Incorporation of company under Section 8 of Companies Act 2013

Company formed company under Section 8 is a Companies Act 2013 which is incorporated for the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment and appliy its profit or any other income for on its object not for payment of dividend to members.

Procedure Procedure for Incorporation of Company under section of 8 in Companies Act, 2013

1. Application for name availability in form RUN

Application for name availability must be made in “Reserve Unique Name” facility. The name of Section 8 Company shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust, and the like etc.

You can propose maximum 2 names at a time and 1 resubmission is allowed in RUN facility. Fees for RUN is Rs. 1000/-. It is advisable to attach the object clause of the proposed company.

2. Preparation of Memorandum of Association and Articles of Association

Memorandum of association is the charter of the company and defines the scope of its activities. An article of association of the company is a document which regulates the internal management of the company.

Memorandum of Association of company under Section 8 must be in form INC-13 while there is no format prescribed for Articles of Association for Section 8 Company. One can adopt table F provisions.

Memorandum and articles of association of the company shall be signed by each subscriber to the memorandum who shall mention his name, address, description and occupation, if any, in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address, description and occupation.

3. Application in Form INC-12

After approval of name by CRC, one can make an application in Form INC-12 to the Registrar for a license under sub-section (1) of section 8. Fees for INC-12 is Rs. 2,000/-

Attachment of INC-12

1. Memorandum of Association in Form INC-13;

2. Articles of Association; (No Specified format)

3. Declaration in Form INC-14 by CS/CA/CWA in practice, that the draft memorandum and articles of association have been drawn up in conformity with the provisions of section 8 and rules made thereunder and that all the requirements of the Act and the rules made thereunder relating to registration of the company under section 8 and matters incidental or supplemental thereto have been complied with;

4. Declaration by each of the persons making the application in Form INC-15;

5. An estimate of the future annual income and expenditure of the company for next three years, specifying the sources of the income and the objects of the expenditure;

6. Name Approval Letter received from CRC;

These are compulsory attachment of form INC-12. It is advisable to attach note on work proposed to be undertaken by the Company after incorporation and Grounds of application for issue of license under section 8.

Once the form INC-12 will be approved, License under section 8 will be issued in Form INC-16 which required to be attached in form SPICe.

4. Filing of SPICe 32 Form

After receiving Central Government approval i.e approval of form INC-12, one may go ahead with filing of form SPICe 32.

Attachment of SPICe 32:

1. Memorandum of Association in Form INC-13;

2. Articles of Association; (No Specified format)

3. Consent and Declaration by first Directors in form DIR-2;

4. Affidavit by first subscriber in form INC-9;

5. PAN card of first directors and subscribers;

6. Aaadhar card of first directors and subscribers;

7. Proof of Registered office like Sale Deed/Lease Deed/Rent Agreement etc;

8. Latest Utility Bill of Registered office like Electricity Bill;

9. NOC of owner/director if registered office is taken on rent/lease;

10. License issued in form INC-16;

SPICe 33 and 34 i.e e-MOA and e-AOA can’t be used for Section 8 Company. Section 8 companies are mandatorily required to file MOA and AOA as pdf attachments to SPICe-32.

Benefits of Section 8 Company Registration:

Exemption from Stamp Duty.

Tax deductions to the donors of the Company u/s. 80G of the Income Tax Act.

The Said Companies may have share capital or not,in case they are formed without capital, the necessary funds for carrying the business are brought in form of donations, subscriptions from members and general public.

The Said Companies are not required to add the Limited or Private Limited at the end of their name as suffix.
The companies has more credibility as compared to any other Non-profit organization structure like Trust or Society.

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