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All you need to know about Section 8 Company

Section 8 Company registered under the Companies Act, 2013, is a non-profit organization in India which has its objectives of promotion of commerce, art, sports, social welfare, religion, protection of environment or any such objectives, provided the revenues gained is applied for promoting only the objects of the company and no part of the profit is given to its members. Thus, Section 8 Company is an organization under the Companies Act, 2013, for charitable or non-profiting purposes only.
A non-profiting organization in India can be registered as a society, under the Registrar of Societies or as a Section 8 Company. Section 8 Company is registered under the Central Governments Ministry of Corporate Affairs and the central government provides an incorporation certificate to all such companies. If Section 8 Company does not abide by the rules and regulations of the central government the Company can be winded up. Section 8 Company has a great credibility amongst donors and other stakeholders and even better legal standing.
The Section 8 Company registration can be done through LegalRaasta.com anytime anywhere in a few series of steps.
Section 8 Registration through LegalRaasta
To register a company under Section 8 Company you need to just follow these steps:
• Fill a simple form available on the official site of LegalRaasta.
• Obtain Digital signatures (DSC) and Director Identification Number (DIN) within 3 working days.
• Apply for license and and obtain Certificate of Incorporation (COI) and then apply for Tax Deduction Account Number (TAN) and Permanent Account Number (PAN)
• Registration is complete under Section 8 Company. Your TAN and Pan will be sent through courier.
Documents Required:
• ID proofs for members of the Company
• Address proof of the members
• Passport size photos
• Copy of rent agreement (if rented only)
• Copy of property papers (if any)
• Copy of water or electricity bills
• Landlord NOC
Eligibility Criteria:
• The objective should be to promote science, education, sports etc
• All the revenue gained should be used for companies development only
• No distribution of profits amongst members of the company
LegalRasta can incorporate a company under Section 8 Company in less than 20 days if the relevant documents are provided and approved by government in time.
Advantages of Section 8 Company
Section 8 Company is a non-profiting Company which works for the promotion of science, culture, sports and other such objectives. Under this company enjoy many benefits including:
• Tax Benefits-These companies are non-profiting and thus they are exempted from certain income tax provisions. These companies are given deductions too and even the companies who invest in these non-profiting companies enjoy the deduction benefits under Income Tax Act, 1961.
• Share Capital-Section 8 Companies do not require any minimum capital investment for incorporation i.e. they can commence without any capital.
• No Title Needed-Section 8 Company is exempted from using the suffix or title.
• Transfer of Ownership-As per the guidelines of the Company Act a private limited cannot transfer their shares but in Section 8 Company members can easily transfer the ownership of the company.
• No stamp duty registration is required.
Disadvantages
The section 8 company can have a few disadvantages:
• Section 8 Company compliance is high as compared to any other NGO
• Penalty provisions are a little strict and harsh under this act.
• It might take more time than usual as it is requires the Central Government approval.
Conclusion
Being a section 8 company is a must which makes a huge difference. The working of the company is not as same as the regular companies. They only work for the benefit of the public and works on important areas like culture, science, sports, education etc. There is no profit dividend for the members as it solely a non-profiting company. These companies are more reliable due to their easy working and effective objectives.
LegalRaasta helps you in registering yourself under Section 8 Company Registration.
This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for Section 8 Company Registration, Nidhi Company Registration, IEC Registration, Fssai License, File ITR Online, Copyright Registration, Patent Registration, Trademark Registration.

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