How to Apply for Section 8 Company Registration

To understand the application and registration of a section 8 company registration, it's first essential to understand what exactly section 8 company registration means and, more importantly, whether you should get your company registered as a section 8 company.

Section 8 company 

A Section 8 company is a nonprofit under the Companies Act of 2013. It is a company that the Ministry of Corporate Affairs governs. The objectives and motives for setting up this type of company are for charity, education, and public service. An important point is that a Section 8 company differs from a trust or an NGO.

It is often claimed that section 8 company registration is better than registering yourself as an NGO or a trust. But how? Read on to find some Section 8 company registration benefits.

Benefits of Section 8 company registration

• No minimum Capital

No minimum capital is required for setting up your startup under the Section 8 company. Capital can be brought in at any time during the company’s future, which means you can bring in capital through donations and subscriptions from the members. 

• Separate legal identity of the company

Another significant benefit of Section 8 companies is that you get a distinct legal identity from the members. This also ensures that the entry and exit of members of the Section 8 company would not affect the company's operation. 

• Limited liability

A Section 8 company also has limited liability as long as its shares are concerned. The company or the startup registered under Section 8 would not be liable for any losses they incur. 

• Credibility

Section 8 companies are considered more credible and reliable than other charitable organizations and trusts. People and government organisations trust Section 8 companies more. Moreover, section 8 companies need to submit the annual audits.

• Exemption for the donors

A tax exemption is granted to the donors in the Section 8 company registration. Hence, if you are a donor in a Section 8 company, you can also enjoy exemption benefits.

To avail such benefits of section 8 company, you can rely on the team of professionals of Lawgical India!

Application process for Section 8 company registration

• Obtain a digital signature certificate for the directors

The first step for the application process is to obtain a digital signature certificate for all the directors of the Section 8 company. This step needs to be taken care of very precisely, as without it, the directors would not be able to sign any documents.

• Make sure that the Director identification number is assigned

The next step is for the startup owners to ensure the unique director identification number is also assigned. 

• File form INC 12 along with other documents

As and when attaining the documents mentioned above is clear, the startup owners need to file form INC-12 along with some other documents like INC 13, draft articles, estimated income and expenditure of the section 8 company, and the proposed list of directors.

• A licence will be provided

When the forms were approved, the company would be granted a licence to operate as a section 8 company. 

• SPICe+ form

This form concerns the incorporation of the company. During the submission and filing of this form, the applicant must also choose a name for their company.

• Providing your startup with a company identification number

Lastly, you would be informed about the company identification number along with your registration confirmation.