Simplified process of Incorporation of Section 8 companies

images
images
section 8 company registration in india 2 6381 1

Section 8 Companies are the limited companies established under the Companies Act and granted an exclusive license by Government under Section 8 association. It is a non-profit organization acquiring numerous tax benefits which are availed under Section 80G of Income Tax Act, 1961. They delight in minimal stamp duty structure and do not require much share capital. Funding for such organizations comes from subscriptions or donations made to them.

The Ministry of Corporate Affairs (MCA) vide its notification dated 7 June 2019 has amended the Companies Incorporation Rules, 2014 to simplify and fast track the incorporation procedure. This shall be effective from 15 August 2019. Any person desirous of incorporating a company under section 8 i.e., Not for Profit Organization, under the Companies Act, 2013 can make an application in e-Form INC-32. No separate application for license is required to be made. Prior to this amendment, the applicant was required to make an application in Form INC 12 to obtain license and thereafter application for Incorporation was required to be made. Post scrutiny of the documents, the Certificate of Incorporation for Section 8 companies will now be issued by Registrar of Companies in Form INC-11 which earlier was issued as a license under Form -16 or Form-17.

Section 8 Companies can be incorporated by either reserving names through Run and filing SPICe thereafter or by directly filing SPICe. License No. for a section 8 company shall henceforth be allotted at the time of incorporation itself.

In view of the above, all pending INC-12 SRNs for new Companies pending at respective RoCs would be marked as ‘Rejected’ on 15th August 2019. Such applicants may thereafter directly file SPICe for obtaining License Number and for incorporation of Section 8 Companies.

Stakeholders who have already obtained License Numbers and are yet to file SPICe form for incorporating Sec 8 companies may do so at their convenience but may please note that the forms shall be processed only after a certain time lag to allow for work flow changes to take effect.

Those stakeholders who have already filed SPICe forms which are pending at CRC may kindly await processing of these forms after the work flow changes take effect.

The income of the Company must be used to promote only charitable objects and cannot pay any dividend to the members 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.

If you are looking forward to establish a business in India, know about latest updates, we can offer a comprehensive range of professional services in registration process, attest services, special advisory services and its statutory compliances as per your business requirements.

Our team can also assist you in setting up your business in India, accounting, bookkeeping, payroll, auditing, taxation, secretarial compliances, trademark registration, business structuring and advisory services. If you require any assistance, kindly click here

images

Ready to assist with any of your queries or concerns

images

Ready to assist with your Queries