Following is the step-by-step procedure for Section 8 Company Registration:
Step 1: Obtain DSC & DIN:
First, the applicant needs to obtain a Digital Signature Certificate of the proposed Directors. Once they receive DSC, file Form DIR-3 with ROC for obtaining DIN. The identity & address proof should be attached for getting DSC. Once DIR-3 is approved, the Registrar of Companies will allot a DIN to the proposed Directors.
Step 2: Filing of INC-12 Application Form:
After getting DSC and DIN, the next step is to file Form INC-12 with the Registrar of Companies to apply for a Licence under Section 8 Company along with the attachment of the required documents. Once the form is approved, a Licence under Section 8 Company will be issued in Form INC-16.
Step 3: Filing of SPICe+ Form:
After getting a License under Section 8, you need to file an SPICe+ Form with the Registrar of Companies (ROC) for the Registration along with the vital documents.
Note: Once the Registrar of Companies is satisfied with the forms submitted, he or she issues a CoI (Certificate of Incorporation) along with a Unique CIN.
What are the Annual Compliances for Section 8 Companies in India?
Following are the annual compliances for Section 8 Company:
- Mandatory Audit Report
- Maintenance of Books of Accounts
- ITR filing
- Conduct a minimum of 2 board meetings in a year
- Preparation of Financial Statements
- Filing of financial statements in Form AOC-4
- An Annual Return is to be filed every year with other e-filing forms like MGT-7
- Additional compliance to fulfil the Registration like 12AA, 80G, etc
Penalties for Non-Compliance
As per the Companies Act, if the Company fails to comply with the legal provisions, then the Central Government will cancel the License for Section 8 Company. If the Company’s objectives are conducted fraudulently or in violation of the objectives for which it is established, the license can be canceled. In case a Company fails to comply with the provisions of the Companies Act, then the Company will be punishable with a fine not less than Rs. 10 lakhs & may extend to Rs. 1 crore. The Officers & Directors of the Company in default of the provisions will be punishable with a fine not less than Rs. 25,000 which may extend to Rs. 25 lakhs or both.
Requirements for Section 8 Company Registration
Following are some vital requirements for Section 8 Company Registration:
1. Directors:
For Section 8 Company Registration in India, a minimum of 2 Directors are required.
2. Capital Requirement:
There is no minimum paid-up capital for the Registration of Section 8 Company. NGOs in India established as a Section 8 company need not use the words Private Limited or Limited in their name.
3. Management
Section 8 Company is managed by the BoD (Board of Directors) as per AoA & MoA of the Company, unlike other Trusts that are handled by the Trustees as per the Trust Deed.
4. Regulation under various Acts:
Section 8 Company needs to follow the Rules & Regulations prescribed under the Companies Act, 2013. It needs to file returns & maintain Books of Account with ROCs. Section 8 Company can’t make any alterations to the provisions of Memorandum of Association (MoA) & Articles of Association (AoA) without prior consent of the Central Government and it should follow the provisions of the GST Law & Income Tax Act.
5. Charitable Objects:
In India, Section 8 Companies are registered with non-profit objectives. The AoA & MoA must mention the purpose for which it is set up. Any profits earned by the Section 8 Company are utilized for the furtherance of its main objectives i.e., charitable purposes in the Company. The profits will not be distributed among its members.
6. DSC and DIN:
DSC or Digital Signatures of all the proposed Company’s Directors are necessary for the Registration because the forms for the Registration process are filed online & should be digitally signed. Apart from DSC, you need to apply for DIN for the Directors and the application for allotment of DIN must be filed in Form DIR-3 or along with the SPICe+ Form for the Registration.
