There are many legal ways in our country to start a non-profit organization. One of the most popular legal formats is Section 8 Company under the Companies act, 2013, and this is the most suitable way to spread charitable causes such as education and healthcare, art, and social welfare. These organizations are only dedicated to the betterment of society and not for profit. This blog gives you information on the Section 8 company registration online with certain reference to the microfinance company.
WHAT IS A SECTION 8 COMPANY?
A Section 8 Company is defined under the Companies Act, 2013. Its primary objective is to promote activities that benefit society, including charitable work, environmental conservation, education, research, microfinance, and other social welfare activities.
All the earnings generated by the section 8 companies go towards supporting the objectives of the social causes. Moreover, these organizations enjoy certain legal and tax advantages
BENEFITS OF SECTION 8 COMPANY: Some of the benefits of Section 8 company registration online are given below –
Tax Exemption: As Section 8 companies are formed not for profit-making, they have certain benefits under Section 12 A and 80G of the income tax act, which provides the facility to the concerned organization and encourages donors to donate for social causes.
No Minimum Capital: Unlike the public limited companies, Section 8 companies are not subject to the minimum share capital requirement because these are founded with the objective of doing philanthropic activity.
Zero Stamp Duty: The government does not charge stamp duty on the incorporation of Section 8 companies, making the process less expensive to undertake, and you can easily do Section 8 company registration online.
Limited Liability: Members of a Section 8 company have limited liability; thus, in the event that the firm has debts or inconsistencies, their personal assets are not at risk.
Distinct Legal Entity: Section 8 companies have the status of a separate legal entity, protecting members from personal liability and enabling them to hold assets, enter into contracts, and sue or be sued on behalf of the organisation.
DOCUMENTS REQUIRED FOR SECTION 8 COMPANY REGISTRATION ONLINE: Here, is the list of important documents required –
Identity Proof: PAN card of all the directors
Digital Signature Certificates: Digital signature certificates of all directors of the proposed company.
Memorandum of Association (MoA): It is a legal document that describes the objectives of the company.
Articles of Association (AoA): It explains the internal rules and regulations of the company.
Address Proof: Passport, Aadhar Card, or any utility bill.
Office Address Proof: Rent agreement and NOC from owner of the property (if the office is rented) or Utility bill not older than two months.
Passport-Sized Photographs: Passport size photo of all the directors.
Details of Directors: All the educational and professional details of the directors are required for section 8 company registration online.
STEP-WISE PROCESS FOR REGISTRATION OF SECTION 8 COMPANY: Here is the step-by-step details of registration process –
Name of The Company: The name of your company must include the words, like association, foundation etc., which relate to the objects of the organization.
Apply for Digital Signature Certificates (DSC): All proposed directors have to acquire DSCs.
Director Identification Number (DIN): Get DINs for each director by filing Form DIR-3.
Memorandum of Association (MoA) and Articles of Association (AoA): Prepare these essential legal papers.
Declaration by directors: INC-15 is a form that confirms the consent of directors to be bound by Section 8 provisions.
Proof of registered office: Provide the latest utility bills, a rental agreement document, or a title deed if you are living in a rental or own the house for Section 8 company registration online.
File INC-12: In this regard, submit an application to the Registrar of companies to get a license under section 8 of the companies act, 2013.
Incorporation Filing: Once the license is granted, incorporate the company through SPICe+ (Simplified Proforma for Incorporating Company Electronically).
Incorporation Certificate: After thorough verification, the Registrar of Companies issues the certificate of incorporation.
The Indian government set up microfinance institutions to make borrowing easier, you can easily form a microfinance company under section 8 microfinance company registration in India. Small and medium-sized businesses, who find it difficult to get credit from banks and other major financial institutions can, benefit from the lending services offered by microfinance institutions.
WHAT IS MICROFINANCE COMPANY?
A microfinance Company is an institution that offers financial services in the form of micro credit to the individuals and businesses, who do not have the access to banks. They targets disadvantaged, rural and micro-borrower clients to meet their financial needs.
WHY DO YOU PREFER SECTION 8 MICROFINANCE COMPANY REGISTRATION?
Microfinance companies specifically target to providing financial services for the marginalized and poor sections of society. Section 8 microfinance company registration in India provides you with the following advantages:
Credibility: Section 8 companies have a good image, as a result of which people have confidence in them in terms of funding and tie-ups with banks, corporates, and international organizations.
Funding Opportunities: Non-profits find it simpler to secure grants, donations, and government support than other organizations.
Tax Exemptions: Section 8 microfinance company registration gives you many benefits, like tax exemptions for your donors, thus widening fundraising prospects for the company.
Social Impact: Section 8 micro finance companies are non-profit organisation whose aim is to provide financial and social support to channels that are struggling financially to gain financial stability rather than to make profits.
CONCLUSION: A Section 8 microfinance company registration in India is a very effective tool for making an impact in social change, especially in the area of micro financing. They could increase financial inclusion and communal uplift through tax advantages, credibility, and operating liberty.
If you are planning to start a Section 8 company, especially in microfinance, start your journey with section 8 company registration online with Lawgical India, we can guide you to start a Section 8 Company to contribute maximum to the society.