What is the Procedure of Section 8 Company Registration Online?

An organization incorporated for the promotion of art, science, commerce, research, sports, education, charity, religion, protection of the environment, social welfare, or any similar objective refers to as Section 8 Company. The members of Section 8 Company do not get any dividend or income instead all its profits, or other earnings apply in promoting these objects. These are the limited companies registered under the Companies Act, 2013. 

Conditions on obtaining Section 8 Company License 

The Government grants an exclusive license to such companies under Section 8 Companies Act. As per the act, the companies must comply with three main conditions which are as follows:

• The purpose of forming a Section 8 Company must always be a charitable one. Hence, no personal motive can inculcate.

• The income and profits must be used towards the promotion of the objects.

• Lastly, the Company must not pay any dividend to its members.

Provision on Section 8 Company Registration Online

To register a Section 8 company, one must follow these criteria:

• The Company must be governed by the Companies Act, 2013.

• Minimum of 2 Directors/Shareholders is required to form a Section 8 Company.

• Important documents in the process are Memorandum and Articles of Association along with financial statements.

• The property of the Company remains in the Company’s name. Thereby, the same can be sold according to the rules prescribed under the Companies Act.

• During the closure of the Section 8 Company, the property and funds of the society will not get distributed amongst the members of the Company; instead, those remaining funds and property shall be transferred to any other section 8 company with the similar objects. The dissolution as per the bye-laws of the society, after dissolution and settlement not a single member of the Company is liable to the debts and liabilities.

• It requires annual compliance by filing the annual accounts and returns of the Company along with the RoC.

Documents Required

These are the documents required for Section 8 Company Registration Online:

• DSC and DIN of all the Directors. 

• The objectives and proposed work of your company.

• Financial statements such as assets and liabilities, the projection for five years business plan etc. 

• The personal documents of the Directors.

• Documents of Registered office address like sale deed in the name of your company or rental agreement. Also, provide utility bills of not older than two months.

Procedure of Section 8 Company registration Online

The process of Section 8 Company registration can be divided into three major steps other than the document collection, drafting and preparation. Let’s have a look at the steps to follow for registration:

Reserve Unique Name Approval: RUN or Reserve Unique Name is a form filed to reserve a name for a new organization or to change its existing name. It is the first step in the incorporation of Section 8 Company. Generally, the companies which fall under the category of Section 8 use words like Federation, Council, Foundation, Society, Institute, Academy, Club, Charities, Association, Chamber of Commerce, Development, etc. The name approval shall be valid for 20 days.

RD 1 LICENSE: This is the most crucial step in Section 8 Company registration wherein, the name approval becomes valid at the time of applying for the RD 1 License. It is a license granted under section 8 of Companies Act, 2013 since such entities work for the upliftment of science, arts, commerce, environment, etc. Moreover, their earned profit also gets deployed towards the central objectives. In this stage, all the essential documents like the MoA, financial statements, AoA, and other declarations are filed. RD 1 License so approved shall be valid for 30 days.

SPICe FORM: Both name and the license shall be valid at the time of filing the SPICe form. It is the last and the final stage of procuring Section 8 Company registration online. In this stage, all the documents related to the registered office like the utility bills and rental agreements are filed with the RD-1 license and the name approval certificate.

Note:- If you know about NGO Registration Certificate Process

Final Thoughts

In case you are deliberating about where to start from for Section 8 Company registration online, clench on to expert help. A prominent legal company can help you to ease the complex procedure of company registration.