Section 8 Company

Incorporating a Section 8 Company in India involves specific legal procedures and requirements aimed at promoting charitable and not-for-profit activities. Section 8 Companies are registered under Section 8 of the Companies Act, 2013, and are primarily formed for promoting art, science, commerce, education, charity, social welfare, religion, environment protection, or other similar objectives. Here are the key steps and requirements for incorporating a Section 8 Company:

Minimum Requirements:

a. Minimum Directors: At least two individuals must act as directors of the company.

b. Minimum Members: A Section 8 Company must have a minimum of two members/shareholders.

c. No Profit Distribution: The company must not distribute profits among its members and should apply its income and profits towards promoting its charitable objectives.

Name Reservation:

Choose a unique name for your Section 8 Company and ensure it complies with the naming guidelines specified by the Ministry of Corporate Affairs (MCA). The name should include the terms "Foundation," "Association," "Society," "Council," "Club," "Charity," "Institute," "Organization," "Federation," "Trust," "Academy," or other similar words.

Memorandum of Association (MoA) and Articles of Association (AoA):

Draft the MoA and AoA, outlining the company's objectives, rules, and regulations governing its operations. The MoA should specify the charitable or not-for-profit activities that the company intends to undertake.

Digital Signature Certificate (DSC) and Director Identification Number (DIN):

Obtain DSC for all proposed directors and apply for DIN, which is mandatory for directors of a company.

Application for Incorporation:

Prepare the necessary documents, including MoA, AoA, DSCs, and DINs, and file the application for incorporation of the Section 8 Company with the Registrar of Companies (ROC) through Form SPICe (Simplified Proforma for Incorporating Company Electronically).

License under Section 8:

After receiving the application, the ROC will review the documents and, if satisfied, grant a license under Section 8 of the Companies Act, 2013, allowing the company to operate as a charitable or not-for-profit entity.

Compliance Requirements:

a. Annual Compliance: Conduct annual compliances such as filing of annual returns, holding annual general meetings, maintaining proper accounts, etc.

b. Charitable Activities: Ensure that the company's activities align with its charitable or not-for-profit objectives as specified in the MoA.

c. Restrictions on Profit Usage: Comply with the restrictions on profit usage, as the company cannot distribute profits among its members.

It's essential to seek professional advice and guidance from legal and financial experts familiar with Section 8 Company regulations to ensure a smooth and compliant incorporation process.