Section 8 company is a concept that combines the benefit of a NGO and a Corporate. It provides an option to the promoters to spread the idea of Social cause on a much larger scale. Giving NGO a corporate form has various benefits over the time which can be encashed by incorporating a Section 8 Company.
We have incorporated several Section 8 companies in Jharkhand which are working in various fields for the welfare of public at large. Our incorporation service includes Name Selection, Memorandum Drafting and Company Registration. We provide our clients best in class services so that they are not troubled with any non compliance during the initial stages of there growth. In Jharkhand we take a maximum of 10 days time to incorporate a Section 8 Company.
WHAT IS SECTION 8 LICENSE?
Generally name of a company ends with word Limited or Private Limited, but Companies Act, 2013 provides for a license under Section 8 to the companies involved in the social welfare and promotion of Arts, Science, Commerce, Education, Literature etc to have there name not end with the word Limited or Private Limited. These organizations are called as Non-Profit Organizations and there name may end with words like Association, foundation etc.
What is a Non-Profit Organization (NPO)?
An organization which instead of distributing its surplus/profit among its members, applies the same in the fulfilment of its objects. That is they are not allowed to distribute any money in the form of dividend or profit sharing. Company registered under Section 8 is a Non Profit Organization
Is Section 8 company Public company or Private Company?
Section 8 Company can be incorporated both as a public as well as private company.
- A minimum of 2 members are required if the company is incorporated under the definition of private company and a minimum of 7 members shall be required if the company is incorporated under the definition of public company.
- An OPC (One Person Company) cannot apply for License under Section 8
A company incorporated under Section 8 can accept donations from public subject to applicability of other rules and regulations and authorisation form the Memorandum of Association.
If the Section 8 Company is incorporated under the definition of Public Company it can also add members and accept membership fee from such members.
Can a Section 8 Company apply for 12A and 80G Registration?
A Section 8 company like other NGO can apply for 12A and 80G registration with Income Tax Department.
CONVERSION FROM OR INTO SECTION 8 COMPANY:
Any company under the definition of Public or Private company can apply for license under Section 8, and the Ministry of Corporate Affairs can after due verification of documents and keeping in view all the formalities, issue license under section 8 of the Act.
Likewise a company registered under Section 8 can convert itself into Public or private Company.