What is Section 8 Company?
An NGO or Non-Profit Organisation is an entity that operates for promotion of art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
In India, an NGO can be registered as any of the three structures being Company under Section 8 of the Companies Act, 2013(section 25, companies act 1956), Trust or Society.
Section 8 Company format of an NGO is the most popular form of NGO in India. It is easy to register, run or manage a Section 8 Company in comparison to a Trust and a Society.
What are the key features of a section 8 company?
The key characteristics of an NGO section 8 company are:
1. Object: *It operates for the common welfare of masses at large, for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
2. Profit Earning: *The objective is not to earn a profit. If any profit is earned during the course of its operation, the same is not to be shared among owners/members rather utilised for attaining the objects for which NGO was formed.
3. The utilisation of funds and earnings: *The profits, if any, or other income is used towards promoting specific objects of NGO. Further, there is restriction on the declaration of profits as a dividend to members.
What are the minimum requirements to start a section 8 company?
1. Minimum two shareholders;
2. Minimum of two Directors (Directors and shareholders can be the same person);
3. At least one Director shall be resident in India;
4. No Minimum capital required;
5. Income-tax PAN is a mandatory requirement in case of Indian nationals;
6. Anyone of the Identity Proof (Voter ID/Aadhar Card/Driving License/Passport); Passport is a mandatory requirement for proof of identity in case of foreign nationals;
7. Anyone Proof of Residence (Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement);
8. Registered Office address proof (rent agreement along with latest rent receipt and copy of latest utility bill in the name of the landlord and a no-objection certificate from the owner of the premises, in case the premises are rented);
9. In case the premises are owned by a Director and Promoters, any documents establishing the ownership such as Sale Deed/House Tax receipt etc along with the no-objection certificate.
Is Digital Signature mandatory for carrying out registration formalities?
Digital Signature is the only secure and authentic way that a document can be submitted electronically. All filings of e-forms on MCA Portal are required to be filed with the use of Digital Signatures by the person authorised to sign the documents.
Under the plan you can obtain 2 class II digital signatures along with E-token, having a validity of 2 years.
In case, you already have a DSC, our experts will offer you some concession accordingly on the above package
I wish to start my NGO. The objective is to impart quality education and upliftment of unprivileged children.
Should I form a trust, society or register as a section 8 company?
In India, NGOs can be registered as Section 8 Company, trust or society. While Trusts and Societies are registered under State Government regulations, section 8 companies are registered under Ministry of Corporate Affairs.
Forming a section 8 company is prefered due to following reasons: Improved recognition Better legal standing. Higher credibility amongst donors, Government departments and other stakeholders. Relaxation from a number of companies act regulations
Is it necessary to have 2 directors for Section 8 Company Registration?
Yes, you need a minimum of two directors for a section 8 company registration.
Who can become a member of Section 8 Company?
Any individual/organization can become a member of Section 8 Company including foreigners/NRI’s.
For incorporation of Section 8 Company, do I have to be present in person?
The entire procedure is 100% online and you don’t have to be present at our office or any other office for incorporation. A scanned copy of documents has to upload on document vault and our experts will carry out all registration formalities for you.
How much time will the section 8 company registration take?
The incorporation process gets completed on obtaining the license and issue of incorporation certificate under section 8 of Companies Act 2013, (earlier section 25 of Companies act 1956). The whole process of company incorporation can be closed for less than 15 days. The time took also depends on relevant documents provided by the applicant and speed of approvals from the government. To ensure speedy registration, please pick a unique name for the proposed Company and make sure you have all the required documents prior to starting the registration process.