How to Register an NGO – Section 8 Company in India
NGO (Non-Government Organisation) is an organization that works for non-profit/ charitable purposes. In this article, we will explain how to register as NGO in the form of Section 8 Company, under the Companies Act, 2013.
Section 8 companies are the legal entities that are started with an object of promoting social welfare, education, charity, art, science, religion and other activities essential to benefit the society at large. These section 8 companies are synonymous with Non-profit organizations (NPO). Section 8 companies are essentially incorporated to perform the main object of the welfare of the society in any of the fields as mentioned above. B. Pramanik & Associates NGO Registration Consultant in India and expert for Section 8 Company Registration.
Laws in India applicable to an NGO
NGOs can be registered in India under any of the following laws: a. Trust under Indian Trusts Act, 1882 b. Society under Societies Registration Act 1860 c. Section 8 Company under Companies Act, 2013
Purpose of NGO – Section 8 Company
The main purpose of establishing a company as a Section 8 company is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports, research, etc. The profits/incomes of the company if any, are applied towards promoting the objectives of the company and are not distributed as dividends to its shareholders. A minimum of two directors is required if the Section 8 company is to be incorporated as a private limited company, and a minimum of three directors in case of incorporation as a public limited company. The maximum number of members is 200 in the case of a private limited company, whereas for a public limited company, there is no such limit. Also, there is no requirement of minimum paid-up capital in the case of a Section 8 company.
Procedure for incorporation of a Section 8 company
Step 1 – Obtain a DSC of the proposed Directors of the Section 8 Company. Once a DSC is received, file Form DIR-3 with the ROC for getting a DIN.
Documents to attach for DIN application: Proof of Identity and Address Proof.
Step 2 – Once the DIR-3 is approved, the ROC will allot a DIN to the proposed directors.
Step 3 – File Form INC-1 with the ROC for applying for a company name. A total of 6 names can be applied for in order of preference, out of which one would be allotted, based on availability.
Step 4 – After approval, file form INC-12 with the ROC to apply for a license for the Section 8 company. Documents to attach with INC-12:
- Draft MOA as per Form INC-13
- Draft AOA
- Declaration as per Form INC-14 (Declaration from Practicing Chartered Accountant)
- Declaration as per Form INC-15 (Declaration from each person making application)
- Estimated Income & Expenditure for next 3 years.
The subscription pages of the Memorandum and Articles of Association of the company shall be signed by every subscriber along with mentioning his name, address, and occupation, in the presence of at least one witness who shall attest the signature and sign and add his name, address, and occupation.
Step 5 – Once the form is approved, a license under section 8 will be issued in Form INC-16.
Step 6 – After obtaining the license, file SPICE Form 32 with the ROC for incorporation along with the following attachments:
- An affidavit from all the directors’ cum subscribers – INC-9
- Declaration of deposits
- KYC of all the Directors
- Form DIR-2 with its attachments i.e PAN Card and address proof of the directors
- Consent letter of all the directors
- Interest in other entities of the directors
- Utility bill as a proof of Office address
- NOC in case the premises are leased/rented
- Draft MOA and AOA If the ROC is satisfied with the forms submitted, he issues a Certificate of Incorporation along with a unique Company Identification Number (CIN).
Documents Requirement for the Registration of Section 8 Company
- Digital Signature Certificate
- Memorandum of Association
- Articles of Association
- Passport Size Photographs
- Members’ Id Proof such as Aadhar Card, Passport, Voter Id
- Details of Director (When the Members Are Other Companies/LLPs)
- Address Evidence
- Director Identification Number
Now let us understand various advantages of Section 8 Company Registration:
1) Tax Exemption
Numerous Tax exemptions are provided to Section 8 Companies, specifically to the donors who are contributing to Section 8 Companies, they can claim the Tax exemption against the donation they made to a Section 8 company.
2) No minimum capital requirement
There is no prescribed limit over section 8 companies for the minimum capital requirement unlike other entities such as public limited, but the capital structure can be altered at any stage as required for the growth of the company.
3) No stamp duty payable
A section 8 Company is exempted for the payment of stamp duty applicable for registration as applicable in the case of other structures such as private limited or a public limited company.
4) Separate Legal entity
A Section 8 Company also holds its own identity like other companies’ structures and has its own separate legal standing from its member. A Section 8 Company also has perpetual existence.
5) Credible
A Section 8 Company has more credibility as compared to any other Non-profit organization structure be it a Trust or Society. As it is licensed by the central government. It has more stringent regulations such as no change in MOA and AOA can be done at any stage or situation in a Section 8 Company. A section 8 company due its strict compliances as regard to functioning has a more reliable image in comparison to other legal structures.
6) No title is required
Unlike the name’s requirements of the private limited or a public limited company, a section 8 company does not require to use a suffix next to its name.
Why B. Pramanik & Associates?
B. Pramanik & Associates is a Company Registration Consultancy providing NGO Formation, Trust Formation, Company Formation, Company Auditing, Section 8 Company Registration related to all types of registration & legal services. B. Pramanik & Associates having Professional Network Chartered Accountants, Company Secretaries, Advocates, MBAs, and other professionals to provide the best quality services on-time delivery with proper guidance.
If you want more information about Section 8 NGO Registration then you can feel free to contact our Team, they will guide you to register Section 8 company in India.
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