by CS Arpit Garg
In India NGO activity can be conducted through Trust, Society and Section 8. Section 8 is the most preferable mode of operating the NGO activities in India. The primary purpose of registering a company as a Section 8 Company is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports research, etc. Section 8 Company is governed by Companies Act, 2013. Registering Section 8 Company is a online process and a minimum of two directors are required. Also, there is no requirement of minimum paid-up capital. Section 8 Company can be registered as limited by shares or limited by guarantee. MCA issues a License for company registered as Section 8 which states that company will do social activities as stated in the MOA of the company.
Why Section 8 over Trust and Society?
Non-Profit Organization (NPO) are the entities working for betterment of society and who earns no profit from the business activity. They invest the income in the same social welfare activity. Know more about Trust, Society and Section 8.
Pre-Requirements for Section 8 Company Incorporation?
- Intention of the company is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports research, etc.
- The profits of this company, if there are any, are applied towards promoting the objectives of the company.
- The income of NPO can not be used for paying out dividends to the company’s members.
Documents required for Incorporation of Section 8 Company
Documents required for members
- PAN Card
- Aadhar Card
- Voter ID Card/ Driving License / Passport
- Passport Size Photo
- Updated Bank Statement/ Utility Bill
Documents required for business place
- Utility Bill
- Ownership Proof/ Rent Agreement/ NOC
Process of Incorporation
- Apply for the Name Approval of Section 8 Company to MCA
- Prepare Documents w.r.t :-
- INC-14 – A Declaration by Practicing CS/ CA / CWA that the draft MOA & AOA are compliant with the provisions & norms of section 8 and the requirements as per Section 8 have been duly taken care of.
- INC-15
- Memorandum of Association
- Articles of Association
- Income & Expenditure
- Receipts & Payments
- DIR-2 & DIR-8
- List of Shareholders
- Procure Digital Signature Certificate
- Prepare e-forms on MCA Website.
- Upload e-forms
- After verification MCA will issue License and Certificate of Incorporation
Conclusion
For Social welfare, education, environment people are more concerned and aware about the fact that Social Welfare begins from oneself and if people try to do something better to the society, then our Society will be benefitted. Registration process is the only one stage of the benefitting. Section 8 gives utmost belief to the people that, promoters of the company are not indulge in any frauds and people.
For any queries or requirements contact
CS Arpit Garg
Practicing Company Secretary & Founder Compliance Arena
8447773833