Section 8 Company Registration in Delhi

A Section 8 Company is a non-profit organization that aims to promote charitable activities, art, science, education, and sports. The profits of such companies are utilized for promoting these objectives and are not distributed among the Company's members. It is essential to understand what is Section 8 company, document requirements, and company incorporation process. Start your Section 8 Company registration in Delhi today!

At Global Taxman, we provide end-to-end services for registering Section 8 companies in Delhi, India. Our team of experts offers hassle-free and professional services to help you establish a Section 8 company quickly and efficiently. Contact us today to avail of our professional services for registering your Section 8 Company in Delhi.

What is Section 8 Company? - Companies Act, 2013

According to the Companies Act 2013, a Section 8 company is defined as an organization whose objectives are to promote arts, commerce, science, research, education, sports, charity, social welfare, religion, environmental protection, or other similar activities goals. These entities utilize their profits to achieve their mission and do not distribute dividends to their shareholders. Start your Section 8 Company in Delhi to make a difference in the community.

Overview of Section 8 Company Registration in Delhi

A Section 8 Company is a type of corporation established to promote non-profit activities, such as education, social welfare, environment preservation, arts, sports, charity, and more. This follows the provisions of the Companies Act 2013. Registering your Section 8 company in Delhi provides an excellent opportunity to contribute to social causes in the local community.

The essential purpose of registering a Section 8 Company in Delhi is to encourage non-profitable goals, including but not limited to trade, arts, commerce, education, charity, environmental protection, sports research, and social welfare. To register a Section 8 Company in Delhi, a minimum of two directors are required, and there is no requirement for a minimum paid-up capital to set up such a company.

Key Points about Section 8 Company Act

• In India, Non-Governmental Organizations (NGOs) can be registered under the Registrar of Societies or as a non-profit entity under Section 8 Company of the Companies Act, 2013.
• Profit generated by Section 8 Companies cannot be used for purposes other than charitable objectives and cannot be distributed among shareholders.
• Section 8 Companies are similar to the erstwhile Section 25 Company under the Company Act 1956. As per the prevailing Company Act, these are now recognized as Section 8 Companies.
• Section 8 Companies in Delhi are required to comply with the provisions of the Companies Act 2013. They are mandated to maintain books of accounts, file returns with the Registrar of Companies (ROCs), and comply with GST and IT Act.
• Any changes to the charter documents like the Articles of Association (AoA) and Memorandum of Association (MoA) require the government's consent.

Benefits of Opening a Section 8 Company in Delhi

Incorporating a Section 8 company in Delhi offers numerous advantages, some highlighted below.

Tax Exemption

Section 8 companies registered under section 12AA of the Income Tax Act are eligible for a 100% tax exemption, as they utilize their profits for charitable purposes. This is a significant benefit as the profits generated by such entities are non-taxable in Delhi.

No Minimum Capital Requirement

Unlike public limited companies, Section 8 entities in Delhi do not have a minimum capital requirement. They can adjust their capital structure according to their growth, giving them more flexibility.

Separate Legal Entity

Section 8 companies in Delhi have a separate legal identity and perpetual existence, just like other registered companies. This increases their credibility and provides them with more autonomy and legal standing.

Increased Credibility

Section 8 companies are subject to strict legal compliance frameworks, enhancing their credibility regarding legal standing. Unlike NGOs and trusts, Section 8 entities follow stringent compliances post-registration, making them more trustworthy in Delhi.

Section 8 companies are free to choose a name that suits their liking during the registration process in Delhi. Unlike other registered structures, they are not required to affix the term "Section 8" after their name.

A Section 8 company in Delhi offers numerous benefits, including tax exemption, no minimum capital requirement, no need to pay stamp duty, separate legal identity, increased credibility, and no title required. These advantages make Section 8 companies attractive for entrepreneurs looking to start a business with a charitable or social cause in Delhi.

Eligibility Criteria for Incorporation of the Section 8 Company in Delhi

Specific eligibility criteria must be met to establish a Section 8 company in Delhi.

• An Indian national or Hindu Undivided Family (HUF) can incorporate a Section 8 Company in Delhi.
• The entity must have at least one director.
• The primary object of the Section 8 Company Act should be related to promoting art and science, sports, charitable activities, education, or providing financial assistance to individuals from lower-income groups.

These eligibility criteria ensure that the Section 8 Company operates to promote social welfare and contribute to the greater good of society in Delhi.

Mandatory Legal Requirements for Section 8 Company in Delhi

• Number of Directors: A minimum of two directors is required if the Section 8 entity intends to operate as a private limited company. However, a minimum of three directors are required if the entity aims to operate as a public limited company in Delhi.
• Number of Members: If the Section 8 Company Act aims to function as a private limited company, the number of members is capped at 200 by the Ministry of Corporate Affairs (MCA). However, there is no such limit for Section 8 entities with a business structure like a public limited company.
• Capital Requirement and Name: According to the Companies Act 2013, Section 8 entities are not required to maintain a minimum paid-up capital. Moreover, NGOs operating as Section 8 entities are not obligated to affix terms like private limited or limited in their name.
• Company Objects: Only entities with non-profit objectives are eligible for Section 8 registration in Delhi. The Memorandum of Association and Articles of Association must clearly state such goals for which the Company is established. Any profits the Section 8 entity generates must be utilized for charitable purposes or reinvested in the entity. The profit of Section 8 entities is not available to its members in any form.

These legal requisites ensure that Section 8 companies in Delhi operate with transparency and the intended purpose of promoting social welfare.

Documents Required for Section 8 Company Incorporation in Delhi

• Articles of Association (AOA) and Memorandum of Association (MOA)
• Declaration by the first director(s) and subscriber(s) (an affidavit is not required)
• Proof of office address, such as a copy of utility bills like electricity, water, or gas bill in Delhi
• Copy of the certificate of incorporation (COI) of an overseas corporate body (if any)
• A resolution passed by the promoter company
• Consent of Nominee (INC-3)
• Residential and identity proof of nominees and subscribers
• Applicant's identity and residential proof
• Digital Signature Certificate (DSC)
• Declaration of unregistered companies.

Section 8 Company Incorporation Process in Delhi

1. Step 1: Obtain Digital Signature Certificate (DSC)
2. Step 2: Obtain Director Identification Number (DIN)
3. Step 3: Reserve the Company Name in Delhi
4. Step 4: File the Application for Incorporation in Delhi
5. Step 5: Obtain a License for Section 8 Company in Delhi
6. Step 6: Obtain a Certificate of Incorporation in Delhi

Donations/Funding of Section 8 Company in Delhi

A Section 8 Company in Delhi cannot collect capital through deposits but can accept donations from the public. Several methods are available to raise funds, such as foreign donations, equity funding, and domestic donations.

• Foreign contributions are permissible only if FCRA registration is obtained, which can be applied for three years after registration.
• If immediate foreign contributions are required, prior permission from the commissioner can be requested.
• Equity funding can be achieved by releasing new equity shares at a premium price.
• Domestic subsidies have no restrictions, but it is vital to establish a comprehensive system to prevent money laundering.

Streamline Section 8 Company Registration with Global Taxman in Delhi

Global Taxman is a trusted partner for entrepreneurs and organizations looking to obtain Section 8 company registration in Delhi. With our expertise and seamless online platform, Global Taxman simplifies the complex process of registering a Section 8 company in Delhi, ensuring that all legal formalities are met. Our dedicated team of professionals guides clients through the entire registration procedure, from documentation to approval, and helps you establish non-profit organizations that can work towards social welfare and charitable activities in Delhi.

Contact us now to begin your Section 8 company registration journey in Delhi.