Section 8 Companies
Segment 8 Companies are not for benefit making elements which are enrolled under Section 8 Companies Act, 2013 with the predetermined objects of advancement of workmanship, trade, science, sports, instruction, research, social government assistance, religion, a noble cause, and security of climate or any such other item.
The permit to these Companies is given by the Central Government after appropriate examination of records.
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The Salient Features of Section 8 Companies are as under:-
- Area 8 organizations can be joined as a Private Limited or Public Limited. The administrative consistency of the Company relies on the idea of the Company i.e Private Limited or Public Limited.
- These Companies are enrolled with next to no addition Private Limited or Public Limited to mean the predefined nature.
- It is a kind of non-Profit Organization, where the Company is expected to use all its benefit for the accomplishment of its predefined object.
- Announcement of profit to individuals is disallowed for this kind of element.
- These sorts of Companies can be enlisted under Section 12A of Income Tax Act 1961, Post which any gift made to such Companies becomes qualified for a gift under Section 80G of the Income Tax Act 1961.
Enlistment OF SECTION 8 COMPANY
The course of enlistment of a Section 8 Company is represented by The Registrar of Companies, Ministry of Corporate Affairs.
The Applicant needs to make an online application with the Registrar of Companies alongside the required archives for the Incorporation of Section 8 Companies.
Enlistment of a Section 8 Companies includes drafting of different records alongside Memorandum of Association and Articles of Association of the Company (hereinafter alluded to as MOA/AOA).
A Section 8 Company also requires a permit from the Central Government, which isn’t needed if there should arise an occurrence of an ordinary Private Limited Company or potentially Public Limited Company.
The candidate is expected to make an application for a permit of Section 8 Companies alongside the Incorporation of the Company.
The standard necessities for Incorporation of a Section 8 Companies are as under:-
- Chiefs and Shareholders of the Company
Chiefs are the people, who deal with the issues of the Company. Chiefs might be the member(s) of the Company.
They are the employee(s) of the Company who are answerable for the everyday administration issues and directors of the business.
There is a prerequisite of somewhere around two chiefs and two investors for the Incorporation of a Section 8 Company as a Private Limited Company.
Archives connected with Initial Proposed Directors and Shareholders, being supporters of the MOA/AOA of the Section 8 Company:-
S.No.
Points of interest of Documents
Proposed Directors
At least 2 if there should arise an occurrence of Private Limited Company or 3 in the event of Public Limited Company
Proposed Shareholders/Subscribers to MOA/AOA
At least 2 if there should arise an occurrence of Private Limited Company or 7 in the event of Public Limited Company
1 – Identity Proof
Citizen ID/Passport/Aadhar Card/Driving License for both starting or Proposed Directors and Shareholders
2 – Address Proof
Bank Statement/Telephone Bill/Electricity Bill/Water Bill (Should not be over 2 months old]
3 – PAN
For both Initial Proposed Directors and Shareholders
4-Digital Signature
For both Initial Proposed Directors and Shareholders
5 – DIN (Director Identification Number
For both Initial Proposed Directors and Shareholders
6 – Contact Details
Versatile Number and Email Id of both Initial Proposed Directors and Shareholders
7 – Occupation
For both Initial Proposed Directors and Shareholders
8 – Form INC-15
From the two Directors and Promoters
9 – Passport Size Photograph
Chiefs Only
No Requirement
10 – Consent Letter in Form DIR-2
Chiefs Only
No Requirement
11 – Interest in Other Entities
Chiefs Only
No Requirement
12 – Declaration for renunciation of Deposit
Chiefs Only
No Requirement
13 – Estimated Income and Expenditure
Endorsed by at least two directors
No Requirement
14 – Estimated Assets and Liabilities
Endorsed by at least two directors
No Requirement
15 – Brief Description of work
Endorsed by at least two directors
No Requirement
- Name of the Company and Place of Registered Office Address
Each Company should have its own name which should be unmistakable from some other existing Company.
There are sure rules which are endorsed by the Ministry of Corporate Affairs with respect to accessibility of Name.
The Registrar of Companies based on those rules given by MCA supports or rejects the name of the proposed Company. The proposed name of the area 8 organization doesn’t contain the word Private Limited or Limited toward the finish of the proposed name.
Besides, every Company should have its own enlisted office address where all the legal correspondence should be possible. Based on the Registered office of the Company, the Jurisdiction of the Company as for ROC, Income Tax, GST, and other legal not set in stone.
Records connected with proposed name and spot of Registered office:-
S No
Subtleties expected for proposed names
Subtleties expected for proposed Registered office
- Proposed Names (Minimum 2)
Duplicate of the Recent Utility bill (not over 2 months old) of the proposed premises, which should be in Principal Owner’s name
Service Bill covers Telephone Bill/Electricity Bill/Water Bill.
- Any endorsement/enrollment archives supporting the proposed name of the Company. (Appropriate in explicit cases)
No Objection Certificate from the foremost proprietor of the property, to involve the premises for the reasons for Registered Office of the proposed Section 8 Company, in the event that the property isn’t for the sake of the proposed Company.
- Duplicate of the Rent Agreement/Lease Deed assuming the property is taken on lease/rent.
- Head Main Objects of the Company
This is one of the main perspectives for the Incorporation of a Section 8 organization. The object of the Company ought not to be other than objects of advancement of workmanship, trade, science, sports, instruction, research, social government assistance, religion, a noble cause, assurance of climate, or any such item which are connected with good cause.
The proposed object structure portions of Memorandum of Association of the Company. Also, the MOA contains the insights concerning Name of the Company, State of Registered office of the Company, Objects of the Company, Liability of the Member, Share Capital of the Company, and Subscriber’s sheet. The MOA is drafted based on data given by the candidate.
The Articles of Association of the Company are the bye-laws of the Company, which gives decides and guidelines that oversee the Company’s interior issues.
- Measure of Initial Authorized and Paid Up Share Capital
The Share capital of the Company is partitioned into two sections, Authorized Share Capital and Paid-up Share Capital.
Approved Share Capital: Authorized Share Capital is the general roof share capital, which is endorsed by the investors of the Company, up to which the Board of Directors can raise assets from the Shareholders/Investors of the Company by giving offers. The Initial Authorized Share Capital not entirely settled by choosing the and the Initial Number of Ceiling Shares, and The Face Value of each Share (Re. 1 to Rs. 1000 or all things considered),
Approved Share Capital = Initial Number of Ceiling Shares * Face Value of Each Share
Settled Up Share Capital: Paid Up Share Capital is the Capital that is raised by the Company from the investors by giving offers. This is a subset of the Authorized Share Capital, not set in stone by how much starting cash is to be settled up in the Company’s financial balance, to start the business activities.
Settled Up Share Capital = Initial Number of Paid-Up Shares * Face Value of Each Share
Interaction of Incorporation of a Section 8 Company
- Accommodation of the Application for Incorporation –
An Applicant is expected to make an application to the Registrar of Companies for Incorporation of the Companies alongside the necessary subtleties and reports.
The Application should be possible in 2 ways:-
- Candidate necessities to initially apply for accessibility of Name, when the name is endorsed then he/she wants to record further application with Registrar of the Companies for joining of the Company alongside every one of the archives.
- Candidate to straightforwardly record the structure for Incorporation of the Company alongside the proposed name and every one of the necessary reports.
The distinction in the two cycles is that the Applicant gets the affirmation for the name in the first strategy and afterward continues for Incorporation, while the Applicant records the total archives and application in the subsequent technique, without getting the affirmation for the name, which might be protested a short time later by the ROC.
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In this manner, an Applicant ought to pick the principal technique in the event that, he is searching for a particular name, while he might continue for the second in the event that he is available to acknowledge the name as proposed by the ROC.
