About Section 8 company

Section 8 Company:

Not all companies have goals of making profits by carrying out trade and commerce. Many companies primarily have charitable and non-profit objectives. Such entities are referred to as a Section 8 Company because they get recognition under Section 8 of Companies Act, 2013. These companies dedicate all their incomes and profits to the advancement of their objectives.

Definition:

The Companies Act defines a Section 8 company as one whose objectives are to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives. Aims to apply its profits, if any, or other income in promoting its objects; and do not pay any dividend to their members.

NGOs can be registered in India under any of the following laws:
a. Trust under Indian Trusts Act, 1882
b. Society under Societies Registration Act 1860
c. Section 8 Company under Companies Act, 2013

Advantages/Privileges

People generally prefer to conduct charitable activities by forming Section 8 companies instead of regular NGOs and associations. This is because they have limited liability, so their personal assets will not be used in paying debts of the company. Here are some advantages that these companies enjoy:

  • Members have limited liability.
  • No minimum capital requirements.
  • They get several tax exemptions.
  • Stamp duties and high fees are not payable for registration.
  • They have perpetual existence and separate legal status.
  • Exemptions from carrying out several procedural compliances.
  • More credibility than compared to NGOs, societies, and trusts because they are recognized by the Central Government’s license.

Section 8 Company Registration Process

Usually, Nidhi Company Registration Process takes 30 to 45 days, Registration of a Nidhi Company consists of the following steps:

Minimum 7 Members and 3 Directors will be required to start the Incorporation of Nidhi Limited.

  • Obtain a Digital Signature Certificate (DSC)
  • Drafting of Spice+
  • Application for DIN
  • PAN Application
  • TAN Application
  • Opening of Bank Account for the Company
  • Issue of Certificate of Incorporation
  • Issue of Section 8 NGO license
  • Includes Govt Fees & Stamp duty for Authorized Capital upto Rs. 10 Lakh
  • Excludes foreign national or Foreign Body Corporate as a director OR business that need approval from RBI, SEBI or IRDA for incorporation

Documents Required

Only Scanned Copies are needed,

ID Proof:
Scanned copy of PAN Card of all directors and Aadhar card/ Voter ID/ Passport/ Driving License

Address Proof :
Latest Bank statement/ Utility bill in the name of the director which should not be older than two months

Photo:
Latest passport size photograph

Registered Office Proof: 
No Objection Certificate (NOC) from the owner, Utility bill (should not be older than two months) and Rental agreement (in case of rented property)/ Registry Proof or House Tax Receipt (in case of owned property)

Our Packages at a Glance

Choose your package

Basic

24000 /-

(* All Inclusive)
  • DSC For Directors
  • MOA & AOA
  • DIN, PAN & TAN
  • EPFO & ESIC
  • Section 8 company license
  • Incorporation Certificate

Register With Us

CA/CS Assisted Service

What do you get?

DSC:
Digital signature Certificate to digitally sign

Memorandum of Association: 
Explains the rules and objective of the business

Articles of Association:
Explains the rules and objective of the business

Incorporation Certificate:
Certificate of incorporation to Registerered Email id

Pan Card:
You will receive the Epan card In registered Email ID

TAN: 
Tax Deduction and Collection Account Number.

License: 
Section 8 company license number

FAQs On Nidhi Company

1. Who can apply for registration of a Section 8 Company?

Any person or an association of persons intending to register a limited liability company for objects specified below can opt to apply for registration of Section 8 Company.
The following have to be proved to the satisfaction of the Central Government that:
(a) its objects include the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
(b) the company after incorporation intends to apply its profits, if any, or other income in promoting such objects only; and
(c) the company intends to prohibit the payment of any dividend to its members.

2. Who is authorized to issue a license to Section 8 Companies?

Registrars of Companies of respective jurisdictions are delegated with the powers of the Central government to issue a license to Section 8 Companies. [vide MCA notification dated 21st May 2014 – Annexure D].

3. Whether an Articles of Association of a Section 8 Company can have an entrenchment clause?

Yes, an Articles of Association of a Section 8 Company can have an entrenchment clause in terms of provisions of section 5(3).

4. Can a One Person Company (OPC) be incorporated as or convert into a Section 8 Company?

No. Rule 3 of the Companies (Incorporation) Rules, 2014 prohibits a one-person company to be incorporated as section 8 company or to convert into a Section 8 Company.

5. Can a partnership firm or a Limited Liability Partnership become a member of Section 8 Company?

Yes, under the Companies Act, 2013, a Partnership firm or an LLP can become a member of Section 8 Company. The provisions of respective Acts need to be complied with by the partnership firm or LLP as the case may be

6. Can section 8 companies be a holding company of another company?

Yes, section 8 company can promote another company and be a holding company of another company.

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