Perfect Choice for setting up NGOs and Non Profit Organisations.
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SECTION 8 COMPANY
A Section 8 Company is a Non-Profit Organization (NPO) which is established with the intention to promote art, science, commerce, religion, charity,education, protection of environment, social welfare, sports, research or any other advantageous object. The profits derived from such promotion cannot be used by the members but can only be utilized to support and promote the objectives of the company.
The central government provides an incorporation certificate to all such companies and also informs them about some restrictions and conditions.In case they don’t fulfill them, the central government may also order them to wind up the company.In case fraud objectives of the Company are proved, legal action will be taken against all officers of the Company.
|PRIVILAGES AND EXEMPTIONS FROM GOVERNMENT||Many privileges and exemptions are available to section 8 company under Company Law.|
|NO MINIMUM CAPITAL||Section 8 Companies are exempted from the requirement of Minimum Paid-up capital|
|NO STAMP DUTY||Section 8 Companies are not required to pay any Stamp duty for registration|
|DEDUCTION UNDER SECTION 80G TO DONORS||Donors of the Company are entitled to tax deduction u/s. 80G of the Income Tax Act.|
|EASE OF FORMATION||TA Section 8 company can be formed by two persons only, by complying with the prescribed formalities of the Companies Act. Many privileges and exemptions under Company Law. Registered partnership firm can be a member in its own capacity.|
|LIMITED LIABILITY||The greatest benefit of Section 8 Company is limited liability. If any liability arises then its member is not personally affected; members are only liable for unpaid shares held by them and not more than that. Being the biggest advantage with this type of company, it means that the owners are not personally responsible for business debts and obligations of the incorporation.|
|SEPARATE LEGAL ENTITY||This is the most prominent quality of a Section 8 Company. It refers to the statement that company and its members are completely distinctive. The biggest advantage of a section 8 company is that its identity is distinct from that of its members. A company is a separate person having its own rights & Obligations.|
|GREATER FLEXIBILITY||A Section 8 company is required to perform lesser legal formalities as compared to a public company. It enjoys special exemptions and privileges under the company law.|
|PERPETUAL SUCCESSION||Death, insolvency and insanity etc of any of the member does not affect the continuity of the company. Thus the life of the company does not depend upon the life of its members.In case of death of the owner or transfer of shares, your business won’t get affected.|
|TAX BENEFITS||A Section 8 company is not required to publish its accounts or file several documents. Therefore, it is in a better position than a public company to maintain business secrets.|
The first and foremost step to incorporate the Company is to Apply for DSC and DIN of the director. DSC and DIN is required for filling the forms of company registration electronically to Ministry of Corporate Affairs. DSC is obtained from Certifying Agencies. DIN is the Unique Number allotted to the Directors of the company which remains valid for whole life of the director and is required to become director of any company.
ID proof for members
Passport size Photographs
Copy of Rent agreement(If rented property)
Electricity/ Water bill (Business Place)
Copy of Property papers (If owned property)
NOC of Landowner
Director’s Directorship details (in other Companies/LLPs, if any)
|Private Limited Company||Limited Liability Partnership||One Person Company||Partnership Firm|
|Preferred for||Start-ups||Professional Services Firms||Sole Proprietors||Small-medium sized businesses|
|Limited Liabilty Protection||Yes||Yes||Yes||No|
|Minimum Requirement||2 Shareholders||2 Designated Partners||1 Director
|Fund Raising Options||High||Low||Low||Low|
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