How to Register a Company under Section 8 of the Companies Act 2013
How to Register a Company under Section 8 of the Companies Act 2013
Section 8 of the Companies Act 2013 in India allows for the registration of companies with non-profit objectives. These companies, also known as Non-Profit Organizations (NPOs), aim to promote various charitable causes such as education, research, religion, and more. This article will guide you through the registration process to establish a Section 8 company and the features associated with it.
Registering a Section 8 Company
To register a company under Section 8, you need to follow a series of steps, which can be completed through the Ministry of Corporate Affairs (MCA) portal. This process ensures that your company adheres to the legal and regulatory requirements for operating as a non-profit organization.
Procedure for Incorporation of a Section 8 Company
Step 1: Obtain DSC and DIN
Before you can proceed with registering your Section 8 company, you need to obtain a Digital Signature Certificate (DSC) for the proposed directors. Once you have the DSC, file Form DIR-3 with the Registrar of Companies (ROC) to get a Director Identification Number (DIN). You will be required to attach proof of identity and address along with the application.
Step 2: Obtain DIN for Directors
Once the ROC approves Form DIR-3, it will allocate a DIN to the proposed directors. This step is crucial as it is required for subsequent filings.
Step 3: File Form INC-12 for Licensing
Next, file Form INC-12 to apply for a license for your Section 8 company. This form requires the submission of an MOA and AOA in alignment with charitable objectives, plus any other required documents.
Step 4: Obtain Section 8 License
After reviewing the application, the ROC will issue a license under Section 8 in the form of INC-16 if the requirements are met.
Step 5: Incorporate the Company with SPICe Form
The final step is to file the SPICe form with the ROC for the incorporation of your company. Ensure that you include all required attachments as stipulated.
Characteristics of a Section 8 Company
Section 8 companies have a unique set of characteristics that differentiate them from other types of companies:
Charitable Objectives
Unlike profit-making enterprises, Section 8 companies are registered with the sole aim of promoting charitable activities such as education, research, religion, and the environment. They are not permitted to distribute dividends or profits among members. Instead, any surplus resources are used to further the company's charitable objectives.
No Prescribed Minimum Capital
These companies do not have a specified minimum paid-up capital, making it easier for them to operate without financial constraints. This flexibility is particularly beneficial for start-ups focused on social service.
Limited Liability
Members of Section 8 companies have limited liability, which means they are not personally responsible for the company's debts. This feature encourages more individuals to invest in non-profit ventures.
Government License
To operate legally, a Section 8 company must maintain a valid license from the relevant government authority. This periodic renewal is a condition for the company to continue its operations.
Exemptions and Privileges
Given their non-profit status, Section 8 companies enjoy certain exemptions and privileges, such as tax benefits and reduced registration fees. These privileges help to reduce operational costs and enhance the overall effectiveness of the company in achieving its charitable goals.
For more information on how to register a Section 8 company, you can refer to