How to Do Registration for Section 8 Company?
A company is referred to as a Section 8 Company when registered as a Non-Profit Organization (NPO) i.e. when it has the motive of promoting arts, commerce, education, charity, protection of the environment, sports, science, research, social welfare, religion and intends to use its profits (if any) or other income for promoting these objectives. The income of NPO can not be used for paying out dividends to the company’s members and has to be for the promotion of charitable objectives. Such companies obtain an incorporation certificate from the central government and are liable to adhere to the rules specified by the government.
Eligibility to Apply for a Section 8 Company
An individual or an association of individuals are eligible to be registered as a Section 8 Company if it holds the below-mentioned intentions or objectives. The objectives have to be confirmed to the satisfaction of the Central Government.
When the company intends to promote science, commerce, education, art, sports, research, religion, charity, social welfare, protection of the environment or other objectives.When the company holds an intention to invest all the profits (if any) or any other income generated after incorporation in the promotion of such objects only;
When the company does not intend to pay any dividend to its members.
Incorporation of a Section 8 Company
Companies Act, 2013 deals with the procedure Application for the grant of a License to an existing company under Section 8, an application in Form No. INC.12 has to be submitted along with the below-mentioned linked forms to the Registrar of Companies. INC- 12 Form aims to convert itself into a Section 8 company. Consequent approval, a license under section 8 will be issued by the registrar along with a fresh certificate of incorporation.
Form no. INC – 31– Articles of Association (AOA), in Form No. INC – 13 and the Company’s Memorandum of Association (MOA) (as specified in Act) along with the affixation of subscribers’ photographs and other mandatory and optional attachments.
Most Important Advantages of the Incorporation of a Section 8 Company
Through building the Section-8 company, the intention or goal of the company would be to perform any activity and obtain integrity and commitment because the same is being approved through the Union government.Towards operations because of its strict rules, the same poses a trustworthy image in front of internal and external users of the details concerning the communities.
The reliability of Section 8 companies has much more to do with the communities and the additional kinds of charitable firms. Grants and subsidies via the government and the additional institutions were acknowledged to the section-8 company according to the communities of trust.
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