WHAT IS SECTION 8 COMPANY?

1. Tax benefits

2. No Stamp duty

3. Creditability

4. No Minimum Capital Requirement

5. Limited liability

6. Name

Indian Societies and Trusts are governed by State laws while Section 8 companies have one uniform law across the country i.e. Companies Act, 2013. Section 8 Company is more closely regulated and monitored than trusts and societies and recognized all over the country. The working ofSection 8 Company is highly transparent as everything is into public domain. Consider forming a Section 8 company if you want to undertake wide range of activities and if you want reliability and credibility for your organization, as it is licensed by Central Government. Learn More »

Section 8 Company can raise funds through following ways:

1. Domestic donations

2. 2. Foreign Donations

3. 3. CSR Funding

4. 4. Equity Fundingf

1. PAN card, Aadhar card and photograph of the proposed director

2. ID proof of proposed Directors and members (anyone):

3. Address proof of proposed members and directors (anyone)

4. Address proof for the principal place of business of the proposed company

1. Apply for name

2. Apply for Digitial Signatures

3. Preparation of MOA and AOA

4. Filing of Form SPICe+

5. Issue of Certificate of Registration and License

6. Stock exchange

1. Conduct of minimum of two board meetings in a year. Apply for name

2. Conduct of Annual General Meeting (AGM) once a year within 6 months of the end of financial year.

3. Book of accounts and annual returns of the company shall be audited by the statutory auditor who will be appointed for a period of 5 years.

4. Preparation and filing of Financial Statements in form AOC-4 to be filed within 30 days of the Annual General Meeting

If a Section 8 Company fails to comply with legal provisions, then central government may revoke the license issued under the Companies Act. If the operations of the Company are found to be conducted fraudulently or in violation with the objects of the Company or are unfavorable to public interest. then also, the license can be revoked.

If a company defaults in complying with the provisions of the Act, it shall, without prejudice to any other action under the provisions of this section, be punishable with a fine which shall not be less than Rs.10 lakh and may extend to Rs.1 crore. The Directors and all other officers of the company, found in default, shall be punishable with imprisonment for a term which may extend to 3-years, or with fine not be less than Rs.25, 000 which may extend to Rs.25 lakh, or both. Provided that it is proved that operations were conducted fraudulently. Then every officer in default shall be liable for action.

Any such order shall not be passed unless the company has been given a reasonable opportunity of being heard.

The Government of India has launched NGO Darpan portal to maintain a centralised database of NGO’s working in India. In today’s time if any NGO applies for the Government grant then it is mandatory for them to get NitiAayog Registration by registering with NGO Darpan Portal.
Further, as per Notification issued by Ministry of Corporate Affairs dated 22nd January 2021, it is mandatory for all NGO’s which wants to raise CSR (Corporate Social Responsibility) Funding to enroll with MCA w.e.f 01/04/2021 to get CSR Funding.
Section 8 Company is also eligible to file Form CSR-1 on MCA Portal for getting CSR Funding. However, Section 8 Company should be registered under section 12A and 80G of the Income Tax Act to apply for CSR funding. As per the amended section 135 of the Companies act, 2013, company shall spend 2% of the average net profits on self-managed CSR activities or contribute the CSR Funds to the eligible NGO. To become eligible for receiving the CSR Grant from the companies, the section 8 company must register with the ROC by filing the prescribed form CSR-1 and obtaining a Unique CSR Registration Number.
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1. Annual compliances of Section 8 Company under Companies Act, 2013 are complex as compared to societies and trusts where there are minimal compliances.

2. Profit or income of the Company is applied for the promotion of the main object only.