrence of Public Limited Company

1 – Identity Proof

Elector ID/Passport/Aadhar Card/Driving License for both beginning or Proposed Directors and Shareholders

2 – Address Proof

Bank Statement/Telephone Bill/Electricity Bill/Water Bill (Should not be over 2 months old]

3 – PAN

For both Initial Proposed Directors and Shareholders

4-Digital Signature

For both Initial Proposed Directors and Shareholders

5 – DIN (Director Identification Number

For both Initial Proposed Directors and Shareholders

 6 – Contact Details

Portable Number and Email Id of both Initial Proposed Directors and Shareholders

7 – Occupation

For both Initial Proposed Directors and Shareholders

8 – Form INC-15

From the two Directors and Promoters

9 – Passport Size Photograph

Chiefs Only

No Requirement

10 – Consent Letter in Form DIR-2

Chiefs Only

No Requirement

11 – Interest in Other Entities

Chiefs Only

No Requirement

12 – Declaration for disapproval of Deposit

Chiefs Only

No Requirement

13 – Estimated Income and Expenditure

Endorsed by atleast two Directors

No Requirement

14 – Estimated Assets and Liabilities

Endorsed by atleast two Directors

No Requirement

15 – Brief Description of work

Endorsed by at least two directors

No Requirement

 

2. Name of the Company and Place of Registered Office Address

Each Company should have its name which should be particular from some other existing Company. There are sure rules which are recommended by the Ministry of Corporate Affairs concerning the accessibility of Name. 

 

The Registrar of Companies based on those rules given by MCA endorses or dismisses the name of the proposed Company. The proposed name of the segment 8 organization doesn’t contain the word Private Limited or Limited toward the finish of the proposed name.

 

Besides, every Company should have its enlisted office address where all the legal correspondence should be possible. Based on the Registered office of the Company, the Jurisdiction of the Company concerning ROC, Income Tax, GST, and other legal not set in stone.

 

Records connected with proposed name and spot of Registered office:-

S No

Subtleties expected for proposed names

Subtleties expected for proposed Registered office

1. Proposed Names (Minimum 2)

Duplicate of the Recent Utility bill (not over 2 months old) of the proposed premises, which ought to be in Principal Owner’s name

Service Bill covers Telephone Bill/Electricity Bill/Water Bill.

2. Any authentication/enrollment records supporting the proposed name of the Company. (Material in explicit cases)

No Objection Certificate from the important proprietor of the property, to involve the premises for the reasons for Registered Office of the proposed Section 8 Company if the property isn’t for the sake of the proposed Company.

3. Duplicate of the Rent Agreement/Lease Deeds assuming the property is taken on lease/rent.

 

3. Head Main Objects of the Company

This is one of the main perspectives for the Incorporation of a Section 8 organization. The object of the Company ought not to be other than objects of advancement of workmanship, business, science, sports, instruction, research, social government assistance, religion, a noble cause, assurance of climate, or any such item which are connected with good cause.

 

The proposed object structure portions of Memorandum of Association of the Company. Moreover, the MOA contains the insights concerning Name of the Company, State of Registered office of the Company, Objects of the Company, Liability of the Member, Share Capital of the Company, and Subscriber’s sheet. The MOA is drafted based on data given by the candidate.

 

The Articles of Association of the Company are the bye-laws of the Company, which gives decides and guidelines that administer the Company’s inner issues.

 

4. The measure of Initial Authorized and Paid Up Share Capital

The Share capital of the Company is separated into two sections, Authorized Share Capital and Paid-up Share Capital.

 

Approved Share Capital: Authorized Share Capital is the general roof share capital, which is endorsed by the investors of the Company, up to which the Board of Directors can raise assets from the Shareholders/Investors of the Company by giving offers. The Initial Authorized Share Capital is still up in the air by settling on the and the Initial Number of Ceiling Shares, and The Face Value of each Share (Re. 1 to Rs. 1000 or by and large),

 

Approved Share Capital = Initial Number of Ceiling Shares * Face Value of Each Share

 

Settled Up Share Capital: Paid Up Share Capital is the Capital that is raised by the Company from the investors by giving offers. This is a subset of the Authorized Share Capital, still up in the air by how much starting cash to be settled up in the Company’s financial balance, to start the business tasks.

 

Settled Up Share Capital = Initial Number of Paid-Up Shares * Face Value of Each Share

 

The cycle of Incorporation of a Section 8 Company

1. Accommodation of the Application for Incorporation –

An Applicant is expected to make an application to the Registrar of Companies for Incorporation of the Companies alongside the necessary subtleties and records.

 

The Application should be possible in 2 ways:-

1. Candidate requirements to initially apply for accessibility of Name, when the name is endorsed then he/she wants to record further application with Registrar of the Companies for joining of the Company alongside every one of the archives.
2. Candidate to straightforwardly record the structure for Incorporation of the Company alongside the proposed name and every one of the expected archives.

 

The distinction in the two cycles is that the Applicant gets the affirmation for the name in the first technique and afterward continues for Incorporation, while the Applicant records the total archives and application in the subsequent strategy, without getting the affirmation for the name, which might be protested a short time later by the ROC.

 

Thusly, an Applicant ought to pick the primary strategy on the off chance that, he is searching for a particular name, while he might continue for the second on the off chance that he is available to acknowledge the name as proposed by the ROC.

 

2. Affirmation by the Practicing Professional :

The Application is expected to be ensured by rehearsing proficient like Chartered Accountants/Company Secretary/Cost Accountant, who will check the accuracy of the application.

For consolidation of Section 8 Companies, a statement from rehearsing proficient in the structure INC-14 is likewise expected to be connected with the application.

Post the check and affirmation of the experts, the application needs to be recorded with the concerned Registrar of the Companies on the web, who will examine the application made for Incorporation.

 

RECOMMENDED READ: NIDHI COMPANY REGISTRATION 

 

3. A survey by the Registrar of Companies:

When the Registrar of Companies, is happy with the application documented, he/she will give the Certificate of Incorporation of the Company.

 

4. Revelation before the beginning of Business :

When the Company is joined and has gotten the Certificate of Incorporation from Registrar of Companies.