Section 8 Company Registration in Chennai

The Companies Act defines a Section 8 company as one whose objectives is to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives.

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Section 8 Company Registration in Chennai – An Overview

A Section 8 Company is a non-profit enterprise associated with a commercial venture, also established for the furtherance of goals similar to a trust or society. The taxation of a Section 8 company is on par with other organizations. The profits get taxed at @30%. If a Section 8 company gets registered under Section 12AA (tax exemption) of the Income Tax Act, then its earnings shall be entirely exempted, and no tax will be levied on the company.

The cost factors involved in trusts are critically low as compared to a company under section 8 of the Companies Act. The level of transparency in working is very low in trusts compared to a Section 8 Company. The grant of subsidies to a trust is significantly less than that to a company under section 8.

Advantages of Section 8 Company Registration

Tax Exemption

Numerous Tax exemptions are provided to Section 8 Companies, specifically to donors who contribute to these companies. They can claim tax exemption against the donation they made to a Section 8 company.

No Minimal Capital required

There is no prescribed limit on the minimum capital requirement for Section 8 companies, unlike other entities such as public limited companies.

No Stamp Duty

A company enjoys perpetual existence, unlike other forms of business; it continues to exist regardless of the owner’s status.

Separate Legal entity

A Section 8 company is a legal entity and a juristic person established under the Act. TA Section 8 Company also has a perpetual existence.

Credible

A Section 8 Company has more credibility compared to any other Non-profit organization structure, whether it is a Trust or a society, as the central government licenses it. It has more stringent regulations, such as no changes to the Memorandum of Association (MOA) and Articles of Association (AOA) can be made at any stage or in any situation in a Section 8 Company.

Separate Legal entity

A company enjoys a separate legal identity, unlike partnership firms.

Documents required for Section 8 Company Registration in Chennai

  • Identity Proof of all the directors – a copy of the PAN card (Mandatory);
  • Address Proof –copy of Aadhar/ Driving License/ Passport/ Telephone Bill/ Electricity Bill.
  • Passport size photograph of all the directors.
  • Rent Agreement in case the registered office of the company is on rent;
  • Utility Bill of registered office;
  • Form DIR-2 which is consent to act as director
  • Director’s interest in other entities

How to Register a Section 8 Company in Chennai

The following are the steps involved in the process for registration of a Section 8 company:

Step 1: Apply For DSC
The very first step is to apply for the Digital Signature Certificate. DSC is used for affixing the signature in the forms.

Step 2: Name Reservation Through SPICE+-
The procedure for name reservation of a Section 8 Company is similar to that of other companies. For the same, click on the ‘SPICe+’ Form placed under ‘MCA Services’. SPICE+ form is used for name reservation of the company that includes all the steps, right from the Name Reservation to Post incorporation

STEP 3: Submission Of SPICE+ Part A Form
The applicant needs to submit the SPICE+ Part A form for Name reservation and incorporation purposes. (DIN Application is also included in the SPICE+ form).

Step 4: Filing SPICE+ Part B For Incorporation Purpose
After submitting the SPICE+ Part A, the next step is to download SPICE+ Part B in PDF format for filling in the related forms:-
1. SPICe+AoA,
2. SPICe+MoA,
3. AGILE-PRO,
4. INC-9 and URC-1) and for affixing the “DSC,”.

Step 5: Filing The Details In AGILE PRO
The next step is to complete all the details in the Agile PRO form. Similar to Part A, the details that are common in Part B shall be auto-filled in AGILE Pro. AGILE PRO includes-
1. GST-Optional
2. EPFO/ESIC- It is mandatory to apply for ESIC and EPFO.
3. Bank Account- Opening a bank account through this form.

Step 6: Fill in the Requisite Details In INC-9
It is done to get the Declaration by the subscriber or the First Director.

Step 7: Filing Of Forms With MCA
An applicant shall file the respective forms with MCA after filling in all the requisite details in SPICE+ and AGILE PRO. After successful submission, the documents can be submitted, and the DSC can be affixed in the respective form.

Step 8: Pre-Scrutiny Check And Payment Of Requisite Fees
The next step is to conduct a pre-scrutiny check. After a successful Pre-scrutiny check, the applicant must click on the confirmation button. Also, the applicant company is required to pay a requisite fee for “Section 8 Company” registration.

Step 9: COI From The Registrar
If the Registrar finds the information and documents to be appropriate, he will issue a Certificate of Incorporation to the applicant company.

What is the process for Section 8 Company Registration?

Applying DIN&DSC

DSC and DIN for all directors are required.

Name Approval

4-6 proposed names should be provided that are unique and suggestive of the company’s business.

MOA, AOA&AFFIDAVIT

Memorandum and Articles of Association should be drafted. An affidavit and declaration by the first subscribers and Directors should be prepared.

Company Registered

Once the application is duly filed and accepted by the ROC, a certificate of incorporation is issued, and the company is ready to commence its operations.

Apply for PAN, TAN and Bank accounts.

Then you need to apply for PAN and TAN. PAN and TAN are received within 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA, and PAN to a bank to open your bank account.

FAQ's

What are the requirements to be a director?

Any person above 18 years can become a director. Non-residents can also become director of Indian companies.

ID proof and residence proof of all the proposed directors, PAN card is mandatory for Indian nationals. No objection certificate from the owner of registered office or lease agreement must be produced.

Digital signature is process to authenticate and validate records electronically. DSC is required for every director of the company as the Ministry of Corporate Affairs (MCA) mandates digital signature of directors on some documents.

Authorized capital of a Company is the amount of shares a company can issue to its shareholders. Companies have to pay authorized capital fee to the government so as to be able to issue shares. Companies have to pay authorized capital fee for a minimum of Rs.1 lakh.

Yes, a foreign national can become director of a private limited company. Atleast one director in a company should be resident Indian.

Yes, NRIs / Foreign Nationals / Foreign Companies can hold shares of a Private Limited Company subject to Foreign Direct Investment (FDI) Guidelines.

Yes, a partnership firm can be converted into private limited company by following the procedure laid down in Companies Act 2013.

A private limited company must have a minimum of 2 directors while the maximum no. of directors can be upto 15.

DIN is a unique identification number which is allotted to all the directors existing or proposed. DIN can be obtained by filing e-form DIN1 in MCA portal.

Every private limited company must hold a board meeting atleast once in every three months and an Annual general meeting (AGM) every year.

Yes, Companies Act 2013 provides rules for converting a private limited company into a public limited company.

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