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SEC-8 Registration
SEC -8 Registration
What is Section 8 company all about?
A company is referred a to as Section 8 Company when registered as a Non-Profit Organization (NPO) i.e. when it has motive of promoting arts, commerce, education, charity, protection of 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 cannot 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.
According to the rules, failure to comply with the responsibilities stated by the Central Government may lead to the winding up of the company on the orders of the Government. Besides, strict legal action will be taken against all the members of the company if the objectives laid down by the company proves to be bogus.
Eligibility to Apply for Section 8 Company
An individual or an association of individuals are eligible to be registered as Section 8 Company if it holds 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 alike 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
Most Important Advantages for the Incorporation of Section 8 Company
- Through building the section-8 company the intention or goal of the company would perform any activity and obtain integrity and commitment because the same is being approved made through the Union Government.
- Towards the operations because of its strict rules the same poses trustful image in front of an internal and external user of the details with respect to the communities.
- The reliability of section 8 company has much more with respect to 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.
Documents Requirement for the Registration of Section 8 Company
- Digital Signature Certificate
- Memorandum of Association
- Articles of Association
- Passport Size Photographs
- Members’ Id Proof such as Aadhaar Card, Passport, Voter Id
- Details of Director (When the Members Are Other Companies/LLPs)
- Address Evidence
- Director Identification Number
The benefits which can be seen from the registration under Section 8 is that it starts with the least capital; requirement, it has maximum tax benefits, no need to pay stamp duty, the company has a separate legal identity like any other corporate, and the most significant advantages which the members/ donators derive is the exemption on their donation under Section 80G of Income Tax Act 1961. The credibility of Section 8 Company is way more than any other trust, charitable organization, or society. We “E-TAX HUB INDIA” is there for you to register your company within your quality time.
