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According to the Ministry of Corporate Affairs, a Section 8 company is incorporated as a non-profit organization. The incorporation of a Section 8 company is done with the objective of promoting arts, commerce, education, charity, protection of the environment, sports, science, research, social welfare, religion and is intended to use its profits or other incomes for the promotion of these objectives.
In this article, we will learn what is Section 8 company, the procedure for incorporation of Section 8 company, Section 8 company registration online, etc.
A Section 8 company registration online is done solely with the service motive, i.e., it does utilize its dividend for any other purpose apart from those in the benefit of the company and charitable purposes. A section 8 company is liable to adhere to the rules formulated by the Government. As per the rules, failure to comply with the regulations can lead to the winding up of the company on the orders of the government.
Please note that while the activities and compliances of a private limited company and a Section 8 company are alike, their names cannot be interchanged.
In order to do Section 8 Company registration online, one should comply with the objectives of the Central Government:
The procedure and requirements of a Section 8 Company registration online are the same as the ones laid down for a limited company. This includes all the rights and obligations that come with a limited company. The only aspect where a Section 8 company differs from a limited company is that the former cannot use the words “Section 8” or “Limited” in its name.
Please note that there is no format prescribed for AoA of the Section 8 Company by the Ministry of Corporate Affairs. MoA and AoA of the company are required to be signed by each member who shall mention his/her name, address, description and occupation in the presence of at least one witness. The witness is liable to attest to the signature and shall also sign and add his/her name, address, description and occupation.
Now that you have seen the procedure for incorporation of section 8 company, let us check out the benefits of Section 8 company registration online in India.
Following are the advantages of section 8 company registration online:
As per section 173(1) and 174(1), Section 8 company registration must have at least one meeting within a period of six calendar months and the quorum for its board meetings is eight directors or 1/4th of its total strength, whichever is less, respectively. However, one must note that the quorum should have a minimum of at least two members.
After the incorporation of a Section 8 company, if the company fails to comply with the legal provisions as per the MCA, then the central government reserves the right to revoke the license issued under this act.
In case of revocation, the company may end up getting wound up. Also, it may be asked to change its name by adding either “Private or Public Limited” as the suffix. The assets remaining after clearing debts and liabilities of such a Company shall stand transferred to some other Section 8 Company having similar objects.
If the operations of the Section 8 Company registration are found to be conducted fraudulently or in violation of the objectives of the Company or are unfavorable to the public interest, the license may be revoked.
If a company defaults in complying with the provisions of the Act, it shall be levied with a fine which shall not be less than Rs.10 lakhs and may extend up to Rs.1 crore. The Directors and all other members of the section 8 company registration, who are found in default, shall be punishable with imprisonment for a term which may extend to three years, or with a fine amounting to not less than Rs. 25,000 which may extend to Rs. 25 lakhs, or both. This is provisional, provided that it is proved that the operations were conducted fraudulently.
Please note that any such order shall not be passed unless the section 8 company registration has been given a reasonable opportunity of being heard.
At Taxzona, we provide you with an all-inclusive, stress-free Section 8 Company registration which would be dealt with by our team of qualified professionals within a short time frame. Our team will take care of the documentation and aids in providing you with the realistic estimation of Section 8 company registration costs. With a bunch of highly qualified professionals at your service, there is no way your section 8 company registration can go wrong. You can always get in touch with our certified professionals at any point in time for deliberation and assistance concerning section 8 company registration and compliances throughout your journey with Taxzona. For more questions and queries, feel free to contact us:
The benefits of filing section 8 company registration are Avoid Penalties, Building Trust, Transparency of Operations, Avoid and Legal Issues, and Increases credibility.
The directors of a section 8 company registration need to file Form MGT 7 within 60 days of AGM (Annual General Meeting).
The due date for filing an Income Tax Return by section 8 company registration is 30 September of every Financial Year.
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