How to Make a Section 8 Company

Creating How to Make a Section 8 Company in India is a rewarding endeavor for those passionate about social causes and community welfare. A Section 8 company, as per the Companies Act, 2013, is a legal entity established to promote charitable activities, including social welfare, education, art, and culture. These companies do not aim to make profits and their income is utilized for promoting their objectives. Here’s a step-by-step guide on how to form a Section 8 company.

Step 1: Understand the Requirements and Objectives

Eligibility

• Individuals or Associations: Any individual or association of persons can apply to form a Section 8 company.
• Charitable Objectives: The primary objectives must be to promote commerce, art, science, sports, education, research, social welfare, religion, charity, or environmental protection.

No Profit Distribution

• Profits, if any, or other income must be applied solely for promoting the company’s objectives.
• No dividend is paid to its members.

Step 2: Apply for Digital Signatures (DSC)

Why DSC?

Digital Signatures are required for electronically signing the documents to be submitted to the Registrar of Companies (RoC).

How to Obtain DSC

• Authorized Agencies: Contact authorized agencies like e-Mudhra or Sify to obtain a DSC.
• Documents Required: Identity proof (PAN card) and address proof (Aadhaar card, passport, driver’s license, or voter ID).

Step 3: Obtain Director Identification Number (DIN)

Application for DIN

Directors of the proposed company must obtain a DIN by filing Form DIR-3, available on the Ministry of Corporate Affairs (MCA) portal.

Documents Required

• Photograph
• Identity proof
• Address proof
• DSC

Step 4: Name Approval

Choose a Name

Select a unique name for the company that reflects its objectives. It’s advisable to check name availability on the MCA portal.

File for Name Approval

Submit Form INC-1 for name approval to the RoC, with up to six name options, in order of preference. Ensure the names do not violate the Emblems and Names (Prevention of Improper Use) Act, 1950.

Step 5: Draft Memorandum and Articles of Association

Memorandum of Association (MoA)

• Objectives: Clearly state the main objectives of the company.
• No Profit Motive: Mention that the company will not distribute profits as dividends.

Articles of Association (AoA)

• Rules and Regulations: Define the rules governing the company’s operations.
• Management Structure: Detail the management structure and roles of directors.

Step 6: File Incorporation Forms

Forms to be Submitted

• Form INC-12: Application for license under Section 8.
• Form INC-13: Memorandum of Association.
• Form INC-14: Declaration by an advocate, Chartered Accountant, Cost Accountant, or Company Secretary in practice, that the draft MoA and AoA have been drawn up in conformity with the provisions of the Act and rules made thereunder.
• Form INC-15: Declaration by each person making the application, that they will comply with the requirements of Section 8.
• Form INC-9: Declaration by subscribers, affirming no conviction of any offence in connection with the promotion, formation, or management of any company.
• Form INC-16: License to operate as a Section 8 company.
• Form DIR-2: Consent of directors.

Submission

Upload the forms on the MCA portal, along with required documents and prescribed fees.

Step 7: Obtain Certificate of Incorporation

Verification

The RoC will verify the submitted documents. Upon satisfaction, the RoC will issue a Certificate of Incorporation.

License

Along with the Certificate of Incorporation, a license under Section 8 will be granted.

Step 8: Post-Incorporation Compliance

PAN and TAN

• Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.

Bank Account

• Open a bank account in the name of the company.

Statutory Compliance

• Maintain proper books of accounts.
• Conduct regular board meetings and maintain minutes.
• File annual returns and financial statements with the RoC.

Also Read: How to Register a Section 8 Company Online in India

Conclusion

Forming a Section 8 company involves a detailed process, ensuring that the entity operates with a clear focus on social welfare and charitable objectives. The legal structure provided by a Section 8 company not only facilitates organized operations but also helps in gaining credibility and trust from donors and stakeholders. By following the steps outlined above, you can establish a Section 8 company and contribute meaningfully to societal development.

Remember, while the process may seem complex, the impact of running a Section 8 company can be profoundly fulfilling, knowing that your efforts are making a positive difference in society.