SECTION-8 COMPANY REGISTRATION

Legal Meaning: As per Section 8 of the Companies Act 2013, Where it is proved to the satisfaction of the Central Government that a person or an association of persons proposed to be registered under this Act as a limited company.


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REGISTRATION


OTHER THAN THE CONDITIONS LAID DOWN IN ITS DEFINITION ABOVE, THE FOLLOWING CRITERIA MUST BE FULFILLED AS WELL FOR REGISTERING A SECTION 8 COMPANY

1. Registration Under: Companies Act, 2013.
2. License: License to be applied to MCA.
3. Directors: A Minimum of 2 Directors for a Private Limited Company and 3 Directors for Public Limited Company must be there. The maximum limit is of 15 Directors. More than that can be appointed after passing a special Resolution in a general Meeting.
4. Subscribers to MOA: If the Company is proposed to be incorporated as a private company or public company respectively, its MoA must have at least 2 or 3 subscribers.
5. MoA & AoA: Decide about the name to be applied for, objects to be carried by the Company, planned registered office address, number of Directors and promoters, authorized capital, and number of shares to be subscribed by each promoter.
6. Indian Resident: At least 1 director must be a resident of India, stayed in India for total period of not less than 182 days in previous calendar year.
7. Property Management: The ownership of the property lies in the name of the Company and it can only be sold as per the rules mentioned under the Companies Act.
8. Dissolution:Upon dissolution and after settling all debts and liabilities, the funds and property of the society are not to be distributed among the members of the company.
9. Annual Compliance : Annual filing of accounts, statements and the returns of the company are required to file with the ROC


BENEFITS OF SECTION 8 COMPANY

1. Distinct Legal Identity: Section 8 Company has a separate legal entity. Different from its members. Its legal standing is different from its members. The Company has a perpetual existence. Along with having organized operations and greater flexibility.
2. Zero Stamp Duty: A Section 8 Company is exempt from the requirement of paying stamp duty on the MoA and AoA of the private or public limited company. Which is applicable for registration of other kinds of company structures.
3. No Minimum Capital Requirement: No minimum capital limit has been mentioned for a Section 8 Company in India. And the capital structure may be altered at any stage as per the growth requirements of the company. This implies that it can be formed without any share capital. The funds necessary for carrying the business operations can be brought, later, in the form of donations and/or subscriptions from members and the general public.
4. Name: Section 8 Company does not need to suffix Limited or Private Limited, next to its legal name. It can be registered with names that have words like Association, Society, Council, Club, Charities, Foundation, Academy, Institute, Organisation, and Federation.
5. CARO: Requirements of Companies Auditor’s Report Order or CARO do not apply to this type of company.
6. Tax Benefits: For Section 8 Companies in India, many tax benefits are granted.


PROCEDURE FOR INCORPORATION OF SECTION 8 COMPANY

Step 1:Making an application for name availability in SPICe+ (Simplified Proforma for Incorporating company Electronically Plus: INC-32)] to the Registrar for a license under sub-section (1) of section 8.
Step 2: Preparation of MOA and AOA:
Memorandum of Association of Section 8 Company must be in form INC-13 while there is no format prescribed for Articles of Association for Section 8 Company. One can adopt table F provisions.
Step 3: An application in Form No. INC.12 has to be submitted along with below-mentioned documents to the Registrar of Companies
Form no. INC–13 – Company’s Draft MOA and AOA in Form No. INC – 13 (as specified in Act) along with the affixation of subscribers’ photographs.
Form no. INC-14 – A Declaration is to be affixed in Form no. INC-14 that the draft MOA & AOA are compliant with the provisions & norms of section 8 of the companies act 2013.
Note: The declaration has to be made on stamp paper & should be notarized by an Advocate, a Company Secretary, a Chartered Accountant or a Cost Accountant, practising the profession.
Form no. INC-15 – A declaration in Form no. INC-15 on stamp paper & notarized by each member of the company who is applying
Form no.INC-9- Form no. INC-9 form first directors as well as each subscriber, on the relevant State’s stamp paper and appropriately notarized.
Step 4 : Filing of SPICe 32 Form
Step 5: Filing of Documents and Forms for Registration
An estimation of the company’s future annual income and expenditure for the next three years, mentioning the sources of the income and the purpose of the expenditure
Step 6: Registration and Filing Fee: The fee shall be as provided in the Companies (Registration Offices and Fees) Rules, 2014.
Step 7: Scrutiny of Forms and Documents by Registrar.
On receipt of the aforementioned documents and forms, the office of the Registrar of Companies will scrutinise them and if they are found complete in all respects, the Registrar will register the company and allot CIN.
Step 8: Issue of Certificate of Incorporation by Registrar: A Certificate of Incorporation will be issued by the Registrar of Companies under his hand and seal of his office and sent electronically. One may take printout of Certificate of Incorporation which is generated online.

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