company registration under section 8
Company Registration Under Section 8: Promoting Non-Profit Organizations in India
Introduction:
In India, Section 8 company registration plays a crucial role in promoting non-profit organizations that aim to work for the betterment of society. With a focus on social welfare and philanthropic activities, these organizations are granted various benefits by the government to encourage their growth and impact. This article aims to explore the key aspects of company registration under Section 8 in India, highlighting its relevance and benefits for the Indian audience.
Understanding Section 8 Company:
A Section 8 company, also known as a non-profit organization (NPO) or a non-governmental organization (NGO), is established under Section 8 of the Companies Act, 2013. Unlike regular for-profit companies, Section 8 companies are formed with the primary objective of promoting social welfare, charity, education, art, science, religion, or any other useful object for society’s benefit. These organizations do not intend to generate profits for their members, shareholders, or directors but focus on leveraging resources to uplift communities or address societal issues.
Benefits and Key Features:
1. Tax Exemptions: One of the significant advantages of registering as a Section 8 company is the availability of tax exemptions. These organizations are eligible for tax benefits under Section 12A and 80G of the Income Tax Act, 1961. This exemption applies to both the company’s income and the donations made to it.
2. Limited Liability: Similar to other forms of companies, a Section 8 company offers limited liability protection to its members. This means that their personal assets are separate from the company’s liabilities, protecting them in case of any financial distress or legal matters.
3. No Minimum Capital Requirement: Unlike other types of companies that require a minimum capital infusion during registration, Section 8 companies do not have any such requirement. This provides flexibility to organizations that operate on limited resources or rely on public donations.
4. Credibility and Trust: Section 8 companies are often viewed as reliable and trustworthy organizations by the public, as they work for the betterment of society. This enhances their credibility and facilitates fundraising from individuals, corporations, and the government for various projects and activities.
Process of Company Registration Under Section 8:
The registration process for a Section 8 company involves several steps, which are as follows:
1. Obtaining DSC and DIN: The first step is to obtain Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for the proposed directors of the company.
2. Name Reservation: A unique and appropriate name for the Section 8 company must be selected and reserved with the Registrar of Companies (RoC).
3. Drafting the Memorandum and Articles of Association: The next step involves drafting the Memorandum of Association (MOA) and Articles of Association (AOA), outlining the company’s objectives and rules.
4. Filing the Application: Once the documents are prepared, the application for company registration under Section 8, along with the necessary fees, must be filed with the RoC.
5. Obtaining License: Upon verification of the application and necessary documents, the RoC grants a license to operate as a Section 8 company.
Conclusion:
Section 8 company registration serves as a vital framework for promoting non-profit organizations in India. By providing various benefits and encouraging social welfare initiatives, it facilitates the growth and impact of these organizations. The tax exemptions, limited liability shield, and credibility associated with Section 8 companies attract individuals, corporates, and government entities to contribute towards worthy causes. Registering a Section 8 company empowers individuals and groups to make a meaningful difference in society while abiding by the legal and regulatory framework.,
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company registration under section 8
This article is only published for informational purposes. Please consult your Chartered Accountant or Financial Advisor before making any important financial decisions.
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